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Local TV Ad Spend to Win Gold From the Olympics—and the Elections

February 7th, 2018   ||    by Monta Monaco Hernon   ||    No Comments

Local advertising revenue will jump to $151.2 billion in 2018, according to a December 2017 forecast by local advertising researcher BIA/Kelsey. If this prediction comes true, it will represent a 5.2 percent increase over 2017’s $143.8 billion.

Local TV ad spend will then make up 13.8 percent of the total—with a potential $20.8 billion in revenue. It’s a huge boon for local TV, but where will all the money come into play?

The Big Game—and the Games

The Winter Olympics are about to kick off, drawing viewers across demographics. NBCUniversal has the rights to broadcast the games again. It will air live across time zones in the U.S. to create a “unique national collective experience,” said Jim Bell, president at NBC Olympics production and programming, to Broadcasting & Cable. People in California will see the events unfold at the same time as their New York family and friends. The idea is that this will encourage a wider viewing audience.

It’s true digital media and streaming has opened up the Olympic universe—allowing coverage of less popular events and the opportunity to watch more of them live. Of the 2,400 hours of Olympic coverage this year across NBC’s platforms, the majority will be on digital outlets. But the most popular sporting events—176 planned hours of them—will be shown on NBC, beginning on February 8 with live figure skating.

NBC has a unique opportunity this year. It’s the first network to have the rights to both the Super Bowl and the Winter Olympics, which will essentially happen back-to-back. The network is offering advertisers what might be called a one-two punch: buy a Super Bowl ad and get Olympic spots to boot.

With Super Bowl ads costing around $5 million in 2017, the hope is that the carrot of coverage in both the biggest sporting night of the year and the biggest sporting event might assuage the pain felt in the corporate wallet, said Dan Lovinger, executive vice president of ad sales at NBC Sports Group, to Variety.

There were no specifics on the terms of this Super Bowl and Olympics two-for-one. However, NBC did note that TV viewership tends to increase 16 percent during big events like the Super Bowl and the Olympics. This provides quite an incentive for advertisers to take to the screens and contributes to the positive forecasts for this year’s local TV ad spend.

The Election Effect

Midterm elections are also taking place in 2018—and this year’s could prove contentious. Several issues percolating under Trump’s presidency might add fuel to an already hot fire.

The result: more money pouring into advertising.

Most political advertising dollars still go to television, according to The Cook Political Report. In 2014, the total TV ad spend was upwards of $2.8 billion, and this year’s playing field looks similar. There are 42 House seats being contested, and Cook currently predicts that 12 are toss-ups. In the Senate, there are nine Senate seats up for grabs, with the outcome of four deemed uncertain.

Congressional and gubernatorial races will likely bring in the bulk of the local TV ad spend—Cook predicts 70 percent. But certain state legislative races are high-stakes this year, with the redrawing of district lines coming up. Issues like Deferred Action for Childhood Arrivals (DACA) and healthcare could also bring dollars to advertising.

Cook estimates local broadcast will still take the bulk of these TV ad dollars, with $2.4 billion in political advertising compared to local cable’s $850 million. Of course, local television offers natural geographic targeting, but there are myriad of other benefits to advertising on local stations.

Trust is a big one. Sixty-eight percent of respondents in a Videa-sponsored survey said they trust local news over national news—one of the main reasons being that they believe local news sources have less of a bias.

This trust can become part of what’s known as the halo effect: If a viewer chooses local broadcast based on trust, that feeling of trust might carry over to the advertisements seen during that programming.

The sell becomes even more compelling with the advancement of programmatic TV. A campaign can carry a strategy across media more easily and therefore take advantage of the benefits of local television while following the viewer to other devices as well. This would work for both the elections and the Olympics and Super Bowl, increasing the effectiveness of these events well past the one-two punch of TV coverage.

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