Political ads to go up 30% in US this election

MUMBAI: The 2012 political elections has come as a boon for the local television channels in the US as candidates are expected to spend big monies on advertising.

According to a report by Reuters, the hard-fought, and expensive, battles will provide a welcome windfall for TV stations, particularly in the most tightly contested states that will decide if President Barack Obama wins re-election or loses to his yet-to-be-decided Republican opponent.

The experts believe that spending on political advertisement will go up by 30 per cent this year as compared to 2008. The increase might be attributed to the landmark “Citizens United” 2010 Supreme Court ruling, which ended most restrictions on donations by corporations and unions. This is the first presidential election since the ruling.

As per Reuters, the Court decision encouraged the creation of Super Political Action Committee (PACs) fundraising committees that can spend money to support a candidate but cannot officially coordinate with campaigns.

“Around 85 per cent of the money that is raised and spent on advertising historically goes toward local broadcast TV. In 2012, that could total between $2.5 billion to $3 billion,” Kantar Media‘s Campaign Media Analysis Group president Ken Goldstein told Reuters.

It is expected that the ruling will help boost the fortunes of local TV stations.

CBS Corp is among potential beneficiaries, which owns stations in Colorado, Florida, Pennsylvania and Michigan.

Other beneficiaries include Rupert Murdoch‘s Fox controls stations in Michigan, Florida and Pennsylvania, and Gannett Co with channels in Colorado, Florida and Michigan.

Meanwhile, which stations cash in the most will also depend on how quickly the Republican party settles on a nominee. A long, tightly-contested Republican Primary, for instance, could mean stations in the 6 March “Super Tuesday” states such as Massachusetts, Ohio, Tennessee and Virginia could see heavy activity from Republican spenders.

Even California may get an unexpected shot of campaign spending right before its 5 June vote if the Republican race is still up in the air.