update on the political ad scene - harmelin.com · as twitter, linkedin, and snapchat have banned...
TRANSCRIPT
Update on the Political Ad Scene0 9 . 1 5 . 2 0 2 0 F O R T H E G E N E R A L E L E C T I O N
S E C T I O N
2
01 OVERVIEW
02 SPENDING PROJECTIONS & RACES
03 MITIGATING THE CROWDED AD SPACE
04 CONCLUSION
HA
RM
EL
IN M
ED
IA // U
PD
AT
E O
N T
HE
PO
LIT
ICA
L A
D S
CE
NE
FO
R T
HE
GE
NE
RA
L E
LE
CT
ION
3
O V E R V I EWH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
While COVID-19 has had a tremendously negative impact on the US economy, political ad spending has not seen the same decline. In fact, largely due to the lack of in-person campaigning, spending on political advertising is at an all-time high.
4
O V E R V I EWH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
Consider that the Democratic and Republican conventions were presented virtually, and the three presidential debates and one vice presidential debate are now scheduled as virtual events. Candidates are also holding mostly virtual rallies instead of in-person events. Virtual rallies can add substantial numbers of people’s contact information to candidates’ campaign databases for direct messaging throughout the cycle.
While we normally see most of the general election spending during the political window of September 5th to November 3rd
when presidential and House candidates are guaranteed the Lowest Unit Rate (LUR) on air, campaign ad spending started even earlier.
Another factor that will affect spend timing within the political window is mail-in voting, which will be in play more than ever before, due to the COVID-19 effect on in-person voting.
S E C T I O N
5
01 OVERVIEW
02 SPENDING PROJECTIONS & RACES
03 MITIGATING THE CROWDED AD SPACE
04 CONCLUSION
HA
RM
EL
IN M
ED
IA // U
PD
AT
E O
N T
HE
PO
LIT
ICA
L A
D S
CE
NE
FO
R T
HE
GE
NE
RA
L E
LE
CT
ION
Kantar recently boosted its forecast for this election season to $7 billion for campaigns and PACs on TV and digital media. A key driver for the increase is from Super PACs that can raise unlimited sums of money from corporations, unions, associations, and individuals to advocate for or against a candidate. Unlike traditional PACs, Super PACs are required to report their donors to the FEC. As of early August 2020, nearly 2,000 Super PACs reported total receipts of $1.1 billion. These PACs and issue advertisers do not receive the LUR given to federal candidates. These advertisers often cause preemptions, as they are willing to pay significantly higher rates to guarantee placements in order to air when they want, as stations will bump other lower-paying advertisers. This will lead to higher demand on inventory and can increase rates for non-political advertisers.
6
S P E N D I NG P R O J E CT I O NS & R A C E SH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
Over the past several years, there have been strong increases in ad spending for political campaigns. However, this growth trajectory does show signs of slowing, with the predicted growth for this cycle increasing 14%, versus 21% in 2018. Kantar is expecting 20% of this cycle’s spend to be invested in digital media.
Broadcast TV53%
Cable TV17%
Digital Video 27%
Radio 3%
Topline Spend by Channel Projections
7
The election with the most spending will continue to be the US presidential race, with more than one third of all political dollars. But the House and the Senate are not far behind, with each expected to spend in the $2 billion range, according to Politico.
Fourteen TV markets are expected to have over $100 million in ad spending; Phoenix, Atlanta and Philadelphia are projected at $150 million each. Arizona has a very competitive Senate race with incumbent Republican Martha McSally running against Democrat Mark Kelly (astronaut and husband of former Arizona Congresswoman Gabby Giffords). Both Georgia Senate seats are up for reelection, and there are several congressional races in Pennsylvania and New Jersey. Pennsylvania is also a key battleground state. One of those key races is in New Jersey’s 2nd District. This House seat is currently occupied by Jeff Van Drew who ran as a Democrat but switched to the Republican party last year. His opponent is Amy Kennedy (wife of former Congressman Patrick Kennedy).
Another source, Advertising Analytics, in conjunction with Cross Screen Media, is projecting spend at $6.7 billion, with $4.9 billion on broadcast, cable and radio ads, and $1.8 billion spent on digital video. Much of that digital spend will be on Facebook and Google, which are still considered close to a duopoly in online advertising.
S P E N D I NG P R O J E CT I O NS & R A C E SH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
Source: Advertising Analytics & Cross Screen Media
In addition, California will see high volume due to ballot measures.
8
S P E N D I NG P R O J E CT I O NS & R A C E SH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
“Toss Up” & “Leaning” States with the Most Significant Electoral Votes
Arizona North CarolinaFlorida OhioGeorgia PennsylvaniaMichigan TexasMinnesota Wisconsin
The Most Competitive Senate Battleground States
Arizona IowaColorado MaineGeorgia North Carolina
There are more than a dozen presidential battleground states where Trump and Biden need to focus in order to win 270 electoral votes.
Source: TVB for The Cook Report
9
Political advertising on social media is a hot topic but advertisers may notice a much less significant impact on their campaigns than in years past.
S P E N D I NG P R O J E CT I O NS & R A C E SH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
The focus of the political ad conversation is on Facebook and Instagram, as other major platforms such as Twitter, LinkedIn, and Snapchat have banned all forms of political ads. Looking across all digital media, Facebook owns 59.4% of all online political media spend with Google taking 18.2% and all other channels the remaining 22.4%. Another source, eMarketer, has predicted political ad spend on digital will cross $1 billion in 2020.
After hinting at banning all political ads in the days leading up to the election, Facebook states in their newly-announced policy that they will not accept newpolitical ads during the final week. However, if the ads are placed before the final week, they can still run. Traditionally, this is when many campaigns or PACs will spend their remaining dollars on digital ads.
S E C T I O N
10
01 OVERVIEW
02 SPENDING PROJECTIONS & RACES
03 MITIGATING THE CROWDED AD SPACE
04 CONCLUSION
HA
RM
EL
IN M
ED
IA // U
PD
AT
E O
N T
HE
PO
LIT
ICA
L A
D S
CE
NE
FO
R T
HE
GE
NE
RA
L E
LE
CT
ION
• Markets with “toss up” or heavily leaning campaigns are most vulnerable to pricing increased and inventory demands on broadcast TV. The TVB offers the TVB Guide to 2020 Political Races & DMAs, which provides detailed perspective.
• For early voting, the timelines vary from state to state. Expect TV/cable inventory to be most impacted by the early timelines. State by state in-person (early) voting timing, with COVID-19 voting information, can be found on vote.org and other sources.
• Spot TV CPPs may be increased to help keep orders intact. Expect and plan for preemptions. Prepare a plan for identifying acceptable makegoods and allowing for spot movement outside of the originally intended on-air weeks.
• Daypart mixes should be adjusted to reduce weight in news dayparts, which will be particularly affected. This is especially true for swing states.
• Streaming video (OTT) and online video are good options to support a linear TV campaign. This inventory is less vulnerable to rate increases and preemptions, as most digital vendors are not subject to the LUR rules.
11
M I T I G A T I NG T H E C R O W D E D A D S P A C EH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
General election spending is expected to peak during September and October, leading up to November 3rd.
For advertisers with local advertising campaigns, be aware of
the situation in your markets.
Clients on Facebook can expect less of an impact on CPMs and inventory than in previous years.
12
M I T I G A T I NG T H E C R O W D E D A D S P A C EH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
Many large advertisers have stopped spending on the platform due to updated revenue projections or issues with inventory relating to the fallout from COVID-19. Most of the entertainment, hospitality, and travel advertisers have not spent on the platform since March and other major brands joined the Facebook boycott and paused spend through the summer. In addition, changes in consumer behavior have resulted in more people spending more time on all social platforms – Facebook and Instagram included. The result is more users spending more time on Facebook but fewer advertisers are spending to reach them.
In addition, major events that drive advertising such as the Summer Olympics in Tokyo, music festivals, and sports have been cancelled. The increase in political ad spending in Q2 and Q3 will not overcome the loss of these events. Harmelin clients on Facebook are seeing CPMs down close to 25% year over year from March through August. It’s possible that the cancellation of in-person campaigning will open up additional dollars to be spent on Facebook political ads, but even that should not cause a major impact on campaign performance for most clients.
S E C T I O N
13
01 OVERVIEW
02 SPENDING PROJECTIONS & RACES
03 MITIGATING THE CROWDED AD SPACE
04 CONCLUSION
HA
RM
EL
IN M
ED
IA // U
PD
AT
E O
N T
HE
PO
LIT
ICA
L A
D S
CE
NE
FO
R T
HE
GE
NE
RA
L E
LE
CT
ION
14
C O N C LU S I O NH
AR
ME
LIN
ME
DIA
// UP
DA
TE
ON
TH
E P
OL
ITIC
AL
AD
SC
EN
E F
OR
TH
E G
EN
ER
AL
EL
EC
TIO
N
Harmelin Media’s advice on fall ad campaigns – if you have not done so, forge ahead immediately with your fall buying. Keep realistic expectations and be flexible to pivot to alternate channels, dayparts and weeks as needed. The political window is open, and it is time to jump in!
about us
Harmelin Media specializes in strategic media solutions and has more than 37 years of
experience helping clients navigate a rapidly changing media landscape across digital,
traditional and lifestyle forms. The firm has grown with a diverse client roster including many
Fortune 500 companies across a diverse array of industries and is now one of the largest
independent media service firms in the United States.
Harmelin’s expertise is in managing the massive data sets that our clients and campaigns
generate to develop strategic, channel-agnostic recommendations that generate business
results and positive return on investment. We accomplish this while maintaining a long-term
business focus, providing superior customer service and operating with 100% transparency in
our operations. Our approach has resulted in unprecedented retention rates with both
employees and clients.
Harmelin’s current media billings exceed $800 million across all digital and traditional
channels on a local, national and international basis. We are a Google Premier Partner,
Facebook Marketing Preferred Partner and proud member of the ANA.
For more information, please contact [email protected] or visit www.harmelin.com.