When Political Ads Come to Town, Car Dealers Feel the Squeeze

by Nick Niedzwiadek, The Wall Street Journal

When political campaigns begin to flood local TV markets with commercials, car dealers get squeezed for airtime more than any other advertisers, according to a new analysis.

Local automotive dealers predominantly buy ads during the local news—the same programming where political campaigns and outside groups concentrate much of their spending, according to research from analytics firm Kantar Media. In fact, Kantar Media’s analysis of eight markets in 2014 showed that car dealers ran slightly more than half of all their ads during local news shows, while more than 60% of political ads appeared on those same programs.

“Political and auto advertisers have both concluded that the best way to reach people is local news programming,” Jon Swallen, Kantar Media’s chief research officer, said in an interview. “The auto advertisers eventually get priced out of the market and cannot buy as much inventory as they want to, or are used to.”

During pre-election peaks when political ads make up more than a quarter of all commercials, retail businesses, lawyers, medical service providers and telecommunications firms air 30% to 40% fewer ads than normal.

But auto ads take a steeper hit, appearing 50% less frequently during those times.

Kantar Media’s analysis found that the only category of commercials that are unaffected by the amount of political ad spending is the slice of airtime that stations reserve for their own promotions and public service announcements.

“Even though they could make a ton of money selling those ads they will not dip into their own inventory to make money on political advertising,” Mr. Swallen said.

Even in the most tightly contested areas, where stations could theoretically run nothing but political spots, Mr. Swallen said broadcasters still preserve airtime for other types of commercials in order to prevent upsetting the marketers who advertise with them more regularly.

Campaigns and other political advertisers are increasingly turning to digital advertising, but television still reigns. Borrell Associates, an advisory firm that tracks media trends, has estimated that about $1.1 billion will be spent on the 2016 election on digital platforms. Meanwhile, Kantar Media has estimated that $4.4 billion will be spent on TV ads this election cycle.

However, a protracted primary season could cut into overall political spending this year, said Elizabeth Wilner, the head of Kantar Media’s Campaign Media Analysis Group. Primary campaigns only tend to inject money into states for about 10-14 days ahead of a primary vote, while battleground states during the general election can see months of heavy spending, she said.

“A long primary on the Republican or Democratic side just doesn’t compare to your average day in a competitive general election,” she said.


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