DirecTV, Dish Network to vie for political cash with customized ads

Satellite TV giants DirecTV and Dish Network are looking for a landslide this fall — in political dollars.

For the first time, satellite broadcasters will be jockeying with other media outlets for a share of political spending that could top $3 billion this year. They've historically been shut out of the avalanche of campaign cash because their commercials were directed to a national audience, and didn't have the local reach of TV and radio stations.

"Broadcasters have had this market to themselves because they could offer that local reach," said Warren Schlichting, Dish's senior vice president of media sales. "But we think we've built a better mousetrap."

DirecTV and Dish are using digital technology to match voter registration information with subscriber homes, and are now offering political campaigns the ability to send targeted ads to select households. For example, politically conservative satellite customers might see a TV commercial for a Republican candidate, while their liberal neighbor gets an ad for a Democrat.

Until recently, there weren't enough homes that received digital TV transmissions to make customized ads economically feasible on a large scale.

But with more than 55 million homes now equipped with DVRs, pay-TV companies increasingly are experimenting with so-called addressable advertising. Internet giants already use the technology to tailor their advertisements, and cable companies, including Comcast, have been offering political campaigns localized buys. But now it's coming to satellite television.

"This really revolutionizes the way that TV ads can be purchased," said Keith Kazerman, DirecTV's senior vice president of ad sales. "And when ads are more relevant to consumers, they are more likely to pay closer attention to the message."

DirecTV and Dish this year formed a partnership called D2 Media Sales to sell targeted spots to candidates and ballot measure organizers. The partnership represents the nation's "largest household addressable TV advertising platform," the companies said, with more than 20 million homes.

Working with a handful of consulting firms, the two satellite giants now have access to databases containing voter information on 190 million people. That trove of data enables them to create a new sales pitch: transmit ads into the homes of partisan voters, frequent voters and swing voters, in specific states.

D2 Media Sales struck a partnership in June with the Arlington, Va., political firm i360, which focuses on targeting Republican and conservative voters. Then, last week, D2 entered into a similar arrangement with Clarity Campaign Labs and TargetSmart Communications, left-leaning data firms that help campaigns mine Democratic National Committee voter databases.

Politicians across the country have been eager to use data analytics after President Obama's 2012 reelection.

His campaign team applied analytics to hunt for potential voters who were most likely to be in sync with Obama on the issues. They also hired data firms, including the Oregon-based measurement company Rentrak, to provide TV ratings to help decipher what programs these voters might watch.

Rentrak recommended buying time in TV programs that were ignored by other politicians, such as old reruns that ran late at night on the TV Land cable channel. Obama's campaign bought commercial time on niche cable entertainment channels, rather than depend primarily on news programs on Fox News, CNN, MSNBC and local TV stations.

"The reality is that you are going to find the hard-to-reach voters somewhere else," said Chris Wilson, Rentrak's president of national television.

Campaigns no longer want to spend most of their budget on ads to galvanize their base. Loyal supporters already are motivated to show up at the polls and vote for a particular candidate, so the trick increasingly is finding and winning over the "persuadable" voters.

"The Obama campaign was really the first to really execute on that strategy using our data," Wilson said. "And now others are trying to find high concentrations of these persuadable voters and targeting them."

Michael Palmer, president of i360, called the method "focused research."

"Instead of hitting everybody, including the people who won't vote, or won't vote the way we'd like them to, we focus the ads and the dollars on just the voters that candidates want to persuade," Palmer said.

Advances in technology that enable tailored ads coincided with an explosion of campaign cash. Changes in election laws, including the landmark Citizens United decision in 2010, which gave corporations the green light to spend freely, opened the floodgates. TV outlets have been raking in hundreds of millions of dollars more than in years past.

Nearly $6.3 billion was spent on U.S. election campaigns in 2012, which represented a $1-billion increase from 2008, according to the Center for Responsive Politics. Congressional candidates collectively spent nearly $3.7 billion two years ago. Totals include advertising, overhead and other campaign expenditures reported to the Federal Election Commission.

"It's just so much easier to spend money in politics than it was in the past," said Travis Ridout, a Washington State University professor and co-director of the Wesleyan Media Project, which tracks campaign spending.

"There has been enormous growth in outside groups getting involved — and actually influencing the political agenda and the media — in some instances more than the candidates themselves," Ridout said.

Campaign consultants have long mined public information on voters kept by county election supervisors. They used that information to generate mailing lists to flood voters' mailboxes with campaign literature. Tailored TV ads are expected to supplement those direct-mail campaign fliers.

The DirecTV and Dish initiative is offering its service on statewide levels, but in future years could offer politicians more segmented regions, such as individual counties or congressional districts.

Consultants and ad executives say the technology enables campaigns to save money by sending ads to a narrower group of voters.

"This really is just the beginning of what is going to be an increase in data-driven advertising strategies used by campaigns across the country," Palmer said.

Campaigns also are employing analytics to suss out the issues that are important to voters they are trying to persuade — as Obama did in 2012. Young adults might be hit with ads that focus on education or the environment. Older viewers might see messages about a candidate's position on security issues or Social Security.

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