Political Ad Bonanza a Boon for Broadcast

For once, the lackluster economy could actually be a boon for the media industry. As a key issue for voters in this year's elections, it will feature prominently in political ads -- set to cost around $9.8 billion in 2012, a 63% increase over 2010, according to estimates by research firm Borrell Associates.

The boost comes amid an arms race in political spending, accelerated by the 2010 Supreme Court decision that removed restrictions on political expenditures by corporations and unions. Even though there were only midterm elections in that year, political ad spending still topped 2008's total. In 2000, political advertisers spent $18 per U.S. adult. This year, Borrell estimates the figure will be $42. Around 60% of that is expected to go to broadcast TV, with much on national deals with TV networks. But local stations in swing states like Florida, Iowa, Ohio, Nevada, Pennsylvania and Wisconsin will also get their share of presidential ad dollars. And the rise of political action committees, which tend to focus on a particular candidate, initiative or piece of legislation, has funneled more money to local issues. That bodes well for E.W. Scripps, Media General, Journal Communications and Gray Television—broadcast-focused companies with TV stations in large battleground state markets. Meredith and Gannett may see some additional ad dollars in markets with contested gubernatorial and U.S. Senate races, but their businesses are still primarily focused on print publishing.