Why Local Businesses Cannot Wait for the Election to End
And why TV stations wish it would go on forever.
The chase for votes in Alaska's Senate race will end Tuesday. And local businesses could not be happier. They'll finally be able to advertise again.
"Watching TV, I don't see any of the ubiquitous car-dealer ads, the telecom ads. There are very few," says Andrew Halcro, the president of the Anchorage Chamber of Commerce. What he's seen instead have been political ads—a lot of political ads. Sen. Mark Begich, opponent Dan Sullivan, and outside groups have poured tens of millions of dollars into the contested Senate race, breaking local spending records and saturating the airwaves in Alaska's media markets.
That has left little room for advertising of any other kind, and it has shaken up local businesses accustomed to getting screen time with local customers. "There's just simply no space for business because the TV stations are making hay while the sun shines," Halcro said. "From the private-sector standpoint, they've basically been precluded from the TV marketplace for the last three months."
Even an annual event called "Trick or Treat Town," which provides an indoor night of pre-Halloween activities for thousands of Anchorage families, had trouble getting the word out about this year's edition, Halcro said.
Spending on the 2014 elections has been unprecedented, with a significant chunk of around $4 billion in federal political spending going to TV ads boosting or bashing different candidates. It's been a bonanza for local stations, especially as more and more advertisers have driven up prices throughout the year. But it's left the conventional advertisers in some especially competitive areas with crowded markets, like Anchorage, watching their usual slots go to higher-paying political customers and dealing with a rising sense of frustration.
"As you know, it's supply and demand," Halcro said. "Now, with all the third-party money coming in, some of these stations are getting paid three or four times what's on the rate card for these ads. So there's no capacity for a business to run any kind of sustained campaign. You might get one or two spots in prime time, but not enough space to actually get out a sustained message."
Chris Miller, a car dealer in West Virginia, is one of the business owners feeling that squeeze. "It's the success of local businesses that allows everything to exist, that allows the tax dollars to be created, that allows the country to run," Miller said. "And here we are, in a dire grab for votes every two years, getting in the way of that."
Advertising in his state's 3rd Congressional District has been running strong for the entire year, since Americans for Prosperity and House Majority PAC, two outside groups, got involved back in the winter. Plus, the state shares media markets with Kentucky, where Senate Minority Leader Mitch McConnell's reelection fight has featured extremely long-running, expensive advertising, and later-developing West Virginia races have also featured heavy spending.
"Every two years, it makes buying media incredibly difficult," Miller said. "Especially on the border between Kentucky, Ohio, and West Virginia, you get everyone piling in.
"We local advertisers end up getting bumped off, and if you want to compete and keep your name in front of people, you end up paying astronomical rates to do it," Miller said. He and other car dealers blame some sales trouble this fall partly on an uncertain economy and rising health care costs for their consumers, but not being able to advertise properly has also played a big role.
On a recent Monday in Denver, the 6:00 local news broadcast on CBS featured three commercial breaks in a half hour, enough time for 15 30-second TV ads in the state that's seen the largest amount of late Senate advertising. Fourteen of those 15 slots were taken by political ads, for everything from the Senate race to an expensive state ballot initiative on gambling. The 15th ad? An internal promo for the channel's evening news team. There were even more political spots on the next half-hour newscast, which featured an extra commercial break to jam them in.
That's the practical effect of over $78 million of political spending in the Denver media market this year, according to a "political update" written by sales reps at the local ABC affiliate. Colorado's Senate, gubernatorial, and House races (plus some ballot measures) have piled on top of each other, soaking up more and more of the advertising time that would usually be occupied by businesses.
"Inventory is tight and costs are high," said Ilene Nathanson, the president of Inline Media, a Denver media-buying firm. "... In developing plans with clients, we advised against TV advertising the two weeks prior to the election and in the weeks adjacent to the ballot mailing. If clients absolutely needed to be on-air during this time period, we advised against placing ads in programs that political campaigns tend to dominate."
Kathy Hagan, the co-president of a big advertising firm in Denver, said that cost isn't the only issue facing conventional advertisers when election season rolls around. People trying to skip the harsh blasts of political ads are more likely to miss the ones announcing a weekend sale, too.
"Because of the political clutter, many advertisers avoid this time frame altogether," Hagan wrote in an email.
Conventional advertisers have some retaliatory capability, though, as Miller demonstrated recently in West Virginia, when he used a precious ad slot for one of his dealerships to lampoon the political deluge.
"Some car dealers don't like coal?" a narrator says, in a tone of voice you'll recognize if you've ever watched a political attack ad. "Dutch Miller Hyundai loves coal. We eat it for breakfast, brush our teeth with it, and even hang out with it on the weekends," the narrator continues, as Miller acts along on-camera. As his 30 seconds draws to a close, Miller approves the message in the manner of a political candidate.
"That commercial has gotten nothing but incredible feedback," Miller said, adding that a lot of it was from people who appreciated the send-up. Even before he and other local businesses get the airwaves back to themselves, at least some people are still watching.