2018 Midterm Political Advertising is Setting Spend Records

Political Advertising

Midterm Elections Are Breaking Ad Spending Records

The upcoming midterm elections are breaking records in political advertising spend, creating chaos for local advertisers. Political ads are bumping TV spots and crowding both digital and out of home spaces, leaving less opportunity and fewer options for marketers. It’s important to be aware of how this hectic season of political advertising is impacting your campaign strategy.

With the midterm elections close, political ad spending is strong. According to Statista, the 2018 midterm advertising spend is predicted to reach $8.93 billion, exceeding past spends of $8.3 billion in 2014 and $7.2 billion in 2010.

For political advertising channels, TV remains the king of spending, though digital is expected to take almost 22% of the spend this year, according to Borrell Associates’ 2018 Political Advertising Outlook. With 39% of the spend going to broadcast TV and 12% to cable TV, there is a limited amount of air time for other advertisers. As advertisers try to re-allocate their broadcast budgets and objectives to other media, those channels are becoming crowded as well.

Swing States Are Being Bombarded with Political Ads

Swing states are receiving the greatest onslaught of political ads. Minnesota, Arizona, Missouri, and Ohio are a few highly contested swing states expected to break political ad spending records. According to WCCO in Minneapolis, Minnesota candidates and political groups are expected to spend more dollars this year than any year previously. According to USA Today, $5 million of air time has already been reserved in Arizona by Defend Arizona and The National Republican Senatorial Committee. In St. Louis, Mo., $22 million was booked for quarter three, a large spike compared to the $17 million spent during the same period in the 2016 election. Another $16 million has been booked for quarter four. This influx of ad dollars and buying up spots leaves markets saturated, causing commercial advertisers to get bumped and look elsewhere for their advertising needs.

 I’ve Got Media Booked…Why is it Being Bumped?

When candidates want to advertise with a TV station, the station is required to give them the guaranteed lowest rate for spots. In addition to candidates’ campaign budgets, political action committees (PACs) are also pumping dollars into the market. PACs are political groups that raise funds to help a particular candidate get elected. These committees pay whatever it takes to get on air and tend to outbid many non-political advertisers, resulting in the disruption of clients’ ad schedules with spots that don’t air as planned. It follows that rates have climbed dramatically and it isn’t uncommon to see cost-per-points greater than three times the average in some dayparts/programs. Primetime and News programming/channels are generally seeing the most impact as they offer the greatest reach potential.

In return for spots that get bumped, stations usually offer make-goods. Make-goods are the media contracts contingency plan, they are credits offered to the advertiser due to under delivery or any mistakes made. However, due to the higher than anticipated political activity this year, available and equitable make-goods are limited. Some stations are only offering a credit during this election period due to their inability to secure an alternative placement.

After an election, rates typically come back down, but that likely won’t be the case this year. Due to the make-goods and advertisers holding off on their buys until the 4th quarter, demand will continue to be high, and so will the rates.

The Ripple Effect of the Political Ad Season

Due to the chaotic landscape of buying media, many advertisers are delaying their TV campaigns until after the political season, creating another potential problem. Not only are make-goods taking up spots post-election, but also local advertisers are buying a significant amount of 4th quarter inventory to get back on-air. Non-TV vehicles are also feeling the impact of the political season. Advertisers who have foregone TV have looked to reallocate dollars to out-of-home, radio, etc., only to find these solutions also affected by the crowded political advertising market. Many have limited inventory or are sold-out.

Why You Need to Know

This political season’s ad spending has rocked many markets. The unpredicted massive spending has created a ripple effect that will be felt for months after the elections have wrapped. It is important for advertisers to be aware of the effects of this influx in order to be successful in this time. Here are some tips for getting through this chaotic period:

  • Adjust timing and channels if possible – be mindful of the market you’re in, and if TV advertising at this time isn’t necessary, wait until after elections wrap. In the meantime, try looking into other channels or opportunities for advertising outside of television.
  • Think about other ways to connect with your audience – focus specifically on content creation. Generate original, strategic content on channels like social media to distribute valuable information and both attract / retain an audience.
  • Be prepared that sometimes there aren’t great solutions – because of the ripple affect discussed earlier, media buying in this market is difficult and solutions may not be apparent or possible. Be patient, and if all else fails, spend time making a plan to come out of this season swinging.

 

Citations: Paula Kyllo, Media Buyer

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