Report: Political Ad Spend to Increase 11% in 2010

Political advertising will hit $3.3 billion in 2010, an 11 percent increase over 2008 (but a 4 percent decrease from 2006), according to a Wells Fargo Securities report released Wednesday (Oct. 21).

The ad windfall, more than 60 percent of which will go to local TV, will be fueled by the election of 37 governors, 38 senators, every member of the House of Representatives and issue advertising (which could approach $1 billion) on hot-button issues such as health care.

The factors affecting the 2010 forecast are similar to those that made 2006 ad spend of $3.4 billion a record year for political advertising.

“2010 political spending will most closely resemble 2006, as it was the last time a large number of governor races were held, and congressional elections faced similar conditions (i.e. declining presidential and congressional approval ratings and contentious issues),” wrote Marci Ryvicker, senior analyst and author of the report.

Broadcast TV will reap the lion’s share at $2.2 billion or 67 percent of the total, with $2 billion going to local TV, $150 million to cable and $50 million to network TV. Direct mail will get $650 million or 20 percent of the ad spend, followed by radio at $250 million or 8 percent, and newspaper at $95 million or 3 percent. Outdoor and the Internet are forecast to reach $55 million and $50 million, respectively.

A robust political advertising market couldn’t come at a better time for the TV business, which has been hammered, by the soggy economy and a sinking auto category. Political is likely to be a large contributor to a modest increase for spot TV between 3.6 and 6.1 percent, according to the Television Bureau of Advertising’s forecast.

TV groups most exposed to hotly contested races include Disney’s ABC stations at 63 percent, Journal Communications (53 percent) and CBS (46 percent).

Although political advertising has made up only 3 to 5 percent of total revenue radio also stands to gain. Radio groups most exposed to political races include Disney’s radio properties (63 percent), Beasley Broadcast Group (61 percent), Regent Communications (61 percent) and CBS (58 percent).

“Any incremental ad dollars will contribute significantly to [radio’s] year-over-year top-line growth, especially given the easy comparisons of 2009,” Ryvicker wrote.

Publish date: October 21, 2009 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT