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Donald Trump’s Candidacy Is Taking a Toll on Political Ad Spending

Donald Trump’s controversial candidacy is already dampening political ad spending, and there are reasons to believe the negative Trump effect could get worse.

All the major TV station owners have reported second-quarter results, and the political-spending sector was a mixed bag.

The pattern is quite different this year from 2012. During the Barack Obama vs. Mitt Romney general election, spending ramped up quickly in the second quarter, right after the Republican primary. This year, the percentage of total ad spending from political advertising dropped from the first to second quarters at all four major companies. Three of the four saw a lower percentage of political ad spending in Q2 2016 than in Q2 2012. (Meredith saw a slight increase.)

sources: Company Reporting, jackdaw research Analysis

Commentary from these and other companies that own local TV stations suggests they’re putting on a brave face. Some argue that the drawn-out primaries on both sides pushed spending into the third quarter; others say presidential election years are always back-loaded and are confidently projecting higher spending in Q3 and Q4.

But the fact remains that Trump isn’t spending on advertising. According to Advertising Analytics, the Hillary Clinton campaign and pro-Clinton PACs have spent more than $90 million on political ads since the end of the primaries. Trump, amazingly, has spent zero. (Trump PACs have spent $8.2 million.)

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And there may be a secondary Trump effect. If the polls continue to show massive leads for Clinton even in what are normally major battleground states, her campaign may decide that it simply doesn’t need to spend as much as it otherwise would have. Advertising is always heavily concentrated on states where the race is the closest; if there are fewer of those states, spending could be pared back.

sources: Company Reporting, jackdaw research Analysis

Bear in mind that presidential ad spending is a small component of overall political spending. Most observers peg combined candidate and PAC spending for the presidential election at one-third of total political spending, while outliers like Meredith project an even lower contribution.

As such, many station owners are banking on strong spending by candidates for Senate, House, and gubernatorial races to deliver strong numbers through the rest of the year, even if spending for presidential campaigns remains weak. In some cases, the presence of less palatable candidates at the top of the ballot may force down-ballot candidates to spend more in order to get the word out. The big question is whether that spending will be enough to make up the difference. With most station owners having projected a big year due to the elections, there’s quite a bit at stake.

Jan Dawson is the founder and chief analyst at Jackdaw Research, an advisory firm for the consumer technology market.

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