US 2016 candidates stay tuned to TV advertising

US politicians may use Twitter to launch their presidential bids and Meerkat to live stream campaign stops, but when it comes to political ads for 2016, the 30-second television spot is still expected to reign supreme.

Broadcasters are set to receive a record-setting flood of money from candidates and their supporters next year, according to a new projection from Moody's Investor Services.

Early estimates suggest political ad spending will reach at least $3.4bn, a 20 per cent increase from 2012's $2.9bn, said Carl Salas, senior credit officer at Moody's. That would buck the trend for US TV advertising, where growth has stalled.

The influx will provide a much-needed boost to broadcasters who are seeing their ratings decline and overall ad revenues erode in the face of competition from digital media, which is luring viewers and marketers. Political advertising can account for 9 to 21 per cent of revenues for broadcasters in an election year, depending on how many local stations they own in battleground states.

While political campaigns are embracing online tools to target the most likely voters with personalised pitches, the majority of their budgets are still devoted to broadcast TV.

"Television commands a premium for attracting a mass audience. For a candidate to brand himself and the campaign broadly, broadcast TV is where you go," Mr Salas said.

The projected boom in the 2016 political cycle is in large part due to the spending firepower unleashed by the Supreme Court's 2010 ruling lifting limits on campaign spending by companies and trade groups, which has allowed super-political action committees, or super-PACs, to flourish.

"Political spending defies gravity since the Supreme Court decision," Mr Salas said. "It'll be the first presidential race without an incumbent [since the ruling]. Spending was at record levels in 2012 and we expect spending in 2016 to reach new record levels because you will have two heated campaigns and money is already being raised by the PACs, such as the Koch brothers."

Political action committees connected to the conservative billionaires Charles and David Koch have pledged to spend nearly $1bn, exceeding the $800m that all super-PACs raised in 2012, Moody's noted.

Moody's projects total broadcast ad sales will fall 6 to 9 per cent this year from 2014, when the midterm election and the Winter Olympics helped lifted spending 8.5 to 10.5 per cent.

Core spending from non-political advertisers including car companies, retailers and the services sector is expected to rise 0.5 to 2.5 per cent in 2015 after declining the previous year.

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