Corey Elliott: The political landscape has changed, or haven’t you noticed?

 

By Corey Elliott, VP of Research, Borrell 

Regardless of your political leanings, there is one thing everyone can agree on: in the past year, our political landscape has undergone significant changes. This evolution is not just happening on a federal/national level, but is also being felt in town halls and city councils throughout this country. And this change could also reverberate into the offices of over-worked advertising directors at local media companies – if they decide to change too.

Gross generalization to be sure, but many a media company has been lulled into a “wait for it to roll in” mentality when it comes to political ad spending. This sentiment has been exacerbated by programmatic buys in the last few years. And, honestly, this can and will continue to happen, BUT……we see some changes coming.

First, 2018 promises to be one doozy of an election year. Polarizing ideologies have already electrified the field, and the players have already swung into campaign mode. This frenzy will eventually make it to the ad desks of local media companies. But how? And how much? And where is the real opportunity?

The current forecast for political advertising spend in 2018 is $8.5 billion. That includes everything from the $185.3 million spent chasing after seats in the U.S. House of Representatives to the $802 million spent on local ballot issues.

Some states will get more, some states less – mainly depending on what races are being run, how hot the contests are, what controversies make it on to a ballot, and, quite frankly, the worth of individual voters in individual markets. Sad to say, but the right people, in the right place, will garner more money placed in their region to influence them.

Since there is no Presidential election this year, would you like to hazard a guess where the most ad money is generated? I’ll give you a hint – it’s not with one particular contest.  It’s all of them – and then some.

Political Action Committees or PACs (aka independent expenditure committees, aka special interests, aka Super PACs, aka pressure groups, aka lobbyists) will be responsible for over 60% of the political advertising spend in 2018. That is over $5 billion. And the best part is, local media companies do not need to wait until the money falls from the sky.

And as far as the #1 media goes for political, broadcast TV, there is another story brewing. Digital advertising spend is not only mirroring, but also catching up. Traditionally, political ad buyers have been “behind” regular/retail ad buyers, but those days are almost over. These buyers are just as savvy, and understand how important it is to literally get into the hands of an eligible voter by way of a smart phone.

It will undoubtedly be a remarkable year for politics and persuasion advertising.  It’s a test run for what might happen in the 2020 Presidential Election Year, and you can bet there are large investments being made to ensure “the right” outcome.  Here are some other items to consider:

• It’ll be a record year for midterm elections, up 2.5% from 2014 midterm spending.
• Most will come not from the candidates themselves or their sanctioned campaigns, but from localPACs and special interest groups.  org shows that they’re already gearing up massively at the state and local levels.
• TV still holds the largest share at 39.5%, but digital will surpass cable advertising and likely attain a 22.1% share, or $1.8 billion.
• Nearly 2,000 candidates have already filed for 33 open U.S. Senate seats.
• Digital ads are forecast to hit $1.8 billion, starting to rival TV.

Also remember, Political buyers are spooked by what happened in 2016, when ads appeared on websites, in programming, and around content considered unsavory. Spending may not follow the patterns of previous years. Buyers may be far more receptive to a pitch from, say, a reliable, popular local media outlet. They might also be willing to spend a little of their digital dollars on media websites and in their audio streams, shunning programmatic network buys.  But that won’t happen automatically.  Every local media company has got to make the pitch.

These numbers are big. And they will ultimately flow into media outlets. But those media companies that can be pro-active will stand to benefit greatly. Got a digital agency? Great. Help a campaign with its SEO. Got an influential audience? Awesome. Make sure you speak to how often they vote.

2018 will continue to evolve our political landscape. Media companies can evolve along with it.