By: David Oxenford, Wilkinson Barker Knauer, LLP
With the national presidential conventions complete, and most of the state primaries for Congressional, state and local offices either behind us or to occur in the next few weeks, the most concentrated period for the purchase of political advertising on broadcast stations is now upon us, to peak in the late October/early November frenzy. While most of the principles governing the FCC rules on political broadcasting are relatively established (and many are summarized in our Political Broadcasting Guide available here), there are always new advertising practices and opportunities that throw some new wrinkles into how those rules are applied. At a number of political advertising seminars that I have conducted this past year and in discussions with broadcasters, one of the new wrinkles this year that has not captured the attention that it deserves is the political broadcasting issues raised by programmatic buying of advertising time.
In the last year or two, programmatic buying has become the buzzword in broadcast advertising circles for both radio and TV. It is intended to make ad buying easier and more akin to the experience that ad buyers have when they place online advertising, where most of it can be done from a computer with a few clicks of a mouse, anywhere at anytime. While programmatic buying is becoming more and more common in broadcast circles, it is difficult to easily say exactly what it is, as what is called “programmatic buying” comes in so many different flavors. Not only does the concept mean different things in different systems, it is also being provided by all sorts of different companies, from rep firms, to broadcast technology companies, to companies that have specialized in specific types of advertising – like remnant ad sales (i.e. sales of unsold advertising inventory that broadcasters may have). And some station owners are signing up with multiple providers – sometimes at the same station.
The computerized sale of remnant advertising – where the providers of the programmatic buying give advertisers the opportunity to buy left-over advertising on multiple stations so as to reach a total audience in the market in which the stations operate – is akin to systems developed years ago, which the FCC had issues with in trying to decide how they affected lowest unit rates (see our article here). These sales of remnant ads tend to raise one set of issues. This kind of advertising – sold in packages, where advertisers are offered delivery of a certain number of advertising impressions in a given market, where that delivery may well come from placement of ads on multiple stations – may be the least problematic for individual stations in terms of how it affects their political broadcasting compliance. Because the spots are usually packaged with multiple co-owned stations to give the advertiser the number of advertising impressions that they seek in a given market, these ads have no impact on the lowest unit rate on any one station (as ads that are sold in a package on multiple stations do not affect the lowest unit rates on the individual station, although such combination packages on multiple stations must be disclosed and made available to candidates by the company making such combination sales). Moreover, as remnant ads can usually run at almost any time in a broadcaster’s schedule (they are not run in fixed programs or at specific times) and are usually very preemptible, the ads are usually in advertising classes not very attractive to candidates, further minimizing their impact on most station’s political broadcasting sales. But sellers of these packages of remnant advertising may themselves be subject to political rules (as the Commission has traditionally applied such rules to “unwired networks”), so the sellers need to be cognizant of their own political broadcasting obligations.
But other forms of programmatic buying can be more significant for political advertising and need to be carefully tracked by broadcasters. Some of the programmatic systems that are available seemingly let advertisers use computerized systems to essentially buy any advertising time that is available in a station’s inventory. Advertisers can in effect have access to a station’s traffic system and schedule their own advertising schedules, and can pick and choose among the rates available to advertisers in a station’s traffic systems. It’s this ability to pick and choose what the advertiser wants that could raise political broadcasting issues – especially in the later weeks of the election season. If the programmatic deals allow discounts off of a station’s rates for specific classes of time, either simply because they are booked through the programmatic system or because of the volume bought by the advertiser, these discounts could affect the lowest unit rates of the spots that are included in the schedule that the advertisers buy. Alternatively, the ability of an advertiser to get access to the station’s ad schedule to schedule their own ads, toward the end of an election season, could affect a station’s ability to squeeze in political ads as necessary to meet reasonable access and equal opportunities rights. And, if political advertisers use the programmatic systems to themselves buy and schedule advertising, all sorts of issues could arise, especially to the extent that such ads are bought with higher protection levels where they preempt political ads, or simply because they have other impacts on political schedules that stations need to be tracking.
The contracts with providers of programmatic advertising systems need to be carefully reviewed to assess their ability to raise issues in a political broadcasting context. If the programmatic network is used by political and issue advertisers, stations need to be sure that they are getting timely notice of the ad buys and all the necessary paperwork, so that a station can meet its political file obligations. Generally, they should also be reviewed so that buys made through the system otherwise comply with all other station legal obligations that, once upon a time in the distant past when broadcasters used printed contracts, would have been expressed in the terms and conditions for sales, which were often printed on the back of the sales contracts (we have written about these issues before, here, in the context of the required FCC advertising non-discrimination certification, which also needs to be worked into the programmatic buying process). We’ve worked with some providers of programmatic systems to help design their systems so that stations that use them can assure that their inventory can be controlled during the election season and we have looked at agreements from providers for broadcast station clients. These are not simple deals that can be entered into without thought. Any broadcaster using any programmatic buying system needs to carefully review the system that they are using and determine if there are any potential political broadcasting issues – and to assure that the contracts with the providers give stations the rights that they need to assure compliance with political broadcasting rules (and other FCC obligations), especially during these last 92 days before the November election.
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
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