All that concentrated demand puts pressure on prices to rise, but that doesn’t mean campaigns are paying top dollar. By law, candidates for federal office are entitled to rates that are the “lowest unit charge per class of time” within 45 days before a primary, or 60 days before a general election. That means they receive the discounted rates given to loyal, favored advertisers. (While the campaigns get the lowest rates in a given ad class, they do tend not to buy the cheapest class, which is subject to “immediate pre-emption.”) In fact, Goldstein and his Kantar colleague Elizabeth Wilner argue that the primary motivation behind broadcasters’ opposition to a new FCC rule mandating that political ad buys be posted online is that the broadcasters don’t want ordinary non-political advertisers to know just how low those rates are.
Super PACs and issue groups, though, are not entitled to the same low rates. And in a post-Citizens United world, those groups account for an increasing share of political ad buys. In 2002, candidates accounted for about 60% of political ads; in 2010, it was down to about 40%, and it’s expected to fall further this year. And as the campaigns buy up ad time, and drive up costs on the remaining inventory, the rates for super PACs—and other advertisers who just have to have that 30-second spot in that hour on that day—shoot up. The difference between the campaign’s “lowest unit rate” and what a super PAC might pay can be significant, says Goldstein—anywhere from 150 to 5000 percent.
Put all the right conditions together, and the effect on ad prices can be extraordinary. According to Goldstein, a spot in Des Moines, Iowa, on Dec. 30—in the middle of the Insight Bowl, which pitted the University of Iowa football against Oklahoma; and four days before the Iowa caucus—went for $15,000. The cost normally would have been $500.
‘You can’t count on political money until the check arrives’
The targeted nature of political ad buys sorts broadcasters into groups of big, big winners and (relative) losers. As the targeting becomes ever more fine-tuned, though, even the winners have to accept some unpredictability.
That instability is driven by polling, which, as it has become finer science and bigger business, is giving campaigns and super PACs more precise and time-sensitive information about which voters to target.
Bob Prather, the president of Gray Television, an Atlanta-based company which operates 36 stations in 30 small to medium-sized markets, said this effect led Republicans in 2008 to pull $800,000 in ads from his Ohio stations as they focused their efforts elsewhere. Three days later, Democrats cancelled their $500,000 buy.
“The thing I’ve seen in 20 years is that the spending is a lot more sophisticated and controlled,” said Prather. “They move money around real fast depending on polling. It seems to be more volatile every election cycle.”
In some cases, spending is also compressed into shorter time periods. That was certainly the situation this year for WIS TV in Columbia, S.C., at the center of a key early primary state. Scott Sanders, the station’s general manager, said just $100,000 had been spent in his market as of Jan. 3; by the Jan. 21 primary, the figure had ballooned to nearly $2 million.
“Four years ago, candidates started advertising in October of 2007,” said Sanders. “This time, it started two weeks before the primary and was lumped into one big sum. Super PACs came with basically unlimited money and said, ‘We’ve got X amount to spend, where can you put it?’ For a 12-day period in January it was unlike anything I’d ever seen.” (Sanders said he actually exhausted his inventory and had to turn some super PACs down, just the doomsday scenario pondered in a recent Campaigns & Elections article headlined, “Could we run out of airtime?”)
In other words, it was the flip side of what happened in Pennsylvania this year. But Holly Steuart, vice president and general manager of a CBS and CW affiliate in the Harrisburg market, was philosophical about missing out on that presidential primary spending.