What Rush Limbaugh Is Not Telling You About His Advertiser Losses

    March 8, 2012
    Mike Tuttle

The firestorm over Rush Limbaugh’s “slut” remarks aimed at Sandra Fluke has not died down. Daily tallies of fleeing advertisers are being kept. Yesterday, as Limbaugh’s program was just getting started, he took a few minutes to explain to his listener base what was going on with the much-ballyhooed exodus of advertisers from his program.

Sponsors on this program are both local and national. We deal with the national sponsors on this program. We have 600-plus stations. They sell their own commercials. We don’t have anything to do with those sponsors. We don’t get paid by those sponsors. We have no idea who those sponsors are.

Let’s make up a company, ABC Widget Company. And let’s say that ABC Widget Company says, “We are no longer going to appear on the Rush Limbaugh Show.” Well, ABC Widget Company isn’t on the Rush Limbaugh Show. What happens is, advertising agencies order advertising buys on a series of local stations from market to market to market. A controversy like this erupts. They put out a notice to the stations, “By the way, for the time being we don’t want our commercials run when Limbaugh is on.” But they are not canceling their advertising on the station. They’re just saying they don’t want it running on my program during the local affiliate’s commercial time, not ours.

We have not lost 28 national sponsors. There are not 28 advertisers who were paying us who aren’t anymore. They are local commercial buys. Many of them may not even be running in my show to begin with. The advertisers are just saying, “If they are, pull ’em. We don’t want ’em in there for now,” but they’re staying on the local stations. These advertisers are not abandoning EIB affiliates.

Nobody is losing money here, including us, in all this. And that is key for you to understand. They are not canceling the business on our stations. They’re just saying they don’t want their spots to appear in my show. We don’t get any revenue from ’em anyway.

Much of what Rush said is completely accurate. He also claimed that two unnamed national-level advertisers that had bailed were asking to come back, one of them “practically begging”. Since he won’t name them, that is, of course, unverifiable. But on the whole, he correctly explained the difference between national advertisers versus regional and local ad buys.

So, where are these numbers coming from about 28 sponsors gone, or 32 sponsors gone? Do those numbers matter at all? Or, as Limbaugh said, are they “like losing a couple of french fries in the container when it’s delivered to you at the drive-thru”?

I used to be an “on-air radio personality”. Despite the cultural icons we like to revere in the DJ world, the job is not glamorous, does not pay well, and you end up seeing a lot of sausage-making in the radio world. Stick with me here while we look at the business that Limbaugh has to deal with. This is in no way about the politics or content of Limbaugh’s statements. Let’s just look at the numbers.

Basically, here’s what’s happening. Someone who objects to Rush Limbaugh’s comments decides to do something. So, they listen to his program one day and jot down all the companies that have commercials running during the program. Then, they send emails, make blog posts, start Facebook discussions, etc. about the businesses on that list. But, those businesses actually fall into three distinct categories.

Many of those commercials are for local businesses. These were sold by the individual radio stations (or station groups) themselves. Many advertisers get a spread of commercials, a package, that airs at different times of the day. Depending on the demographic that business wants to reach, they may request that their commercials mostly air at certain times of the day – morning drive, for example, or during Limbaugh’s program. Advertisers want the most bang for their buck. They want to know that their commercials are airing when the greatest number of their potential customers are listening. But, most radio stations will do some spread of commercial time throughout the day, even if there is a focus on certain time slots. An example of a local commercial is a bank, tire store, local restaurant, etc. Anything that is unique to your town or city.

Next are the regional commercials. These are for larger companies, particularly national names. Their advertising purchases are much like the local ones, just on a larger scale. Unlike the local ones, the official representatives of those companies do not know much about the details of where and when their ads are being aired. They hire an ad agency to oversee that. If the results are coming in, they don’t micromanage. They may not be aware that their commercials, and thus their name and reputation, are being put in the Limbaugh time slots. Examples of regional advertisers might include a grocery chain that is unique to the South, candidates in electoral races, credit card companies, a mattress company, Netflix, or Geico.

Then there are the companies that advertise directly with Limbaugh as official show sponsors. These people want to be associated with the Limbaugh brand. They have made a calculated decision that their customers are Limbaugh’s listeners. It may be difficult to tell who they are, as opposed to the local and regional buys. One of the easiest ways to tell is by whether or not Limbaugh himself does the voiceover for those commercials. It is not always the case, but it’s a surefire way to pin down some of the companies. But, the simplest way, though not easy, is to determine which commercials are airing in every market. Local commercials are not played outside the listening area of a given station. Regionals will vary from region to region, even if bought by national names. But, full-fledged Limbaugh show backers will be on in every single market. They come in to each station on the satellite feed with Limbaugh’s show. Once in a while, you will hear a glitch where a commercial starts, then the audio cuts to something more local. That was likely a national ad. Limbaugh does not name these, or even tell how many there are, but they are logically far fewer than the regional or local advertisers. A good example of a national sponsor is LifeLock. We know this because they have spoken up about their sponsorships themselves.

Now it’s time to let you in on a dirty little secret about radio that you find out the first day on the job. Radio stations do not exist to educate or even to entertain you. They do not exist to play new, exciting music. They do not exist to support a particular political ideology or add to any sort of cultural conversation. They exist for one reason: to sell commercials. You can screw up many other things when working as a DJ. You can talk way more than playing music. You can play long blocks of music with almost no banter. You can interrupt and talk over songs. But, never, never miss the commercials. If they could get away with just selling and playing commercials 24 hours a day, they would do it. But, no one wants to listen to sales pitches all day. They want to be entertained in some way. So, stations research and decide what kind of entertainment/programming would best attract people in their area to their radio frequency instead of the competitor’s. If the answer is “talk radio”, they do that. If the answer is “country music”, they do that. If that answer changes, they change the programming. It’s all about selling and playing commercials. Understanding that helps you to see why the loss of advertisers at any level is important, despite Limbaugh’s cavalier statements to the contrary. It helps you to understand why all those local and regional advertisers that he seems to not care about are actually far more important even than his national-level advertisers.

There are tons of companies out there who would fall all over themselves to give Rush Limbaugh their money to advertise on his program at the national level, even if he were the most reviled man on the radio. The level of “class” in those advertisers might drop, but opportunists will attach to a scandal in a heartbeat. The trouble is, the vast majority of hometown and regional advertisers won’t. And, boycotts and protests are most effective at the local and regional level.

If a person who heard what Limbaugh said about Sandra Fluke got an emailed list of local advertisers whose commercials aired during the Limbaugh show, that person can pick up the phone and call each local or regional business on that list. They can tell them, “I will not be eating at your restaurant for as long as you advertise with that man. When you stop, I will come back. And, by the way, I am tweeting, emailing, and Facebook messaging every person I know to tell them the same thing. We’ll be listening tomorrow to see if you are still supporting him.”

Limbaugh may not care about that, but the restaurant owner sure does, even if he likes Limbaugh. If even a few people make that intention known, that owner will call the radio station and demand that his ads be pulled out of the Limbaugh show and spread elsewhere. He may even post a sign on his door expressing his support for Limbaugh, but he will eventually move his ads. In order to not lose that ad business, the station will quickly comply. Eventually, if enough advertisers bail on the program, the program gets replaced. No more Limbaugh in that town.

Limbaugh himself said it yesterday, “They’re just saying they don’t want their spots to appear in my show.” Exactly.

Limbaugh’s website says he has over 600 stations in his stable. Calls from individuals, especially people not even in the listening area, will have little effect on the decisions a station makes. But calls from the advertisers are treated like messages from God. Limbaugh may think say that those advertisers are like a few french fries. But, the local stations do not. There are people at those stations whose job it is to beat the pavement and sell ads. They work on commission. They build relationships with those advertisers. It is in their best interests to keep those advertisers informed about where their money is best spent. If there is a huge stench around a program, local and regional advertisers will abandon it. Stations will then eventually drop it, not on principle, but out of economic necessity. And thus, the listener base dwindles. They simply won’t have it to listen to unless they subscribe online. Then, the chain effect begins. The cost of regional ads drops due to a smaller listener base. So, ad sales people have to sell more commercials to recover the lost revenue. No one wants to support a sinkhole. Eventually, the show folds.

Limbaugh can put on a brave face and act like those national level advertisers are all he cares about. But, that’s disingenuous. Even if he never lost a single one, the local and regional markets can dry up around him. He will be a tree falling in a forest.

Yesterday, Bill Maher, of all people, tweeted his disappointment with what he called “intimidation by sponsor pullout” from Limbaugh’s show. Bill Maher’s stance on unfettered capitalism is long-established. Maybe his unfamiliarity with it is causing him to miss this: sponsor pullout is one of the edges of the capitalism sword. It is the dollar vote. People buy the things they support. They stop buying the things they don’t. It’s the free market at work.

Limbaugh’s show may well weather out this storm. He may still be here having the last laugh ten years from now. But, make no mistake, he knows that those advertisers trickling away in Small Town, USA matter. He may not tell you that, in fact he may tell you the opposite. But, that doesn’t make it so.

[Update: According to the Media Matters blog, a study of Limbaugh’s program as it aired yesterday (March 7) on WABC, the network’s flagship station, revealed that over half his commercial spots on that station had been pulled and replaced with free public service announcements to fill the time.]


Mike Tuttle
Writer. Google+ Writer for WebProNews.