At a continuing legal education seminar held by the Federal Communications Bar Association a week ago, Bobby Baker, the FCC’s chief of the Office of Political Programming, confirmed an issue that has been confounding broadcasters for many months. In recent years, several organizations, including Google’s dMarc service, have begun to take remnant advertising inventory from broadcasters, and to market that inventory on-line. For this left-over spot time, prices that are charged for such time are often less than a local advertiser would pay for similar time on the same radio station.
Given that we are now in a political window, the issue has been raised as to the impact that the sale of a station’s advertising time through one of these on-line services has on the services lowest unit rate for political candidates. The simple answer given last week was that, if a commercial advertiser can buy a particular spot on a particular station using an on-line service, and that spot carries with it the same rights that a spot purchased directly from the station has (e.g. it runs in the same time period, has the same protections against pre-emption, it carries similar make-good rights), then the spot must be considered in the station’s lowest unit rate analysis for spots of the same class. While not specifically addressed by Bobby at the seminar, it would seem that even if the spot has unique properties from spots sold locally (e.g. high level of preemptibility, no make good or preemption protection, a different rotation), it would form a different class of time that must be offered to the candidate who requests information about all classes and rotations, even if the candidate buys direct without using one of these electronic services. Spots sold through these on-line services would be like spots sold by a station’s rep firm, which similarly must be considered in a lowest unit rate analysis.
However, if the spot is sold as part of a package with other stations, where the advertiser buys on a cost-per-thousand basis or based on some other form of audience delivery, and where the advertiser does not have the ability to buy spots on any single station, then the spot does not impact on the station’s lowest unit rate. This would be an application of the FCC’s policy with respect to unwired networks and other sales of multiple stations, which has held that such sales do not affect lowest unit rates. As other advertising issues arise during this political season, look for advice here.