TV networks see windfall from political ads

The country’s two largest television broadcast companies are often at odds over audience ratings, but they agree that windfall profit is expected this year from election-related ad spending ahead of the May 9 polls.

ABS-CBN Corp. said profit in 2016 would end at P3.2 billion to P3.5 billion, up from P2.54 billion last year and matching a level not seen since 2010, chief financial officer Aldrin Cerrado said during the company’s annual stockholders’ meeting Thursday.

Also Thursday, GMA chair and CEO Felipe Gozon said the network was “hoping” to hit a net income of P3 billion this year, about 50 percent higher than the 2015 level.

Driving gains were political ad placements on television networks, which traditionally surpassed other media platforms by a wide margin in luring advertising money.

This election cycle—featuring a tight race between presidential candidates led by Davao City Mayor Rodrigo Duterte, administration bet Manuel Roxas II and Sen. Grace Poe—was no different, based on figures shared Thursday.

Two other candidates, Vice President Jejomar Binay and Sen. Miriam Defensor Santigao, have been trailing in pre-election surveys.

ABS-CBN president and CEO Carlo L. Katigbak said election-related ad revenue this year was already above the 2010 level of P2.3 billion, when the company posted record profits.

“The minutes are slightly down, but it’s compensated for by the rates. The bottomline is there’s less placements but the cost of placements have gone up,” he said.

ABS-CBN Group CFO Rolando P. Valdueza said political ad placements during the period slipped by “double digits,” offset by a double-digit rate increase from 2010.

For GMA Network, Gozon said political ad revenue this year would hit P1.5 billion, lower than the P2 billion it saw in 2010.

He spoke at the company’s first quarter 2016 briefing, when GMA reported a net income of P1.01 billion, up 148 percent, on total revenue of P3.9 billion, up 30 percent. ABS-CBN has yet to report its first quarter results.

Gozon said that while political ad placements would be lower than in 2010, regular advertisers bucked their tradition of “staying away” and continued spending during the first quarter of this year.

“The reason for that is very simple. There is a lot of spending that trickles down to the people during campaign periods, so people have more money in their pockets. If you have more money, then you can buy more,” Gozon said.

Of its total airtime revenue during the quarter, P640 million or 18 percent, came from political related ads, briefing materials from GMA showed. Recurring or non election related adverting was up 9 percent, it added.