Several clients have asked us recently about advertising during election season and whether they should back off due to rising costs and low inventory, or available ad spots. It is true that political campaigns gobble up advertising as the election nears. And every year, the campaign cycle seems to start earlier.
We don’t recommend that brands completely stop advertising this September through November, but we acknowledge they do face a challenge and can suggest some solutions.
It seems that every election cycle sets a new record for ad spend and 2020 is no different. Politico recently quoted a couple of studies that estimated that political media buys could total $6.7 billion this election.
And remember, there’s more at stake than just the presidential election. Other races include congressional seats, state and local elections, as well as ballot measures. Ad spend comes directly from those campaigns, as well as political action committees, which are not subject to the same limitations directly applied to candidates.
As of July 20, NPR reported that Biden had raised $633 million and Trump had raised $1.08 billion.
That’s a lot of money to dump on advertisers in mostly three months, and it will definitely affect inventory, crowding out brands seeking to reach customers.
This problem is partially balanced this year by an estimated 13 percent drop in ad spending by brands, due in part to the economic downturn caused by COVID-19, according to research by Group M. Even so, the election will definitely put the squeeze on available inventory and cause an uptick in pricing.
Television ads dominate campaigns and that is the area that will be most impacted, as inventory shrinks and prices go up.
For example, nonpolitical advertisers saw their spot TV shares in local markets in Florida, Indiana, Iowa, Missouri, North Carolina and Pennsylvania decrease from 77 percent to 51 percent at the beginning of the 2016 election cycle, according to a study by Kantar that was reported by Adweek.
All forms of advertising will be displaced to some degree and can expect to see higher pricing.
Increasingly, social media is a favorite with campaign strategists and NBC reported that for the first time, spending on digital platforms for election campaigns this cycle will top $1 billion. Facebook accounts for about 59 percent, or $797 million, of the money spent on digital political ads, NBC quoted eMarketer as saying.
What should brands do given this situation? As I said earlier, at C+S we do not recommend that our clients stop advertising entirely. Instead, a strategy should be planned well in advance that takes into account the squeeze.
If you believe it is important to maintain a presence on popular media, such as television, plan budgets accordingly and set expectations regarding reduced available inventory.
We also recommend reassessing advertising strategies and consider shifting ad spend to other media.
Election season is actually a great time to explore new advertising platforms and innovative ad formats. For example, this is a good opportunity to experiment with upping your programmatic digital effort.
Programmatic reaches a vast array of publishers, and when combined with the ability to precisely segment audiences, it can help overcome the drop in impressions on TV, social and other media.
Programmatic is powerful because the technology can find your ideal customers online and serve them ads on publishers that might not be feeling the crunch from political campaigns. For example, programmatic can bypass popular sites like CNN, yet still get meaningful impressions and click-throughs on sites that are narrowly focused on your customers. The outcome is excellent results at a lower price.
If you’re new to digital advertising, this will require a testing phase as your campaign zeroes in on the best publishers and the best advertising strategies for reaching customers.
But once it’s dialed in, digital advertising is a great way to maintain brand awareness and drive conversions as political campaigns price out other media.