Advertising for presidential race down 60 percent, hurting broadcasters

Spending on political advertising during the U.S. presidential election has dropped 60 percent from 2012, a troubling sign for local TV broadcasters around the country that were counting on a windfall.

Since late April, when Donald Trump effectively secured the Republican nomination, $146 million has been spent in the presidential race by all sponsors, compared with $373 million over the same period in 2012, according to an analysis by Ken Goldstein, a Bloomberg Politics polling and advertising analyst. That hurts station owners like Sinclair Broadcast Group Inc., Tegna Inc., and Tribune Media Co., Goldstein said.

Spending is down in part because Trump’s campaign has relied instead on getting his message across in a steady stream of media interviews and tweets. There also hasn’t been as much spending by Republican outside groups, such as political action committees, as there was in 2012, Goldstein said. On the Democratic side, the primary season went longer this year than four years ago as Hillary Clinton and Bernie Sanders battled into early summer.

“It delayed the start of general election advertising in battleground states where the real money is,” said Goldstein, who is also a politics professor at University of San Francisco.

Things could still turn around. Trump’s campaign is expected to run its first TV ads in the coming days and could spend more now. A person familiar with the matter said Trump has been getting advice from former Fox News Chairman Roger Ailes, who is considered a mastermind of political messaging. The Trump campaign has denied Ailes is advising the candidate.

The Clinton campaign has spent around $50 million on broadcast television advertising since mid-June, almost all of it in 10 battleground states. The largest ad buy last week, $2.2 million, was in Florida, though this ultimately comes out to just $83,000 for each of the state’s all-important Electoral College votes. In comparison, the Democratic nominee spent more than $100,000 per Electoral College vote in Nevada and Pennsylvania.

Encouraging poll numbers have already led Clinton to pull ads in Colorado and Virginia. Looking ahead to next week, the campaign is set to decrease its ad buy in Pennsylvania and instead commit extra resources to Ohio and Iowa.

Steve Lanzano, president of the Television Bureau of Advertising, which represents the local broadcast industry, said he expects more advertising dollars to pour in to Senate races, helping cushion the blow from the lack of presidential ad spending.

“Certainly it’s not what was expected,” he said. “But you’re going to see the money coming in. It’ll just come in later.”

For broadcasters, that won’t make up for four months of lost revenue, Goldstein said. Sinclair shares are down 9.9 percent this year and Tegna has dropped 16 percent. Tribune Media is up 15 percent after announcing in February that it was exploring strategic options for the business.

Executives of all three companies remained optimistic about political advertising in their second-quarter conference calls. More spending than normal will come in the fourth quarter because of the Trump campaign’s late fundraising push, Sinclair Chief Operating Officer David Amy said earlier this month.

Dave Lougee, president of Tegna’s media division, said last month that there’s a flip side to the “Trump factor”—some states that have previously been solidly Republican, such as Georgia, are in now in play and drawing advertising spending.

“The bottom-line: Spending for all races is now beginning and accelerating fast, as expected,” he said.