In the final weeks of 2018, digital practitioners are fighting for their share of budget from campaigns across the country flush with cash. But the early part of 2019 will mean a new battle—one that may be just as important for their bottom lines.
Recently-enacted laws on digital ad disclosure in places like Maryland and Washington state have caused considerable compliance headaches for digital shops and campaigns this year, driving up legal costs.
In 2019, as many as 10 additional states could take action. New legislative sessions begin in January and the expectation is that several states will move quickly in the new year.
“We’re now in a worse case scenario,” Jordan Lieberman, a VP at a4 Media, said during a panel discussion last week at the ADWKDC 2018 Conference. “States are moving on their own because they have pressure to … these laws at the state level are being interpreted by recent law graduates, [and that’s] determining how millions of dollars are being spent hour by hour, all within a few weeks of Election Day.”
Aside from the tactical adjustments practitioners need to make as a result of the new landscape (Lieberman noted a shift “away from Facebook as much as possible”), shops are also dealing with sharp increases in compliance costs and confusion in the ad approval process.
“A lot of clients are at relatively lean creative agencies and they don’t have unlimited creative hours to spend,” noted Jesse Contario, director of political and advocacy at MiQ.
A pattern Contario has seen repeatedly this cycle: A piece of creative from a client that goes through several rounds with the client’s attorney is finally approved and sent, only to then be rejected by the exchange thanks to confusion over compliance. “It just creates another delay and another barrier to entry,” he said.
Adav Noti, senior director at the Campaign Legal Center, is working with an increasing number of industry professionals to ensure lawmakers in states across the country get industry input. His goal: demonstrate the damage that can be done by ambiguity and offer a reasonable alternative.
“When I hear that compliance costs are out of control, and even Facebook has said publicly they’re currently losing money on every political ad, that incentivizes lawmakers to come up with better ways to do this,” said Noti. “Just saying, ‘this doesn’t work, we don’t like it,’ isn’t a sufficient response. We need to say, ‘this doesn’t work, and here’s a better way.’”
One bit of progress over the past few months, said Noti, is the ad industry now seeing the virtue of engaging in the process as more and more states contemplate legislative action similar to what Maryland and Washington state already have in place. Educating state lawmakers on how the digital media landscape, particularly the programmatic buying process, works is key to the industry’s efforts on this front.
The current consensus from industry practitioners is that they must be ready to battle state lawmakers on this, state by state since it’s likely their only choice. A bipartisan effort at the federal level would head off what’s happening at the state level, and could very well offer a better outcome for digital advertisers and platforms, but there’s little to no expectation that Congress will act.
“The goal of these regulations is not to put anybody out of business and not to stop anybody from engaging in digital political advertising,” said Noti. “It’s to make sure voters get the info they’re entitled to and they need to make decisions. So when you hear that people are losing money on political ads, that’s a problem and needs to get fixed. How exactly to fix that is tricky.”