The art of ad buying

The rumors spread quickly, from one media buyer to another, whispers of a
new player in the special election–one going by the name of California
Republicans for Public Schools. No one at the Alliance for a Better
California, the union coalition lined up to oppose Gov. Arnold
Schwarzenegger’s initiatives, could even confirm the group’s existence,
though the new campaign group had supposedly spent much of the last week
inquiring about buying television ads across California.

Rumors of shadow campaign groups, and potential six- or seven-figure ad
purchases are all part of the head-faking that media buyers perform as they
jockey for any edge they can get in high-stakes, high-cost world of
television ad purchasing.

Now the governor’s political foes are wondering whether Schwarzenegger’s
campaign is playing coy, or is just low on cash. Schwarzenegger’s California
Recovery Team has spent relatively little money on television this year, and
has not booked any television advertisements for the final two weeks of the
campaign, according to public records and sources in and out of the television industry.

Meanwhile, the governor’s opponents have spent more than $10 million in TV
spots so far this year, saturating the airwaves with anti-Schwarzenegger
messages, resulting in a precipitous drop in approval for the governor.

Those are advertising dollars that largely went unanswered. The governor’s
campaign team has declined to comment on their media buying strategy or
funds they have for ad buys, but some Republicans are questioning the
governor’s strategy.

“The governor fires up his message machine at the point when the voters are
already in election mode and their eyes are already starting to glaze over,”
said Republican pollster Adam Probolsky. “The governor made a mistake by not
coming out earlier.”

Team Schwarzenegger did finally go on the air last week, with the California
Recovery Team’s first major media buy of the campaign.

But because they booked late, they paid a premium. Unlike candidate races
where television stations are forced, by federal regulations, to offer ad
space at the “lowest unit cost” (i.e. the cheapest price that ad space has
been sold for, to either commercial or political buyers), there are no such
regulations of ad prices for initiative campaigns. And so the prices go up
the later a campaign books their spots.

“They are very much at the mercy of the stations,” said Darry Sragow, a
Democratic political consultant and former radio station owner, who is not
working for any of the special election initiatives. “Buying television time
is like going to a market. It is an absolute auction, whoever is willing to
pay the highest price for that slot gets it.”

Information on who is booking what, when and for how much is a regularly
traded commodity between ad salesmen and political advertisers. Some ad
bookers swear by waiting until the last possible minute to secure spots–at
a cost. Others rely on years of careful honed relationships to ensure they get
first wind of any shifts in political advertising.

Book at the last minute, and one’s opponents won’t know what hit them until
it hits the airwaves. But wait too long and all the prime ad property gets
booked up–with the only way to elbow out the competition being an all-out
bidding war.

That market mechanism is not only driving up the costs of advertising, but
as Richard Temple, whose consulting firm, McNally Temple Associates,
produces and buys ads for the Alliance, says, “Someone buying late in the
campaign is going to find inventory on short supply and cost skyrocketing.”

The California Recovery Team had to pay up to 50 percent more per spot than
the pharmaceutical industry for its TV purchases on KCRA, the leading
station for political advertising in Sacramento. That is because
Californians Against the Wrong Prescription, which is funded by the
Pharmaceutical Research and Manufacturers of America (PhRMA), has purchased
all their ads in advance–already booking up slots through the special
election. Schwarzenegger’s campaign booked ads with much less lead-time and
for a shorter total duration–from September 22 through September 28.

For example, on Monday, during Schwarzenegger’s appearance on the Tonight
Show, CRT purchased one 30-second spot for $1,500. The pharmaceutical
companies bought the same spot, on the same show, on the same night for $300
less. Earlier that evening, Schwarzenegger’s group aired an ad during KCRA’s
6pm news for $4,500, compared to $3,000 for the same spot for PhRMA.

Those increased costs, translated statewide, put a huge financial burden on
a campaign that has struggled to compete with the well-funded union effort.
“There is a theory in the media buying business, to buy time in short
increments so you don’t know what the other side is doing. I think the
governor was doing some of that,” says Gale Kaufman, the top consultant for
the Alliance for a Better California.

But, she adds, “there’s little to be gained in my mind by trying to be cute. I always
buy backwards–always make sure I’ve paid for my last two weeks of TV.”

Kam Kuwata a Democratic political consultant who has done work for Sen.
Dianne Feinstein, agrees that if the Schwarzenegger camp had the funds, they
would buy ads now.

“I have been in campaigns where you cannot budget, and it is far easier to
be able to budget,” said Kuwata. “You can hire so many field people, so many
press people, so many media buys. The media buy is always the biggest chunk
and you work backwards so the week between the last Tuesday and Election
Day–I call that week one.”

But for the crucial final two weeks of the campaign, Schwarzenegger has yet
to book any television advertisements, though few doubt that the campaign
will eventually be on the air.

“They have the overriding problem of the [lack of a] hard and fast cash
flow, but the opponents of the governor’s incentives have a predictable cash
flow,” says Kuwata, explaining the lack of pre-booked ads.

But not everyone agrees.

“I don’t believe the governor has or will ever have a money issue. He can
write a check or make 10 phone calls and have as much money as he needs,”
says Probolsky of Schwarzenegger, who recently deposited $1.25 million into
this year’s campaign. “The kind of people he hangs out with can easily fund
any campaign needs he has.”

Mike Murphy, Schwarzenegger’s top campaign strategist, has previously
promised that the campaign will have enough money at the end to drop “one
grand piano,” saturating the airwaves with their message. But the lack of
predictable funds leaves the campaign in a paradox: forced to choose between
booking ads they may be unable to pay for, or waiting–and paying premium
prices for whatever is still available closer to the election.

Temple admits that there may be some strategy to Schwarzenegger’s delay in
purchasing ads, saying “If we don’t know what they are doing until the last
minute, it makes it harder to react.”

And that mysterious group, the California Republicans for Public
Schools–they may end up purchasing a blitz of ads for the Recovery Team. Or
they may not.

Either way, says Temple, “by not showing that, they drive up their own

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