The presidential debate is a gold mine for media companies
With estimates of up to 106 million tuning into Monday night's debate, the first faceoff between Hillary Clinton and Donald Trump may be one of the most watched presidential debates. Thanks to live streaming, it's also going to be the most widely available ever.
ABC (NYSE: DIS), CBS (NYSE: CBS), CNN (NYSE: TWX), C-SPAN, Fox (NASDAQ: FOXA), NBC (NASDAQ: CMCSA) and MSNBC will be broadcasting the debate on TV, while several others have announced plans to stream it online through various social media platforms. Facebook (NASDAQ: FB) and ABC have announced a partnership, Twitter (NYSE: TWTR) will run Bloomberg's feed and YouTube (NASDAQ: GOOGL) said it will be showcasing feeds from Telemundo, PBS and The Washington Post.
"We obviously see great engagement on YouTube, and we use YouTube for some of our live streaming already," said Micah Gelman, director of editorial video for the Post. "It's a natural extension of how we currently do live, but it's also allowing people to find it and discover it, who don't necessarily have a television or a cable subscription."
The large audience is also bringing in higher ad prices for pre- and post-debate coverage, since the 90-minute debate will be ad-free. One media buyer said that while the Republican debate ads started at about $70,000 for a 30-second spot, due to interest in both presidential candidates ads for the first debate will start at $120,000. Another media buying agency said broadcast rates for the night ranged from $170,000 to $250,000, while cable packages — which required purchasing more than one ad — began at $300,000.
Online, Bloomberg and Twitter will be splitting revenue for ads that run during the pre- and post-debate coverage. YouTube will allow its live stream partners to turn on advertising during their coverage as well.
But with so many outlets offering the feed, it may mean the audience is diluted — and the media buyer pointed out that the industry is expecting that 95 percent of debate viewers will watch on TV. Gelman admitted that the Post doesn't expect the debates to be one of its highest traffic drivers ever.
Instead, the Post is looking at its YouTube and Facebook Live live streams as a brand-building opportunity to get younger viewers accustomed to visiting its publication, Gelman said. ABC also sees this as a branding opportunity since Facebook does not allow traditional commercials. Instead of airing its TV feed, ABC will be hosting dedicated online only coverage on Facebook Live.
"Our experience is [that] people kind of gravitate towards the largest screen available," said Gelman. "Something happening at night obviously will attract an enormous number of television viewers, but we are creating the habit for our users that if something happens we will have it live. We wouldn't be a modern newsroom if we didn't."
And it may not be an optimal time to advertise just because there is a large audience. Colleen Leddy, head of communications strategy at advertising agency Droga5, recommends that brands that don't have a political tie or immediate need to launch a product choose a different time to advertise. Prices are artificially high because of demand from political candidates, Leddy said. (Droga 5 is working with Clinton during this political campaign, among other brand clients.)
"There's a lot of desire for that [ad] inventory, so therefore there's less inventory for traditional advertisers," she said.
Leddy likened the situation to wanting to visiting a place like Rio de Janeiro during the Olympics, even though you were not interested in the sporting event. Prices for flights would be much higher.
"Brands need to ask themselves, are people paying attention to us? And is it worth the amount of money we need to spend to get noticed?" Leddy said.
Disclosure: NBCUniversal is the parent company of NBC, Telemundo, MSNBC and CNBC.
More From CNBC
Top News and Analysis
Latest News Video
Personal Finance
