With political-ad spending primed to hit a record $1 billion by Election Day, broadcast inventory is tight or sold out in most of the top 25 U.S. markets. And media buyers don't see this perennial problem ending with the ban on "soft money" political contributions.
In markets with hotly contested races—including New York, Atlanta, Boston and Orlando-Daytona Beach, Fla.—prices have doubled in the past month, said Kathy Crawford, evp, director of local broadcast at Initiative Media, which last week released a study on political ad spending.
"The only time media buyers are going to have trouble are the two weeks leading up to the elections, as the smaller offices—the state treasurers and comptrollers—who don't really have the money to space TV ads out over a longer period and instead do a last minute blitz," Crawford said. "It depends on the market, but prices can be 100 percent and then some. Every station has a different interpretation of the political law, but if you're a marketer and you have to get on at the last minute, you might have to pay 10 percent more than the original rate card."
Some buyers are calling for a revision of federal regulations requiring stations to devote a certain percentage of airtime to election ads, saying that advertisers are too dependent on television. "There is an obvious lack of substitutability in media," said Jon Mandel, chief negotiating officer for Grey Global Group's MediaCom, noting that media agencies have discussed the issue with the Federal Communications Commission.
The McCain-Feingold act goes into effect in January and bans unlimited "soft money" donations to political parties from special-interest groups. Still, said Phyllis Maguire, svp, director of local broadcast for Media Planning Group, "political groups will figure out other ways to get that money."