Recent reports suggest U.S. ad spending may drop as much as 13 percent this year. But political advertising is once again bucking the trend. As a category, it’s grown over the past decade, a trend that will continue in 2020 with the presidential and last congressional election before redistricting.
Initial predictions were that 2020 spending would eclipse any of the previous cycles. And even though this year is playing out differently than expected, we still expect 2020 to exceed all previous cycles simply because of the nature of campaigns.
Now, when campaigns release second-quarter finance reports in mid-July, we’ll be better able to see if there’s been a drop in fundraising due to coronavirus outbreaks and the economic downturn.
But if the requests that we’re fielding are any indication, campaigns seem to have adapted quickly. Thanks to the never-ending election cycle, campaigns start fundraising earlier than ever and many already had record-breaking totals.
The presidential battleground runs through some of the most expensive media markets in the country, including Detroit, Miami-Ft. Lauderdale, Minneapolis-St. Paul, and Phoenix. Add to that high-profile competitive races for Senate, House, statewide offices, and ballot measures, we expect record-breaking spending even in smaller markets like Des Moines-Ames, Missoula, and Portland-Auburn (ME).
But larger campaigns aren’t the only races that are increasing spending. Many state legislative campaigns are projecting higher spending than the previous cycle as well. With re-districting on the horizon, control of the district lines for the next decade is on the ballot.
Additionally, Democrats and Republicans increasingly recognize the value of down-ballot constitutional offices like secretary of state and attorney general, in which many candidate and independent expenditure campaigns have already reserved fall advertising.
And in some suburban areas, races that previously received little-or-no attention, are now finding they need to spend more money because of President Trump’s eroding support in those areas.
The decline in retail advertising is good news for candidates whose rates are tied to those of a station’s most favored advertisers. They also have less overall competition than in previous years. In a normal cycle, candidates and issue groups are competing with auto dealers, restaurants, and law firms for ad time.
With so many commercial advertisers cutting or eliminating budgets, broadcast and cable aren’t filling inventory the way they normally do. This leaves more room for federal and local candidates. And rates, at least early on the cycle are slightly lower.
Issue advertisers are not as lucky. The FCC doesn’t regulate how much vendors can charge political issue advertisers, so those rates can be several times higher than candidate rates. Because vendors know issue ads must run by Election Day and lack some of the flexibility, it’s harder to get stations to negotiate.
Issue rates for this fall aren’t significantly different – and in some cases higher – than planning rates we got last winter and spring. This is especially true in markets with more competitive races than in previous cycles as stations try to make up the gap left by commercial advertisers.
In the most competitive markets in the country, there’s a demand for high-visibility, high-quality digital inventory. Limited ad breaks, share of voice limits, and finite takeover placements all contribute to higher demand. Those ad networks and platforms that rely on demand-based pricing will see increases in the most competitive states and districts.
In the primary elections held since April, more of the electorate has voted by mail than in previous cycles. In Minnesota, which has one of the highest voter turnouts and longest early-voting periods in the country, more than 207,000 voters have requested mail-in ballots compared to fewer than 8,000 at the same time in 2018 and under 9,000 in 2016.
We work frequently in Oregon and Washington – two states that conduct their elections entirely by mail. Because of the longer voting period, campaigns must stretch their paid media to reach voters who return their ballots at the beginning of the window and those who wait until the end. This often means longer flights with lower point or spot levels per week, but not less overall spending.
Political buyers sometimes look at Election Day as a “one-day” sale, but this year buyers must conduct extended, sustained, steady campaigns across weeks or even months as people vote from home. We expect that as states finalize their general election voting procedures, more voters will opt to vote early instead of going to potentially risky polling places on Nov. 3.
As commercial advertisers pull back, campaigns will most likely fill in the gap with longer and more expensive political ad campaigns, even in the midst of a pandemic.
Casey Bessette and Lauren Richards are partners specializing in media buying at Sage Media Planning & Placement, Inc.