Michael Bloomberg dug into his deep pockets and won the New York City mayoral race last week. Bloomberg also made a winner out of Time Warner City Cable, which saw a big boost in political advertising revenue.
Although his treasurer declined to comment, reports last week put Bloomberg's total spending for the race against Democrat Mark Green at more than $50 million. According to Phil Cunningham, director of sales at Time Warner City Cable, the company took in $4.1 million on total political advertising (including nonmayoral races). Bloomberg spent $1.6 million and Green $575,000; 39% of these totals was spent on NY1, Time Warner's around-the-clock news channel.
?It was our best year ever,? says Cunningham.
Bloomberg's campaign is the second-most solvent nonpresidential campaign in American history (topping the list is last year's campaign by Democrat Jon Corzine, who, propelled by nearly $63 million of his own money, now represents New Jersey in the U.S. Senate). His $50 million tab places him about $10 million ahead of fellow Republican Rick Lazio, who lost the U.S. Senate race to Hillary Rodham Clinton last year in New York.
Bloomberg's spending outpaces the gross advertising revenue of Bloomberg Television's rival, CNNfn, the financial-news network whose number of subscribers is comparable to Bloomberg Television's estimated 18.5 million. CNNfn will generate around $44 million in gross advertising revenue this year, according to Kagan World Media, the databook and newsletter publisher that, like Cable World, is a subsidiary of Media Central. (Bloomberg Television, a unit of Michael Bloomberg's private company, Bloomberg LP, doesn't publicly disclose revenues.)
Although Time Warner City Cable's $4.1 million is nearly three times the previous record of $1.5 million (from four years ago, when Mayor Rudolph Giuliani was reelected), according to Larry Fischer, EVP-Time Warner Cable Ad Sales, cable isn't receiving its rightful share of advertising dollars. ?A fair percentage for cable is one that covers the market,? says Fischer, adding that cable should get 22% of the money spent on television advertising.
Instead, the $2.2 million that Time Warner City Cable collected from both candidates was 5% of the $43 million that Cable World estimates both candidates spent on all television advertising.
The percentage is smaller ?because the buys are made by people who aren't media experts. They're experts in message,? says Kevin Barry, VP-local sales and marketing at Cabletelevision Advertising Bureau, referring to political media strategists' lack of knowledge about the benefits of cable advertising. ?They tend to do things the way they did them 20 years ago.?
Political media strategist and buyer Saul Shorr, president of Shorr and Associates in Philadelphia, disputes that claim. Shorr says that while it's fair for cable evangelists to say that they bring non-network viewers to potential advertisers, ?the bottom line is that the cost per household [reached] is still more expensive.? Other problems that might irritate a political planner, Shorr says, are the general inability to specify the times a cable ad will run and, despite cable's much-touted targeting ability, the very small relative share claimed by most networks that a candidate might want to target.
Bloomberg's cable ad spending ? and the fact that he won the election ? is still good news for Time Warner. ?He recognized the value of cable,? says Fischer, even going so far as to say that Green might have fared better had he spent more on cable advertising.
To secure advertising commitments from the mayoral candidates, Time Warner City Cable visited the political planners ? as far away as Chicago and Atlanta ? and made their pitches. ?We circled the wagons early,? Fischer says. His sales staff's mantra: ?Cable doesn't waste.?
Data from Time Warner City Cable's VP-research, Phyllis Liebert, concluded that a person who has cable is much more likely to vote than someone who lives and dies by a tinfoil-topped antenna. ?We as an industry are mindful of elections, and that's a sea change,? Fischer says. The sales force sold what amounts to 4% of their yearly sales.
Although cable hasn't reached the level of parity with broadcast that advertising execs seek, what Fischer calls ?a windfall in an otherwise windfall-less environment? certainly helps during lean advertising times. And though his group planned for the election, made substantial sales and, as Fischer says, ?got our just rewards,? he couldn't help but conclude: ?God bless Michael.?
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