Making ad revenue great again: Trump's cable habit is sending ad rates skyrocketing

Making ad revenue great again: Trump's cable habit is sending ad rates skyrocketing

President Donald Trump has made no secret of his fascination with cable news programs. When asked on NBC's Meet the Press about who he was consulting for military advice during his presidential campaign, Trump famously told host Chuck Todd, "Well, I watch the shows. I mean, I really see a lot of great — you know, when you watch your show, and all of the other shows and you have the generals, and you have certain people..."

Trump's election, and his access to the entirety of the U.S. intelligence apparatus, does not appear to have dampened his enthusiasm for watching TV. 

After Trump became the talk of the nation in Sweden due to cryptic comments at a campaign-style rally about "last night in Sweden," it turned out that the thing that happened was a segment on a Fox News show. 

Trump is such a reliable consumer of cable news that CNN's Brian Stelter once suggested, likely in jest, that a show be produced that caters to Trump. 

Stelter is not the only one who sees the potential to reach Trump's ear through cable. In fact, a veteran media buyer told Politico that ad rates for shows Trump is known to watch are now going for twice as much as ads sold for prior to Trump's election. 

Ad revenue rising because of Trump's viewing habits

One Washington, D.C., consultant told Politico that ad rates were rising on programs including Morning Joe, The O'Reilly Factor and other prime-time Fox programming. 

Bill O'Reilly's show, a Trump favorite on Fox which the president both watches and has appeared on regularly, averaged 4.1 million viewers during the election cycle. 

Even before the Trump phenomenon, O'Reilly brought in ad revenue of around $180 million in 2015, according to Slate. O'Reilly finished 2016 with a 192-month record as the No. 1 most watched cable news show, with Trump's regular appearances driving ratings. 

The show's most important current viewer is Trump, who repeatedly turns to Twitter to comment on O'Reilly segments. After a segment on violence in Chicago, Trump tweeted a threat to "send in the feds!"

Fox declined to comment when asked by Politico about the impact of Trump's viewership on advertising costs. However, as Daily Show host Trevor Noah pointed out, O'Reilly "gets to be president for an hour every single night.

Fox hosts also know Trump is watching and often take the opportunity to talk directly to him, as John Oliver pointed out in this helpful compilation. 

Advertisers have clearly taken notice and want their chance to tap into the influence of The O'Reilly Factor.

Morning Joe, another Trump favorite, is an MSNBC morning show. An MSNBC source confirmed to Politico that "with strategically placed ad buys in New York and D.C. it’s likely the rates would increase ... [and] we would capitalize on increased interest.”

Major pharmaceutical companies and large financial institutions were among the clients who the Washington, D.C., consultant indicated were interested in reaching Trump through "lobbying" by placing strategic ads on programs that Trump is known to watch. 

Why are companies making ad buys to target Trump?

Advertisers can target select shows, and are willing to pay a premium to do so, because Trump's viewing habits are predictable and because there is ample evidence to suggest Trump will respond to what he sees. 

For example, on Nov. 29, then the president-elect, tweeted about flag burning. "Nobody should be allowed to burn the American flag," he wrote. "If they do, there must be consequences — perhaps loss of citizenship or year in jail!"

The tweet corresponded to a Fox News story around 6:25 a.m. about students at Hampshire College who burned the flag in protest of Trump's presidential victory. 

Trump also tweeted about how he calls his own shots shortly after MSNBC host Joe Scarborough made a skeptical comment on Morning Joe about whether Bannon was "calling the shots" in Trump's White House. 

"I call my own shots, largely based on an accumulation of data, and everyone knows it," Trump tweeted.

If brands can reach Trump through strategic ads, not only will they have his ear, but they also hope Trump will spread their message to his more than 25 million Twitter followers. 

TV news ad rates continue to benefit from the Trump effect

The bump in ad revenue for shows Trump watches is not the first revenue boost he has provided to cable news. During the primaries and general election, Trump was a major draw. CNN normally charges around $5,000 for a prime-time commercial, but advertising spots were reportedly selling for between $40,000 and $100,000 during both party's conventions. 

According to Forbes, ad revenue for cable news was expected to reach $2 billion last year, a 15% increase from 2015. The dramatic rise in revenue was driven by the unprecedented nature of Trump's candidacy, with Trump's favorite channel, Fox News, expected to make record-breaking ad profits of $1.67 billion. 

"It may not be good for America, but it's damn good for CBS," said CBS chairman Les Moonves, according to the Hollywood Reporter. With rising ad rates due to Trump's viewing habits, this remains true for the shows that benefit from being on his must-view list. 

The Trump effect: What happens when the president tweets your brand?

The Washington, D.C., consultant who spoke to Politico indicated some companies buying ads were motivated by sending a positive message to Trump, while others were hoping to trigger a Trump tweet targeting competitors. This is a smart strategy — both positive and negative press from Trump could make a big impact. 

Trump's tweets have moved markets by billions of dollars. When Trump tweeted a criticism of Lockheed Martin's F-35 fighter jet, he sent share prices of the arms manufacturer tumbling — each character of Trump's tweet cost the company about $28 million. A negative tweet from Trump could not only lead to a decline in stock prices but could also impact the brand's standing with Trump's avid supporters. 

Involvement with Trump can both help and hurt companies. Linda Bean, the granddaughter of L.L. Bean, found her company included in the #GrabYourWallet boycott in response to donations to Trump's campaign. 

Then Trump tweeted out his support for L.L. Bean. "We're getting a lot of fan mail," Bean told Politico. "According to my son, who's vice chairman of the board, he says there's been a slight uptick in business actually."

Companies that target Trump could be playing a dangerous game in such a divided country, but it seems catching Trump's ear may be worth taking the risk — and companies are willing to pay for the chance to make their impression on the leader of the free world.