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OUTLOOK
POLITICAL
02. 2010

ADVERTISING
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TEL: 1-757-221-6641 INFO@BORRELLASSOCIATES.COM
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BORRELL ASSOCIATES MANAGEMENT


Colby Atwood, President
CAtwood@borrellassociates.com

Gordon Borrell, CEO


GBorrell@borrellassociates.com

Kip Cassino, Vice President of Research


KCassino@borrellassociates.com

Peter Conti, Jr., Senior Vice President


PConti@borrellassociates.com

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TABLE OF CONTENTS

EXECUTIVE SUMMARY .......................................................................................................................................................................................................... 4

CHAPTER I: Hot and Cold ................................................................................................................................................................................................... 5


Fig. 1: Forecast Total 2010 Political Spending, by State – Ranked by Spending per Resident Adult ............................................. 6
Fig. 2: Forecast 2010 Political Spending – Share ........................................................................................................................................................... 7

CHAPTER II: The Big “W” ..................................................................................................................................................................................................... 8


Fig. 3: Election Spending per Resident Adult, 1995-2012 ........................................................................................................................................ 8
Fig. 4: Total Political Spending per Resident Adult by Year Within Cycle – 1996-2011 ........................................................................... 9

CHAPTER III: What You See ............................................................................................................................................................................................ 10


Fig. 5: Average Political Campaign Media Spending – Percentage by Month ....................................................................................... 10
Fig. 6: 2010 Forecast Political Ad Spending, by Media Choice ........................................................................................................................... 12
Fig. 7: Forecast 2010 Political Spending by Category, in $ Billions .................................................................................................................. 12
Fig. 8: Forecast 2010 Political Spending by Category, in $ Billions ................................................................................................................... 13

CHAPTER IV: Choices from the Media Buffet ............................................................................................................................................ 14


Fig. 9: 2010 Forecast Media Spending by Campaign Type ................................................................................................................................ 14

CHAPTER V: Small but Mighty ................................................................................................................................................................................... 16


Fig. 10: Massachusetts Senate Race: Candidate Use of Social Sites ............................................................................................................... 12
Fig. 11: Forecast 2010 Online Ad Spend – Percent by Campaign Type ........................................................................................................ 17
Fig. 12: Forecast 2010 Online Ad Spending by Category ...................................................................................................................................... 18

CHAPTER VI: Online's Political Future .............................................................................................................................................................. 19

CONCLUSIONS ................................................................................................................................................................................................................................ 19

APPENDIX A: Forecast 2010 Political Ad Spending by DMA .................................................................................................... 20

COMPANY PROFILE.................................................................................................................................................................................................................... 25

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EXECUTIVE SUMMARY

While sales managers were wringing their hands over declines in ad spending in 2009, an odd thing happened.
For the first time, political campaign spending in an “odd” year – when few elections are held – actually surpassed
that of a presidential election year within the same decade. More was spent on political campaigns in the relatively
quiet 2009 than in the boisterous election year of 2000.

Welcome the endless campaign – a phenomenon that, combined with a recent Supreme Court ruling, has caused
political spending forecasts to look like a crooked smile.

We’re forecasting political advertising to hit $4.2 billion this year – almost three-fourths of it local, and most of it
centered on issues, not candidates. But when it comes to the beneficiaries there are no big ahas or uh-ohs: TV
broadcasters still command the lion’s share, and political advertising is one category where the Internet really isn’t
much of a disruptor at all. Spending on online media will total $44 million this year, barely 1% of all political adver-
tising. We don’t foresee that spilling over the $100 million mark until 2012. So while the “kid with the computer”
and “the mobile guy” might have prominent seats at the table of campaign committees, we don’t suspect they’ll be
getting huge budgets.

January’s Supreme Court ruling put a 10 percent lift on our 2010 forecast, adding more than $400 million to media
coffers. The decision prohibits the government from banning political spending by corporations. In many ways this
year will be a prelude, where political weapons are tested and strategies and tactics refined – a training exercise for
2012's battle royale. If the results from the opening salvos are any indicator, 2010 will be remembered as a year of
change in the basic structure of political campaigns.

As is always the case with local advertising, all markets won’t share equally in the bounty. “Hot” states for spending
this year will be Massachusetts, Kentucky, Pennsylvania, Colorado and a few others where issues and political races
will cause the publicity machines to open wallets. States like Virginia, Texas, Tennessee and New Jersey will run
relatively cold.

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The Borrell Associates team of researchers and analysts are the experts in local advertising. We help clients gauge
ad spending in local markets – especially online advertising – and increase their revenue share by providing detailed
ad-spending data, fact-based consultation and sales training.
Our mission is to help our clients understand what's happening to local media, how it affects their specific market,
and how they can act on it now. And we have the facts to back up our recommendations.

Market Intelligence
One of the most valuable assets you can have in your sales arsenal is market data on “local” ad spending across all media and business
categories along with profiles of how consumers in your market use the Internet.
How $13.3B in Local Online Ad
Spending was Shared in 2009
2% We offer an assortment of local online ad data that will help media companies tell the
Broadcast TV
10% best story with their advertisers and help distinguish them from the competition. This
Directories
11% 2% Magazines data also helps our clients determine the amount of online ad money available in their
Newspapers
51% Other Print markets and how that money is being spent.
23%
Pureplay
Radio
1%

One of our most popular data reports is the LA$R® (Local Ad Spend Report).
This report provides comprehensive estimates of ad spending across 11 major media types (newspapers, TV, radio, billboards, online, etc.)
including promotions, by each of the top 100 business categories in a market. Some other popular reports are:

Local Online Advertising Detail (LOAD), which provides a comprehensive view of online advertising in any local market, including
share estimates on who’s receiving that money. It also shows individual business segments (such as automotive, furniture stores, real
estate, telecommunications) and how they’re spending their interactive dollars, by ad format (display, paid search, video and e-mail).

Media Usage, which provides insights into consumer buying and media usage patterns across direct mail, newspapers, radio, TV and
Internet, including things such as items purchased, coupons redeemed, etc. It shows current Internet access rates for local markets,
top uses of the Internet, time spent online, etc.

In addition to 25 different data reports we also offer custom market data reports. Our researchers can generate unique data sets that
provide insight into a variety of market segments, in any local market, using our highly-refined and industry-praised methodology.

1643 MERRIMAC TRAIL, SUITE B, WILLIAMSBURG, VA 23185


TEL: 1-757-221-6641 INFO@BORRELLASSOCIATES.COM
Online-Sales Training
"The Interactive Revenue Acceleration Program from Borrell Associates produced immediate results for our media group.
We generated new interactive revenue across four local properties within the first week! We realized a 5-to-1 return on our investment.
Our local staff received great local market information and interactive sales training. We would recommend this program to anyone
interested in moving the needle in the short and long term."
Todd A. Porch, Senior Vice President, eMedia Nexstar Broadcasting Group, Inc.

“This has been one of the best resources we have ever worked with and it has been great training for our staff.
Your presentations marked a turning point for our sales and we have more than doubled our revenue from March.
What more could we have asked for. And we’re still climbing and use the data all the time.”
Chris Tingle, General Sales Manager KTAL NBC 6 / Arklatexhomepage.com

Our Interactive Revenue Accelerator program has jump-started hundreds of online ad sales, producing almost $3 million dollars
for local sites this past year. We come into your market, and in just one day, educate hundreds of potential advertisers the benefits of
advertising on your Web site.

We also provide hands on, in-the-field training that utilizes local Web usage patterns and
the ad spending data to build dynamic, compelling sales pitches. The program also offers
guidance on sales team recruitment, compensation, staff structure, rates and marketing
materials.

Consulting
Uncover the advertising potential in your local marketplace by drawing on the benchmarking we conduct throughout the year with
thousands of local media operations. Our top-level analysts can work directly with executives, managers or front-line employees to help
your company’s online operations develop, grow and thrive. We work with Internet pure-play businesses, newspapers, TV and radio
stations including vendors who provide enabling technology to these outlets. We provide executive-level strategies that focus on
helping your company grow local advertising revenues exponentially rather than incrementally.

Research
Reports We publish 10 to 12 research reports per year, also available through an annual subscription,
that provide an in-depth look and analyze major trends in local online advertising. Reports
include annual revenue benchmarking for local media sites; reports on the automotive,
real estate and recruitment verticals; and an annual outlook report published in early fall
designed to provide next-year budget guidance.

Conference and Company Meeting Presentations


We conduct hundreds of presentations every year, typically for executive management, industry seminars and trade conferences. Each
presentation is tailored to your needs. We tie the "big-picture" analysis into actionable information about the audience's specific markets.
These presentations are challenging, insightful and filled with projections for new advertising formats and trends.

Webinars
Borrell Associates can host and deliver an exciting Webinar for any organization or
association. Our topic list is extensive, and we tailor a presentation for each audience.
We offer research and factual evidence backed by real-world experience.

Some popular Webinars are:


“The Top 5 Online Advertising Recommendations for Your White Board in 2010”
“Making Money With Online Video”
“The Online Moneymakers”
“Overcoming Online Ad Sales Objections”

Contact us today at 1-757-221-6641, or visit us at www.borrellassociates.com, and increase your Web revenues immediately.

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