OTT Inventory Sees Spike, Facebook Less So in Iowa and New Hampshire

History isn’t repeating when it comes to digital advertising inventory ahead of the early presidential votes.

Practitioners were expecting to see spikes in, say, the cost per conversion on Facebook mirroring last presidential cycle. But instead, increases have been mild compared to 2016.

Still, there have been rate jumps in premium and direct-placement inventory as well as OTT just as Democratic voters get ready to cast the first ballots of the White House nominating contest.

With the Iowa caucuses looming, Democratic digital consultant Beth Becker had been expecting to see a replay of the $3-4 cost per conversion on Facebook from 2016.

“I think the highest I saw when I ran my numbers late last week was $1.65,” she said. “It actually surprised me. There are more candidates. We know they’re spending the money.”

In fact, the Democratic contenders who are running campaigns in Iowa and New Hampshire have spent some $48 million on Facebook, according to a tally kept by ACRONYM.

One reason is that despite the significantly larger Democratic field from four years ago, the campaigns aren’t all going after the same universes at the same time.

“I think people are being more strategic in their targeting and the creation of their audiences — that’s resulting in fewer overlapping universes between the campaigns,” she said. “I think that’s actually a good thing in terms of digital strategy across the board. There’s nothing wrong with paying lower costs for stuff, that’s for sure.”

While Google has restricted campaign ad targeting by things like browsing history, Facebook opted not to tighten its targeting options — instead giving users more privacy controls, which practitioners say most voters won’t employ.

Mark Jablonowski Chief Technology Officer at DSPolitical said the upward trend on pricing is also being seen in connected TV (CTV) and over-the-top inventory (OTT), of which streaming television services, video on demand (VOD) services, and free television services are offering campaigns enticing inventory.

“That is one place where we are seeing significant price pressure,” Jablonowski said. “This is the first year we’ve been able to use data targeting capabilities in the CTV, OTT world.”

As a result, campaigns are seeing “astronomical” rates in Iowa and New Hampshire.

There have also been price increases on premium direct placement digital inventory, including on YouTube where campaigns have been able to pre-book spots up to 120 days in advance. Looking ahead in the calendar, South Caroline and Nevada aren’t yet seeing the same demand.

“When it comes to larger voter targeted programmatic ad buys, the squeeze is not there,” Jablonowski said. 

Thought that could easily change, according to Centro’s Grace Briscoe. “In the past, during peak election windows in key geographies, we’ve seen increases of 15-25 percent in rates for biddable media — both programmatic and social. I think there’s every possibility we’ll see more dramatic increases this time around. We’ve got a lot of candidates doing a lot of spending.”

Despite being able to do more TV-style ad reserving on digital, campaigns are instead relying on real-time bidding to keep pace with their rivals, said Briscoe.

“We’re seeing less of the reserved-type buying and more of campaigns counting on being able to bid against their rivals to get the audiences they want in the early primary states,” said Briscoe, a VP who serves as the ad tech company’s political lead. “As they get the funds in, they want to dump that into messaging. And planning ahead is a little more of a challenge.”

The rise in OTT/CTV buying is likely related in part to Google’s ad targeting restrictions that went into effect Jan. 6.

“It’s going to diminish the use of YouTube,” she said. “Campaigns are still using it, but they’re using it less than they could have.”