September 25, 2008 in Business

Campaign spending shifts

Local printers, TV stations feeling the heat of competition

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CHRISTOPHER ANDERSON photo

Duane Brown, right, owner of Advantage Printing, checks the results of a campaign sign run Wednesday at his Spokane shop. Bryan Brown operates a screen printing press in the background.
(Full-size photo)

Spokane-area TV stations and sign-printing companies are usually whistling “Happy Days Are Here Again” any time there’s a presidential election along with a rash of local races.

Most times, campaigns will line up to buy TV spots and order thousands of yard signs – and not think twice about the price.

The 2008 general election, at least for those two business groups, isn’t quite so rosy.

TV station managers and printing company officials say 2008’s election will produce decent returns, but nothing like those of 2004.

For local TV stations, the bottom line will be impacted by the scarcity of presidential ads being bought by Democrats or Republicans; both parties regard Washington and Idaho as no-contest states that are not worth spending ad money on.

Another factor that slices into the local TV campaign ad market is the growth of cable TV viewership.

Dana Runnells, a Comcast spokeswoman, said political advertising on Spokane cable TV in August and September was twice what it was in 2004.

Bill Storms, general sales manager for KHQ TV, said the NBC affiliate in Spokane is behind the pace of political ads the station sold during the 2004 campaign.

“It’s all because in 2004, we had presidential campaign money” being spent in Spokane, he said. This year, national campaigns are buying TV spots only in swing states, he said.

Part of the TV advertising shortfall is being offset by the heated gubernatorial campaign between Gov. Chris Gregoire and Republican challenger Dino Rossi, Storms said. As long as that race remains tight, both campaigns will be eager to spend money on TV spots, he said.

Printing companies here are being challenged by out-of-state discount sign companies bidding on statewide and regional political sign contracts.

Duane Brown, president of Advantage Printing, of Spokane, said he’s seeing significant challenges from out-of-state printers.

“I’d say on total volume we’re about the same (as it was four years ago). But our profitability isn’t the same,” Brown said.

Another Spokane printing firm, Instant Sign Factory, has garnered no sign contracts this season because of lower-priced offers by discount printers in the Midwest, company owner Dave Nail said.

Two of those rivals are Gill-Line.com and Stouse Inc., both based in Kansas City, Mo.

Larry Timberlake, vice president of sales for Gill-Line, confirmed the company is grabbing work from Spokane and North Idaho companies.

“The sales of our political campaign products are substantially greater in your area for the 2008 campaign compared to the 2004 campaign,” Timberlake wrote in an e-mail message. The company doesn’t discuss specific contracts or the prices it quotes for those campaigns, he said.

Spokane sign-printing firm Preferred Advertising and Marketing has as many orders for political signs as in 2004, said company president and owner Kay McGlocklin.

While statewide and local candidates may be shifting some spending to online services like e-mail and Web development, McGlocklin said 2008 is still the year of the yard sign.

“Spokane is more of a yard-sign town,” she added.

Instead of the challenges of meeting discounted pricing from out-of-state competitors, she said Preferred is seeing its margins shrink because of increasing costs of supplies for signs.

Election signs only use two colors, typically, but even so the price of ink is following the price rises of all other petroleum products, she said. Ink has risen above $120 a gallon, up from $85 per gallon, McGlocklin said.

Ed Clark, a longtime Spokane advertising agency owner, sees more candidates in Eastern Washington spreading their media budgets to include spending for e-mail and Web site development. But the Spokane region, he said, isn’t rife with companies that can take advantage of the fast-moving Web campaigns that astute candidates are embracing, Clark said.

Robo-calling – the practice of having computers make automated phone calls on behalf of a candidate to targeted voters – is something that area candidates can pay for without having to spend money outside Spokane county.

Among the candidates using robo-calling is Spokane County commission challenger Dr. Kim Thorburn.

Thorburn’s campaign manager, Debra Barnes, said the use of automated phone calls allows Thorburn to make a direct and personal appeal to voters, rather than hope that a TV or radio spot reaches receptive ears.

Thorburn’s campaign has spent about $4,000 on campaign signs but less than $600 on robo-calling, Barnes said.

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