Press

Health-Care Debate Is Tonic for Local TV

By Suzanne Vranica and Alicia Mundy

Local television stations, suffering from steep declines in ad spending, are getting a much-needed shot in the arm from lobbying groups trying to sway the national debate over health care.

Altogether, groups on various sides of the debate have spent an average of about $1 million a day in recent weeks, analysts say. Some ads from conservative groups say Democrats want to bring Canadian-style, government-run health care to the U.S. Supporters of health-care overhaul, meanwhile, have resurrected "Harry and Louise," the fictional couple whose on-screen fretting about government involvement in their medical decisions helped sink the Clinton administration's effort to revamp the health-care system.

The TV spot above from Families USA is one of many from consumer-advocacy and trade groups weighing in on the debate over health-care overhaul. This time, the couple are singing a different tune, calling for legislation to guarantee coverage for Americans with pre-existing medical conditions. "Advertising is cranking" says Evan Tracey, president of the Campaign Media Analysis Group at TNS, a research firm owned by ad holding company WPP.

TNS says health-care-issue advocates have spent about $41 million this year on local-TV spots, more than half of it in the past few weeks. If the debate over health-care legislation drags into the fall, as now seems likely, the figure could rise to $250 million, Mr. Tracey says. The delay "would open the door even wider for opponents to appeal to the public," he adds. For the local-TV business, such a surge in spending could be just what the doctor ordered. Local stations have taken a bigger hit than other media in the current ad downturn, in part because of their heavy reliance on auto advertising. Nationwide, TV-station ad revenue is expected to drop 20% to 30% this year, according to Bernstein Research.

So far the lion's share of dollars in the health-care debate has been spent on local-TV stations and national cable news networks, such as Time Warner's CNN and News Corp.'s Fox News. (News Corp. also owns The Wall Street Journal.)

Lobbying groups are directing many of their local-TV dollars to states like Louisiana, Maine and Pennsylvania to get voters to call lawmakers with key roles in the health-care finance battle. "We have gotten about $80,000 over the past four weeks," says Bud Brown, general manager of WWL-TV, a Louisiana station owned by Belo. "It's not market-changing, but it is significant." Tom Kane, president of CBS's local TV-station group, says the broader health- care category "is jumping, up 30% to 50% in some areas." In addition to issue advertising, pharmaceutical and cancer-treatment companies are paying for "vignettes" promoting disease awareness or offering health tips. For advertisers, part of the appeal is lower local-TV rates. Last year, the presidential race drove up local rates as candidates spent tens of millions of dollars on ads. This year, there is less competition on the political front, and the recession has caused marketers to slash ad spending across the board.

Ad prices are down 30% from last year in some markets, according to SQAD Inc., a Tarrytown, N.Y., media-research firm. A 30-second TV commercial in Raleigh, N.C., costs about $12.85 per thousand viewers, a 31% decrease from a year earlier. "I think we are getting greater bang for the buck this year," says Ron Pollack, president of consumer-advocacy group Families USA, which supports health-care overhaul and helped revive the Harry and Louise characters. He says the lower rates allow him to repeatedly air each ad, which multiplies its impact. One of the most widely aired ads on the opposing side was created by Americans for Prosperity Foundation, a conservative group. The 60-second spot features a Canadian woman who says a brain tumor would have killed her had she relied on what she describes as Canada's slow-moving government-run health-care system. "Now, Washington wants to bring Canadian- style health care to the U.S.," a voice-over says. The group says it has spent about $5 million on advertising and $1.4 million in the past week on local and national ads.

Some of the spending targets narrower issues. PhRMA, the drug-industry trade group, is running hundreds of 30-second commercials around the country citing the role of biotech companies in trying to cure Alzheimer's and diabetes and creating jobs. Congress is debating legislation that would protect costly name-brand biotech drugs from generic competition for another decade, which the White House wants as part of a health-care overhaul package. The PhRMA ads thank 13 lawmakers for helping brand-name drug manufacturers. The PhRMA campaign has reached more than 24 million people, according to Critical Mention, a TV intelligence firm. It estimated the total cost at less than $500,000. PhRMA has declined to comment on the campaign.

The sudden onslaught of ads has caused ad rates to jump in some markets, such as Washington, D.C. Larry McCarthy, a Republican media strategist working with Americans for Prosperity, says he wanted to put ads on "Meet the Press," the NBC political-talk program, Sunday morning in the Washington market. "The price doubled in a day," he says. Comcast Corp., the largest cable provider in the country, says health-care issues dominate sales in its already robust political-advertising area. Dan Sinagoga, director of political advertising, says the group Conservatives for Patients Rights, which opposes several key White House proposals, has bought time in 21 markets including Albuquerque, Denver and South Bend, Ind. "Instead of just buying ads in Washington hitting Congress on the head, they are microtargeting, telling constituents to call individual members of Congress, which is probably the issue ad wave of the future," adds Mr. Sinagoga.

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