Profit and Money Spent: 2016 TV Political Ads

During times of peak demand (during the election), stations can sell political ads spaces for 40-50 times more than a regular television ad. Political advertising is now over 10%-12% of average revenue and it keeps growing at a fast rate. This growth is making political ad spots disproportionately valuable.

During the 2016 election, the campaign was set to break records due to the fact that it was the first-ever election without an incumbent presidents running, so there was no financial restrictions. Corporation are allowed to spend as much money as they would like to support or defeat the presidential candidate. The advertising volume was at 122% over 2012 levels several months before the election was to even take place. Digital ads were expected to reach an all time high when this article came out, but interestingly enough the bulk of the money was estimated to go to local broadcast tv.

All of the money spent will become revenue on the other side of the ad business. Some of the broadcasters that were predicted to make the most from the presidential election E.W. Scipps, Gray Television, Tenga, Sinclar Broadcasting Nexstar, Tribune, Media General, Entravision,  CBS, Comcast, the Television Bureau of Advertising.Advertisers have also been more aggressive in buying time in the third and fourth quarter than previously because they they don't want to have to compete for inventory if there is a possible sell-out and end up paying a sky-rocketed rate. A whopping 50% of political ad money goes to media companies in the first 5-6 weeks of the fourth quarter.

However, while the next political payday is a few years away, investors cannot assume that the TV will remain in such high demand on the  political advertising market. Social Media is becoming increasingly popular in today's world and this will sure to be reflected in the future of political advertising.

News Article: https://www.thestreet.com/story/13594342/1/tv-political-ad-spending-will-break-records-in-2016-and-these-broadcasters-will-cash-in.html