Broadcasters Juggle Political Ads

March 5, 2004
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GRAND RAPIDS — On the surface, it seems as if political campaigns most certainly enhance the bottom line for radio and television stations in the form of additional advertising revenue that may not normally be generated in non-election years.

But in reality, it is about as certain as to whether George W. Bush or Al Gore won the most recent presidential election just before the “chad fad” of 2000 sparked a recount in Florida.

Yes, electronic media representatives claim, there is usually an increase in demand for advertising space during political campaigns.

“The political marketplace does help out, because there is a significant amount of money in a station that you don’t have if they are not there,” said Patty Hamilton, vice president and general manager of WXMI FOX-17. “It becomes an increased demand on the inventory.”

But that doesn’t always equate into a more profitable bottom line.

“It depends on what kind of year you’re having,” said Skip Essick, general manager for seven Clear Channel Radio Stations, including WBCT B-93.7 FM and WOOD-1300 AM. “If you’re having an off year, it can help. In a year when your broadcast advertising is normal to robust, political advertising can end up carving into your profitability, because you have to sell it at the lowest published rate at that time. You have to give them reasonable access to inventory at the lowest rate for that part of the day.

“But my experience has always been that political advertising has been much more of a positive than a negative.”

Television and radio stations are required by law to provide access to all candidates running for federal offices. Those stations do have the option of arbitrarily accepting advertising for state and local elections.

“You are not required to give them equal time,” said Janet Mason, president and general manager of WZZM-TV13. “But you do have to give them the opportunity to buy that time if they want it.

“If you open it up for a particular race — in this year’s case, a presidential race — any candidate that filed has the opportunity to buy airtime.”

That airtime may be purchased for the “lowest unit rate” leading up to the general election. It provides candidates opportunities to buy airtime at that rate during a 60-day window leading up to the election.

For primary elections, the window for the lowest unit rate is 45 days.

“We may have contracts negotiated over a year’s period — and they may be paying a lower rate over a longer period of time — but during a political window, we are required for candidates to pay only the lowest rates,” said Tim Siegel, national sales manager for WZZM-TV13. “You can’t charge more for one candidate than another.”

What happens through supply and demand is that some primetime advertising dollars must be sold for the lowest unit rate.

“It has happened in the past,” Siegel said. “Suppose you have the Michigan State vs. Michigan football game and there is only one big game.

“It may be you have a multitude of candidates a month before the elections. We may say we will accommodate those races, but, yes, we have to move out commercial advertisers to put politicians in there.”

In that case, it adversely affects the bottom line, since political advertising must be sold at the lowest rate unit instead of primetime — or big game — dollars.

“When you speak of primetime programming — or if they want their ads on shows such as ‘The Bachelor’ or ‘Friends’ — you can offer them other prime programming to satisfy their needs if those slots are not available,” Siegel said. “We try to be reasonable about it.

“Most generally speaking, the news is most desirable in most cases. Primetime is, as well, but news is No. 1, along with shows like ‘Prime Time’ and ‘20/20.’”

Turning away advertising dollars, however, is seldom an option.

“There are very specific FCC criteria that all broadcast stations are required to follow regarding political advertising, and we have to very carefully document requests for political advertising and carefully document the rates we charge for political advertising,” Essick said. “Our policy really is to make political advertising available to all candidates.

“You have to and are required to accept political advertising from federal candidates, whether it’s presidential, U.S. House or the Senate, and that’s pretty much carved in stone. Also, any federal judicial elections, we would be required to accept that political advertising, as well. Where it gets perhaps a little bit gray are with the non-federal elections, because radio and television stations are not required to handle non-federal elections advertising.

“In the past, we have not accepted political advertising for certain elections, but we reviewed that policy and decided that it is in the best interest of the public to do so.”

In Michigan this year, it is almost exclusively a federal election year with the presidency and U.S. House of Representatives on the line. All candidates in those races may purchase airtime.

“The law treats federal positions differently than state positions,” Mason said. “If it is a federal office, we are required to provide airtime if they want to purchase it. For state elections, we can decide which races we’ll accept advertising for, but we have to offer time for all candidates within that race.

“Let’s say that there is advertising for governor and all the state House seats open — along with the state supreme court and other judge positions open — there may be so many offices that we don’t have enough airtime to handle all of them,” Mason added. “Then we may only take governor’s race and the state supreme court. The law allows us to do that sort of thing.”

In radio, drive-time hours — both to and from work — are the most desirable for political advertisers, while the most popular television spots are the newscasts and primetime programming.

“Usually it’s the news sought out for political advertising, but those slots cannot always be guaranteed,” FOX’s Hamilton said. “We have to adhere to different guidelines that are spelled out legally what we can and cannot do.

“I haven’t had a problem with that in my experience, but I do know that (campaign advertisers) cannot determine what break they are going to be in.”

Where it could get contentious is placement of those spots.

“The media buyers for these campaigns are very savvy advertising people,” Essick said. “They know precisely what radio stations to buy, what demographics they want and what time periods they want to hit their target audience.

“A broadcast station has only so many spots and has a license from the FCC to honor the criteria, because the airwaves are considered public.

“As long as you demonstrate reasonable access, it’s not an issue. If your inventory is sold out, you’re sold out. Period. But you must try to accommodate them in some way.”

Unlike print media, which can increase page counts in an issue to accommodate additional advertising, electronic media is limited to the number of on-air spots during a day.

“We have to provide reasonable access,” Mason said. “They can purchase daytime parts or primetime parts. There are restrictions regarding news, but we can determine whether we accept news spots or not.”

After the spots are purchased, it then becomes a balancing act to fit them into the station’s daily program cycle.

“We cannot limit candidates up front, but we are allowed to set aside how many candidates are running for a certain office. We have to have time available for an opposing candidate to buy that day part as well,” Siegel said. “But we have to take into consideration whether there will be three candidates, five candidates, or a state supreme court. We need to know how many can we reasonably accommodate.

“If we can’t, we can offer other day parts; we try to accommodate them all the same.”    

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