Strong Political Ad Market Predicted

If there is one thing that TV stations can count on as the nation's slowly pulls out of the current recession, it's political advertising, says Evan Tracey, who closely tracks spending by candidates and advocacy groups for TNS Media Intelligence.

Driven by issue advertising surrounding the health care and cap-and-trade debates on Capitol Hill, he says, the political category could generate as much as $1 billion for TV stations and networks this year -- a record for the usually weak first year of the four-year political advertising cycle.

And the pace of spending will not abate in year two of that cycle, he says. In 2010, TV spending will track that of 2006 and 2008 and end up between $2.4 billion and $2.6 billion. "There is plenty of fuel for this fire."

Tracey's forecasts were welcomed news for the revenue-deprived broadcasters gathered today in New York for the annual TVB Forecast Conference.

This year, issue spending could top $700 million as advocacy groups try to stop or influence the health care and cap-and-trade legislation, he says. Just how big the number ends up will depend in large part in how the legislation proceeds, he says. The longer the debate goes, he says, the more will be spent.

So far, about a third of the issue money has been spent with broadcast and cable networks, Tracey says. But that will change as Congress gets closer to passing legislation, he adds.

The advocacy groups will begin targeting key legislators -- conservative Democrats and moderate Republicans -- by buying time on stations in their home states, he says. "When it comes down to getting [Sen.] Olympia Snowe's vote, that money is going to Maine."

TV stations should also benefit from two competitive gubernatorial races in New York and Virginia and more than 600 races for mayor and other local offices, Tracey says. They could bring in $120 million for TV stations.

Also contributing to the 2009 take will be early starts on 2010 campaigns, he says. A dozen candidates running for office next year are already on the air, he says.

Unlike 2009, spending in 2010 will be driven by elections at all levels. The 37 gubernatorial campaigns will produce the most advertising. In addition, many of the Senate seats and as many as 100 House seats could be competitive and thus generate heavy spending.

Because of the controversy surrounding President Obama's aggressive agenda, incumbent candidates will be "skittish" heading into next year's elections and will be spending early and often to secure their reelections, Tracey says. The elections will be a referendum on Obama's health care initiative and his first two years in office.

One other factor that broadcaster should be aware of is the campaign finance case -- Austin v. Michigan Chamber of Commerce -- now before the Supreme Court, Tracey says. Some believe the high court will use the case to lift restrictions on political spending by corporations. If that happens, he says, "it will open up the floodgates for any corporate money that wants to come into the elections."