Don­ald Trump in­vented a new model for cam­paign ad­ver­tis­ing. But it only works for him

▶ Don­ald Trump may not need tele­vi­sion ads, but other cam­paigns still do ▶ “What ev­ery­one has to think about is: Is this the last hur­rah?”

Bloomberg Businessweek (North America) - - Contents - Tim Hig­gins

Priorities USA Ac­tion, the Demo­cratic su­per PAC that backs Hil­lary Clin­ton, said in mid-may that it had re­served $96 mil­lion in tele­vi­sion air­time lead­ing up to the Novem­ber gen­eral elec­tion. The an­nounce­ment was cal­cu­lated to tele­graph the se­ri­ous­ness of the Democrats’ cam­paign against pre­sump­tive Repub­li­can nom­i­nee Don­ald Trump.

Trump re­sponded with a short, cheaply made video fea­tur­ing a pho­to­graph of a young Bill Clin­ton smok­ing a ci­gar trans­posed with an im­age of the White House. The voices of two women who claim the for­mer pres­i­dent made un­wanted sex­ual ad­vances plays in the back­ground. “Here we go again?” pops up in the clos­ing frame. The clip, posted to In­sta­gram, went di­rectly to 1.6 mil­lion peo­ple.

Trump has ben­e­fited from free cov­er­age from news me­dia in a way that no mod­ern can­di­date has (es­ti­mated value: $3 bil­lion). His cam­paign spent only about $19 mil­lion on TV ads in the pri­maries, ac­cord­ing to Kan­tar Me­dia’s Cam­paign Me­dia Anal­y­sis Group (CMAG), which tracks ad spend­ing. That was far less than Jeb Bush, whose su­per PAC blew through $70 mil­lion. Trump has also been a shrewd user of so­cial me­dia, where he main­tains a di­a­logue with his sup­port­ers.

But his ap­proach, based largely on his celebrity, is one that can work only for him. For ev­ery­one else, TV ads are still the pre­ferred means of reach­ing the most po­ten­tial vot­ers. Pres­i­den­tial can­di­dates and su­per PACS spent more than $400 mil­lion this pri­mary sea­son. To­tal TV ad spend­ing by all cam­paigns, in­clud­ing state and lo­cal races, is ex­pected to reach $4.4 bil­lion, ac­cord­ing to CMAG, eclips­ing the record $3.8 bil­lion spent in 2012.

Broad­cast­ers reaped record rev­enue from cam­paigns for the first quar­ter of the year. Tri­bune Me­dia, which owns or op­er­ates 42 lo­cal TV sta­tions, in­clud­ing some in Florida, Ohio, and Penn­syl­va­nia, fore­casts tak­ing in $200 mil­lion in po­lit­i­cal ads this year, a 20 per­cent in­crease from 2012. “Po­lit­i­cal has been a ma­jor tail­wind for us for a num­ber of years,” says John Rogers Jr., chair­man of Ariel In­vest­ments, which has in­vested in TV sta­tion own­ers Mered­ith and Tegna, the me­dia arm spun off from Gan­nett last year. “It just con­tin­ues to grow and sur­prise.”

The sus­tained in­crease has been driven in part by con­gres­sional and gu­ber­na­to­rial can­di­dates as the amount of money avail­able for such cam­paigns has grown, thanks to the 2010 U.S. Supreme Court rul­ing that re­laxed lim­its on cam­paign do­na­tions. More than 137,000 broad­cast TV spots have al­ready run since Jan­uary for House and Se­nate races, at an es­ti­mated cost of $122 mil­lion, ac­cord­ing to CMAG. The po­lit­i­cal groups backed by con­ser­va­tive bil­lion­aires Charles and David Koch and their as­so­ciates have com­mit­ted more than $42 mil­lion to re­serve ad time through Septem­ber to ben­e­fit Se­nate can­di­dates in Ne­vada, Ohio, Penn­syl­va­nia, and Wis­con­sin. The Koch groups also ex­pect to spend heav­ily on the Se­nate race in Florida.

The flood of TV ads comes even though fewer peo­ple are watch­ing broad­cast and ca­ble TV than were watch­ing four years ago. Ac­cord­ing to rat­ings com­pany Nielsen, prime-time au­di­ences have shrunk 9 per­cent since 2008. Over­all TV ad sales would be flat this year from last if not for the elec­tion and the Sum­mer Olympics, ac­cord­ing to me­dia buy­ers Magna Global.

Po­lit­i­cal spend­ing on dig­i­tal ads is fore­cast to soar to $1 bil­lion this year, from about $159 mil­lion in 2012, ac­cord­ing to es­ti­mates from Bor­rell As­so­ciates, an­other ad-track­ing com­pany. The es­ti­mate in­cludes $35 mil­lion spent by Priorities USA to bol­ster its pro-clin­ton TV cam­paign. That should con­cern TV sta­tion own­ers who think po­lit­i­cal spend­ing will con­tinue to grow ev­ery elec­tion cy­cle, says Richard Green­field, a me­dia an­a­lyst for New York-based re­search firm BTIG. “I think what ev­ery­one has to think about is: Is this the last hur­rah?” he says.

The shift to dig­i­tal might be even more pro­nounced this year if not for con­tracts that give po­lit­i­cal strate­gists a per­cent­age of ad spend­ing. That cre­ates an in­cen­tive for them to max­i­mize the amount of air­time can­di­dates buy. “The dol­lars [will] go to TV un­til the con­sult­ing class changes the way they get comped,” says Bill Day, a vice pres­i­dent at me­dia con­sult­ing firm Frank N. Magid As­so­ciates. “The sys­tem is rigged to drive TV ad­ver­tis­ing.”

As he grows $122 into his role as the de facto leader of the GOP, Trump has em­barked on a pro­gram to raise more than $1 bil­lion by Novem­ber. He’s also es­tab­lished a joint fundrais­ing com­mit­tee with the party—the Trump Make Amer­ica Great Again Com­mit­tee— that al­lows donors to give as much as $449,400, which will be split among the can­di­date and na­tional and state party cof­fers. The money will pay for of­fices and field staff, as well as TV ads.

Younger Repub­li­can strate­gists say Trump should push to bring the party into his post-tv world. In 2014, Bent­ley Hensel, then 22, re­lied on dig­i­tal ads placed on Face­book, Google, and Pan­dora to help his rel­a­tively un­known can­di­date win a dis­trict at­tor­ney race in ru­ral Louisiana, while his bet­ter-fi­nanced op­po­nents bought lo­cal air­time. “We pretty much owned the in­ter­net in Rapi­des Parish,” says Hensel, who’s since moved to Vir­ginia to work as a GOP con­sul­tant. TV ads just don’t work very well, he says: “You’re tak­ing a sledge­ham­mer to a job that takes a scalpel.”

The bot­tom line Pres­i­den­tial can­di­dates and out­side groups spent more than $400 mil­lion in the pri­maries; Don­ald Trump spent $19 mil­lion.

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