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Industry Focus: Where the Ad Dollars Are

In a year without guaranteed advertising dollars from the Olympics or political elections many stations are finding their revenue stream softer than previous years. As fourth quarter approaches stations are still looking for new ways to bring in additional revenue. Here are three things that are worth looking into that could generate significant new revenue for your station.

TV – Health insurance puts millions up for grabs

Starting in October, health insurance companies will start marketing to the 30 million uninsured Americans who will need health insurance by the end of 2013. According to the Wall Street Journal and TV NewCheck, insurance companies stand to make as much as $100 billion in new revenue in 2014.

The assumption is that 1% of the $100 billion in new revenue will be put towards advertising. That means $1 billion will be spent on advertising nationally and, more importantly, as much as 70% or $700 million will be spent locally! Regional insurance companies currently account for about 25% of health insurance ad spending – natural to assume they will spend locally. Larger national insurance companies will likely buy local advertising because of plans to market regionally.

Most news teams are gearing up with stories about the Affordable Care Act and the impact it will have on local health care and the community. Now is the time for the sales team to identify the potential insurance advertisers in the market and make sure your station gets a piece of the health insurance ad spend.

Sponsors – In-content sponsors appeals to new advertisers

Another way stations can generate incremental new revenue is through sponsorships. In-content sponsorship appeals to advertisers because their logo and company name is associated with coveted locations in the newscast. Sponsors become tied to a certain segment and avoid the dreaded zipping and zapping that can occur during a standard :15 or :30 sec spot.

The main station benefit is that sponsorships open up additional advertising inventory that can be sold to new advertisers. One way many stations generate sponsor revenue is by implementing a weather camera network and integrating sponsorships into the new weather content. Traffic and weather segments, two of the highest watched segments in local broadcast, provide a strong opportunity for local sponsorships and forecast and traffic conditions are not affected by their relationship to the sponsor.

Digital – Auto focuses on digital

According to the latest Automotive Advertising Outlook report from Borrell Associates, dealers are forecasted to spend $32.8 billion on advertising this year, a 2% increase over last year. The report shows that for the first time, new and used-car dealers will spend more on online media than on all other media combined — including TV. The efficiency of digital media has compressed the buying cycle from 6 months to 3 months and online spending is trending 18.7% higher for 2013.

Local television stations are in the perfect place to capitalize on this trend. Sales teams can show clients how multiple platform advertising can be used to meet their sales goals. The results for advertisers, and particularly auto dealers, can be extremely powerful when digital and television are combined.

Each community is different and presents unique challenges and opportunities for revenue generation. Only you can determine if all or any of these tactics makes sense for your station. With new inventory possible in sponsorships and the potential advertising dollars up for grabs in the healthcare and auto industries, taking the time to explore these options could prove to be highly lucrative.