Do TV Stations Make a Killing on Political Ads?
Yes, but there are some things you should know
Cindy Axne went to France! Zach Nunn still has his hand in the air! IRS agents are hiding in Iowa cornfields (wearing dark business suits for some reason) ready to pounce on us! Somebody’s giving “the bird” to who, exactly?
On many election days at KCCI, before the polls closed, anchor Kevin Cooney would announce during either the 5:00 pm or 6:00 pm newscast, “Ladies and gentlemen, we’ve just aired the LAST political ad of the season!” A roar would go up in the newsroom, no doubt echoed across central Iowa living rooms.
I get a question a lot this time of year. “Don’t stations rake in mountains of cash from these political ads?” The answer is yes, but perhaps not quite as much as you might think.
I’m a news guy so I didn’t deal with ads but I know enough to offer a few points you should know.
There are a lot of rules governing political ads. Perhaps the most important one is that stations must offer TV time to candidates for any office at a price called the “lowest unit charge” for a given time period. What’s that mean? It means that if a car dealer buys 50 spots in the morning news, the dealer usually gets a volume discount. But if a candidate comes in to buy just ONE spot in the morning news, the candidate gets that same lower price offered to the dealer. That price is offered to candidates anytime during a 60-day window before a general election.
There are different costs for different time periods, based on how high the ratings are for that time period. But the rules hold – candidates get to buy time for the lowest rate the station offers.
The rule does NOT apply to PACs and outside interest groups. Advertising costs are subject to supply and demand. So, the price generally goes UP for those groups to buy ad time in a busy political season. And that’s where TV stations make money.
One other thing to remember, though, is that all those political ads we love to hate are replacing a station’s regular advertisers. Although the station is making money from the ads, it’s often at a rate below what a regular advertiser pays, or in the case of a PAC, it’s extra dollars on top of what the station might have been making anyway. The station’s regular advertisers hate the political window because they can’t get their ads on TV, which hurts their sales. Stations have to do some fast talking to keep regular advertisers happy so they’ll come back after election day.
Don’t get me wrong. TV station owners make a lot of money during political season. For publicly traded companies, it’s not unusual to see vast differences between revenue in odd-numbered years vs. even-numbered political years. But due to the reasons above, it’s not the pure profit that it might seem like.
Next question: “Can’t you do something about the content of the ads? The lies, the innuendo?” The answer is no. Federal law prohibits stations from making editorial changes to an ad run by a candidate for federal office and stations are required to run them. A more practical reason is that stations don’t have the staff, the time, or the desire to vet truth from fiction. I doubt any of you want stations to inject themselves into the process by saying Candidate A is telling the truth, but Candidate B is lying so we’re not going to run that ad.
In the newsroom, we tried to do “truth test” stories by reporting on the veracity of a few political ads. But it takes days if not weeks to vet each sentence and by the time we got the story ready to air once, the ad had already run hundreds of times. It’s like spitting into the wind.
Only about ten days left. We’ll soon rejoice to see an ad where the only person emerging from a cornfield is a farmer battling lambsquarters and cocklebur.
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Another point: While the stations are making their tons of money the on commission sales staff can't get clients' ads scheduled so they don't get paid. The station gets rich while the staff gets screwed.
Terrific column, Dave, with details on billing etc. that I hadn’t realized. Doug Burns, the Carroll IA newspaperman, theorizes that more political advertising is moving to community newspapers again, probably because TV time gets so saturated that peeps react with confusion & boredom at it all. I subscribe to 8 newspapers and I sense Doug is right on this. But maybe this is just so much dreaming by two old print newsies. Thoughts?