Friday, December 14, 2007

Why Web Campaign Spending Trails TV

Online Ad Spots Grab Only Small Piece of Pie; 'Get Voters to Notice'
December 14, 2007; Page B4

Amid the gloomy forecasts for next year's ad market, there is at least one bright spot: political advertising.

Candidates, political parties and issue groups are expected to spend a record $3 billion on ads this election season, thanks in part to the unusual number of tight local races, says Campaign Media Analysis Group, which tracks politics and public affairs advertising.

But as spending grows, one thing that hasn't changed much is how money is spent. Despite the hoopla about online advertising, the Web is expected to get only a very small slice of campaign spending in 2008, says Evan Tracey, founder and chief operating officer of Campaign Media Analysis, part of TNS Media Intelligence, a firm that tracks advertising. In fact, the best way to reach voters in the run-up to elections is still the old way -- via local broadcast television, he says. That's creating a scramble for TV ad time in unexpected places, like Paducah, Ky., and Charleston, W.Va.
[Evan Tracey]

Mr. Tracey, who tracked politically-related advertising for more than a decade, is particularly curious to see how Feb. 5 plays out. Voters in 20 states will vote in presidential primaries that day, presenting some interesting ad-spending decisions for campaigns. He talked with The Wall Street Journal about ad-buying trends this year, mistakes that candidates make with their ads, and even how a third-party run by New York Mayor Michael Bloomberg could change the spending equation. Below are excerpts from the interview.

Wall Street Journal: Some 70% of the $3 spent on political ads is expected to be spent on local advertising, mostly local TV. Why?

Mr. Tracey: Even presidential elections turn into 18 or 20 state battlegrounds that are often waged right down to the county-by-county level. If any business -- let's say dog food -- had to run on a cycle where you could only get your customers once every other year, and you had one day when they had to pick between your brand and somebody else's brand and whichever brand had 51% of the market won, you would want to have a medium that is best situated to essentially drive up the volume and get voters to notice you and customers to notice you. That has always been television.

WSJ: How does the supply crunch with local advertising impact supply and demand for advertising on other media?

Mr. Tracey: In many cases you have multiple competitive elections in the same media market. That will certainly be the case this year in places like Florida, Ohio, Missouri, Illinois, California. Once you've bought all the television you can buy, then you start to look for other places to use your money and funds. Things like radio, and even in some places things like newspaper. Also, in some respects, with other nonpolitical advertisers trying to buy in these markets as well, they get priced out and start to look for other media.

WSJ: What role is new media playing ad-wise this election cycle?

Mr. Tracey: You will see record spending on Internet advertising in this cycle, but it will still amount to little more than a rounding error when put next to the money spent on television. Right now, the campaigns are using the free part of the Internet -- things like email, blogs, and YouTube and MySpace -- to fund-raise and take advantage of grass-roots organizing, but not doing much from a paid standpoint.

WSJ: Why aren't politicians devoting more funds to the Web?

Mr. Tracey: There was the case with Mitt Romney going through one of these ad wholesalers like, and spots ended up on and sites like that. There have been other cases where the campaigns have had similar problems. So there is a trust factor, No. 1. But No. 2, an Internet ad is not a TV ad. It is not going to be something that you can put an unfiltered 30-second message, or an attack ad when you need to do those because with an Internet ad at this point, somebody has to want to see it.

WSJ: What are some of the most interesting forms of advertising you've seen so far this election?

Mr. Tracey: There is not a lot of innovation that goes on in the realm of political advertising. That is because we've been perfecting it for the last thirty or 40 years. One of the things that is going to be very interesting to watch is how campaigns deal with this Feb. 5 primary, where you have 20-plus states all on one day. There isn't a political playbook or a media-consultant guide to navigating a third of the country's primaries.

WSJ: What effect would a strong third-party candidate in the presidential race have on political spending?

Mr. Tracey: If that candidate has a last name of Bloomberg, it could easily add a third more [spending] to the mix.

WSJ: Some new ad firms like Spot Runner create templates for political ads. Do you think those ads are effective?

Mr. Tracey: Over the last 10 years, things like editing costs have gone down. Literally, campaigns are creating commercials on laptops. The barrier to entry to TV, which always was sort of that upfront production cost, is gone. The net effect on that has been more campaigns are finding their way to using TV. I don't think that there is anything wrong with that. (But) TV spots are only as good as the audience who sees them and the message that is in them and timing of the spot. In this marketplace, there is probably in many ways an overreliance on TV.

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