Do TV stations make a killing on political ads?

October 29, 2022 8:00 am

TV stations do bring in extra revenue from political ads, but not as much as you may think. (Photo via Canva)

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On many election days at KCCI, before the polls closed, anchor Kevin Cooney would announce during either the 5 p.m. or 6 p.m. newscast, “Ladies and gentlemen, we’ve just aired the LAST political ad of the season!” A roar would go up in the newsroom, no doubt echoed across central Iowa living rooms.

I get a question a lot this time of year. “Don’t stations rake in mountains of cash from these political ads?” The answer is yes, but perhaps not quite as much as you might think.

I’m a news guy so I didn’t deal with ads but I know enough to offer a few points you should know.

There are a lot of rules governing political ads. Perhaps the most important one is that stations must offer TV time to candidates for any office at a price called the “lowest unit charge” for a given time period. What’s that mean? It means that if a car dealer buys 50 spots in the morning news, the dealer usually gets a volume discount. But if a candidate comes in to buy just ONE spot in the morning news, the candidate gets that same lower price offered to the dealer. That price is offered to candidates anytime during a 60-day window before a general election.

There are different costs for different time periods, based on how high the ratings are for that time period. But the rules hold – candidates get to buy time for the lowest rate the station offers.

The rule does NOT apply to political action committees and outside interest groups. Advertising costs are subject to supply and demand. So, the price generally goes UP for those groups to buy ad time in a busy political season. And that’s where TV stations make money.

One other thing to remember, though, is that all those political ads we love to hate are replacing a station’s regular advertisers. Although the station is making money from the ads, it’s often at a rate below what a regular advertiser pays, or in the case of a PAC, it’s extra dollars on top of what the station might have been making anyway. The station’s regular advertisers hate the political window because they can’t get their ads on TV, which hurts their sales. Stations have to do some fast talking to keep regular advertisers happy so they’ll come back after Election Day.

Don’t get me wrong. TV station owners make a lot of money during political season. For publicly traded companies, it’s not unusual to see vast differences between revenue in odd-numbered years vs. even-numbered political years. But due to the reasons above, it’s not the pure profit that it might seem like.

Next question: “Can’t you do something about the content of the ads? The lies, the innuendo?” The answer is no. Federal law prohibits stations from making editorial changes to an ad run by a candidate for federal office and stations are required to run them. A more practical reason is that stations don’t have the staff, the time, or the desire to vet truth from fiction. I doubt any of you want stations to inject themselves into the process by saying Candidate A is telling the truth, but Candidate B is lying so we’re not going to run that ad.

In the newsroom, we tried to do “truth test” stories by reporting on the veracity of a few political ads. But it takes days, if not weeks, to vet each sentence and by the time we got the story ready to air once, the ad had already run hundreds of times. It’s like spitting into the wind.

Only about eight days left. We’ll soon rejoice to see an ad where the only person emerging from a cornfield is a farmer battling lambsquarters and cocklebur.

This column was first published by “Dave Busiek on Media” and is reprinted here through the Iowa Writers’ Collaborative.

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Dave Busiek
Dave Busiek

Dave Busiek spent 43 years working in Iowa radio and television newsrooms as a reporter, anchor and the last 30 years as news director of KCCI-TV, the CBS affiliate in Des Moines. In that role, he planned coverage of the Iowa caucuses, the floods of 1993 during which 250,000 central Iowans lost drinking water for 12 days, and organized the first national debate between Democratic candidates for president in 2015. He served as national board chair of the Radio-Television News Directors Association. In 2014, he was Broadcasting and Cable Magazine’s News Director of the Year. He was inducted into the Iowa Broadcasters Hall of Fame in 2018 and is a recipient of the Iowa Broadcast News Association’s Jack Shelley award. He is a graduate of the University of Missouri School of Journalism. He retired at the end of 2018. He is a member of the Iowa Writers' Collaborative and his blog, "Dave Busiek on Media" appears on Substack.