Political advertising to hit $8.3 billion this year
As Borrell Associates outlined in its report four years ago, politics in this country has become an endless campaign, with TV and cable outlets the chief beneficiaries. There are 30,000 elections being held across the U.S. this year, injecting what we they estimate will be $8.3 billion into the advertising ecosystem. The spending runs from $47,000 for the average town council race up to $23 million for a Senate campaign or $27 million for a gubernatorial race. Close to two-thirds of that money will be spent between July 1 and Election Day.
Spending by candidates and campaigns is up. No surprise there. But what’s surprising in the report is that online continues to severely lag in this category. Unlike commercial advertising categories like automotive or health care, which tend to earmark one-third to as much as two-thirds of their ad spending for online media, candidates remain loyal to traditional media. Barely 8% of the $8.3 billion spent this year on political advertising will go to online media. Borrell expects that to explode during the next presidential campaign, to nearly $1 billion. But even at that high-water mark it would be less than 10% of all political advertising.
Today, politicians and political organizations spend $37 per eligible voter to sway opinion via media advertising, up 9% from the last mid-term election year. That will zoom to $51 in 2016, a Presidential election year. That’s 21% more than the last Presidential election year in 2012.
So where does digital media stand in this upward spiral? It certainly plays a role, but not so much on the “advertising” side of the digital equation. Spending on online ads is definitely growing – and poised to explode in two years. But even at a forecast rate of a threefold increase between 2012 and 2016, digital media would still be less than $1 billion, accounting for less than 8% of all political advertising. Most of the activity, it seems, is by digital marketing managers working within the campaigns, managing social media and email communications directly with the electorate.
Every June brings primaries and press coverage. The even-numbered years get the most attention, because that’s when one-third of the U.S. Senate and entire House of Representatives are up for election. They’re the glamorous tip of a political iceberg that extends from national office to town councils, school boards and county sheriffs in the nation’s smallest hamlets.
Between now and November, more than 30,000 electoral contests will be held, though fewer than 600 will receive much attention beyond the towns and counties where they take place.
Participants in these contests will spend almost $8.3 billion on advertising this year in their attempts to grasp the brass ring of political victory – more than $37 for every eligible voter, on average. For some, the day after Election Day will be spent collecting lawn signs, tearing down posters, and thanking helpers. For those in higher profile contests, Nov. 5 will signal the start of fundraising efforts to pay off the debts incurred during the past year’s frenetic efforts.
Of course, not all elections need the same amount of advertising. A local contest for a city council or school board seat can be relatively cheap, averaging less than $50,000, even with those for the biggest cities considered. State assembly seats require more advertising, as much as a campaign for a U.S. House seat used to cost a few decades ago. Political advertising costs tend to ratchet up each four-year cycle, so that every level advances toward what was paid by the next-higher level contests last time around.
Note that these estimates are not per candidate, they are per seat. A state assembly contest may have four or more candidates on the ballot, and even Senate and House runs can have several contenders through the primaries. Statewide offices – governors, attorneys general, lieutenant governors in some cases – can easily command ad expenditures that match those of senators or congressmen these days, once all the dust has settled.
According to the most recent data gathered by opensecrets.org, roughly half of the money needed to support this year’s elections has been collected. It is being spent – or committed – just as fast as it is put in the bank. Campaigns large and small have a similar ad spending “shape.” It is the amounts spent that change. Through the primaries, roughly a third of an average campaign’s ad spending total is exhausted. The rest is left for the final push. More than half of all political ad spending will occur in September and October. It is at this point that help from the national party’s war chest, big individual contributors, and the indirect help from PACs become paramount.
Since its first widespread use in the 1950s, broadcast TV has grown to capture the bulk of U.S. political ad spending. Highly polished TV commercials can make even the driest and stoic candidates look warm and friendly, and even the warmest and friendly look evil and unelectable. And, TV tends to reach the masses more than any other medium. The overwhelming affinity for TV will continue to be the case this year. On the surface, nothing seems to have changed very much. However, some dramatic shifts appear when trends are examined further.
By the 2012 Presidential election, candidates from both parties used keyword buys, sophisticated website management, email marketing, and online display advertising as standard parts of their advertising efforts.
The 2012 cycle also saw the first use of “industrial” marketing methods by online political staffs. Micro-targeting, an adaptation of cookie-following techniques familiar to many advertisers, was successfully tried by both Democrats and Republicans. Online voter targeting using databases from Acxiom and Experian was done as well. Facebook hired away National Republican Senatorial Committee staffer Katie Harbath to invigorate their political offerings. Digital political ad spending grew six-fold from 2008-2012, from $22.2 million to $159.2 million.
Current political ad spending forecasts through 2016 depict a familiar pattern of spending – retreat to lower levels during the “local only” third cycle year in 2015, followed by big increases during the cycle’s final year, the year of the presidential election. Trends established earlier in this analysis continue: large gains for online spending, some gains for cable, below average change for the rest of media.
For the first time since measurements began, broadcast TV will see definite, continuing loss of share – even though spending will increase marginally from 2012 levels. The impact of shifts to cable and online will become apparent. In subsequent national election years, broadcast TV spending looks to continue its decline. The base cause of this reversal of fortune is primarily the changing habits of the American voter. It is no longer a question whether other media choices will eventually surpass broadcast TV for political ad share, it is only a question of when the event will occur.