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The Trump effect on TV ad revenues

News, 24 October 2016

NEW YORK: Donald Trump's relatively low level of spending during the presidential election campaign is being felt by local TV networks, but his clashes with rival Hillary Clinton have boosted CNN's outlook for 2017.

As reported by Adweek, media forecasting firm Magna originally projected this year's political adspend to rise 15% above what was spent in 2012, but it's looking like it will work out about the same.

"When Trump was a candidate in the primaries, he spent very little," explained Vincent Letang, EVP of Global Marketing Intelligence at Magna.

"We thought once he got the nomination and gained more access to GOP fundraising, he'd spend closer to what Romney did during his general election [of 2012]. That didn't happen."

Letang added that Magna had been expecting Virginia to become a key battleground state, but instead Hillary Clinton has been spending more in Arizona, which "comes as a surprise".

"[Donald Trump] is not nearly spending what Mitt Romney or John McCain's campaigns did eight years ago," added Mark Fratrik, SVP and Chief Economist at BIA/Kelsey, the marketing consultancy. "That disappointed the outlooks of local media companies."

However, he went on to point out that more adspend is being earmarked for digital because it offers a "low cost" option for political marketers. Indeed, Magna expects digital adspend to match TV for the first time this year, with both generating $68bn.

The experience of local TV networks also appears not to be affecting CNN, the national news broadcaster, which expects a significant boost to its ad revenues in 2017 on the back of the rancorous, but "entertaining", presidential campaign.

According to Donna Speciale, President of Ad Sales at Turner, CNN's parent company, CNN expects upfronts revenue for next year to increase by as much as 50%.

"News has become the new prime-time entertainment. The election, I hate to say it, is entertaining," she told Beet.TV.

"Everybody's tuning in. CNN.com is booming, CNN Go is out of control. I don't think it's going to reduce after the election is over," she added. "The inauguration has to happen in the first quarter, it's going to continue the momentum."

Data sourced from Adweek, Beet.TV; additional content by Warc staff