Political ad spending is projected to grow 8.2 percent for 2020.
That estimate by GroupM, a research firm under the WPP umbrella, covers core TV, radio, digital, newspapers, magazines and out-of-home but excludes categories like direct mail. It’s based on economic forecasts that peg nominal GDP growth at plus 4.4 percent in 2019 and 4 percent in 2020. Those increases are both slower than 2018, which saw a 5.2 percent increase.
“Consequently, for our 2020 advertising forecasts, we anticipate further deceleration, meaning underlying growth in advertising of +4.0% for 2020, or +4.8%, excluding directories and direct mail,” GroupM’s forecasters wrote in the U.S. Media Forecast Report. “It seems unlikely that political advertising won’t be bigger in 2020 vs. 2018, and so with an estimate of $10bn in our model for the present time, we forecast +8.2% headline growth for 2020.”
In fact, the $10 billion estimate isn’t significantly larger than what was outlaid last presidential cycle, which saw $9.8 billion in total political ad spending.
Meanwhile, political ad spending in 2018 was $9 billion. Overall in 2018, the ad industry grew by 9.5 percent, with almost 4 points of that coming from political spending, according to GroupM. Digital was the category that saw the largest growth.
Digital advertising directed to “pure-play digital media owners on mobile or desktop computers” grew around 23 percent in 2018. Political accounted for $2 billion in digital ad spending in 2018, roughly 2 percent of the medium’s total. The growth of digital “should decelerate” according to GroupM.
Ultimately, political ad spending is causing an “extreme variation in advertising growth” year to year.
“We forecast normalized +17% growth [in digital] in 2019 and +15% in 2020,” the report states. But political ad spending will add another point to digital’s growth in 2020.
Political ad spending was also the only reason there was growth in the local TV category last year. Political ad spending “allowed the entire medium to grow by 6.0 percent in 2018,” the report states.
But that growth will be followed by a 5.4-percent decline in 2019, and subsequently followed by a 3.6-percent gain in 2020. “If we exclude political advertising and what it means for local TV, national TV generally will hold up better than local TV and should outperform, as should the digital inventory these media owners offer,” the report states.
Radio, meanwhile, will see a decline next year falling 4.8 percent when political and consumer spending are tallied together. Outdoor advertising is also falling when political spending is factored in: it’ll see a 3.2 percent drop this year. In 2020, the group forecasts radio will fall by 0.1 percent when political is factored in, while outdoor should grow by 8.1 percent when political is included.