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Estimating the Cost of Campaign Advertising: A Cautionary Note

- April 28, 2008

The other day I noted the contributions that the Brennan Center at NYU and the Political Advertising Project at the University of Wisconsin have made to our understanding of how often campaign ads are shown, at what cost, to how many people, and with what effects (click HERE). Now, though, comes word that one component of these data — the cost estimates — may be less reliable than had previously been supposed.

Let’s begin with a brief review of where these cost estimates come from in the first place. (The source of the following is Michael G. Hagen and Robin Kolodny’s article, “Finding the Cost of Campaign Advertising,” in the latest issue of The Forum, published by the Berkeley Electronic Press. For an abstract and directions about downloading the article itself, click HERE.)

For the last decade, the Campaign Media Analysis Group (CMAG), which is a division of TNS Media Intelligence, has been monitoring political, public affairs, and issue advocacy advertising on seven TV broadcast networks, 44 national cable networks, two Spanish-language networks, more than 200 syndicated programs, and broadcast stations in the 100 largest TV markets in the country. CMAG catalogues an array of information about each airing (date, time, length, sponsor, and so on). It also estimates, for each airing of an ad, the cost of the airtime. As Hagen and Kolodny outline the cost estimation process:

bq. The estimates are based initially on a monthly survey of television station executives, advertising agents, and time buyers, who report the average price in their market of a thirty-second spot to be aired during the month ahead at a particular time of day. CMAG uses this “daypart” information about advertising rates in general to approximate the cost of particuilar spots on particular stations purchased by particular political sponsors. The process for constructing these specific estimates is proprietary, but it is grounded in ‘specialized research on advertising trends for political and issue advocacy advertising,” and includes adjustments for the fact that “rates for political advertising often can deviate from the standard rates used for non-political advertising.”

That’s obviously an extremely comprehensive data gathering process. Even so, CMAG misses some expenditures because it monitors “only” the major stations in the major markets and because it doesn’t monitor local cable networks. Moreover, campaigns often have to pay premium rates to secure particular non-preemptible time slots, and TV stations often raise their prices as the end of the campaign nears. These considerations imply that, if anything, the CMAG expenditure figures should underestimate the total that is spent on campaign ads — a claim that is routinely made when these expenditure figures are presented.

This is where things get interesting.

Although Hagen and Kolodny are from Pennsylvania, not Missouri, they are of a “Show Me” cast of mind. To assess the accuracy of the CMAG estimates of airings and expenditures, they scoured the records of TV stations in Philadelphia and matched this information against the CMAG estimates. Two results stood out:

bq. In terms of airings, the CMAG data and their own compilations matched almost perfectly, “confirm[ing] that CMAG provides an extraordinarily accurate record of when and where campaign advertising airs.”

bq. However, “CMAG does not underestimate the cost of advertising at all. Instead, CMAG overestimates the cost, by 19 percent — nearly $7 million.” No less problematically, the magnitude of the overestimate varies greatly across stations and sponsors, so the CMAG estimates “cannot be treated as if they are all simiply inflated by a constant, either in dollar or percentage terms.”

And bear in mind that Hagen and Kolodny’s $7 million figure is for Philadelphia only; if it is indicative of a nationwide gap, it will obviously come to a great deal more than that.

The availability of the CMAG data has been a true boon to research on political advertising, but these results suggest the need for caution in using their expenditure estimates and for skepticism about whether these estimates truly understate the actual amounts being spent on campaign ads.