With the observance of the Presidents’ Day holiday this week, we examine the evolution of political advertising, what we will see in 2020 and how it affects advertisers. Political advertising spend is projected to be at an all-time high ($10 billion total, $6 billion for federal elections) during this current election cycle and we can expect one certainty. Chaos.
Reading time: 6 min 9 sec
The Incumbent: Television
During his 1948 re-election campaign, Harry Truman traveled over 31,000 miles by train to shake over half a million hands, discuss his policies and attempt to convince voters he should be re-elected. It worked. He defeated Thomas Dewey in what is considered to be one of the greatest upsets in presidential election history.
Just four years later, Dwight Eisenhower reached more people in one day of work, essentially eliminating Truman’s “whistle stop” strategy. Eisenhower traveled to NYC and filmed 25-30 spots in one day at Radio City Music Hall, airing them on television leading up to the ’52 election. The strategy was simple. Grab everyday people off the street, have them ask Ike questions, film his responses, and splice them into :30-:60 second ads. The “Eisenhower Across America” campaign was noted as one of the main factors for him winning the election and changed the political landscape permanently.
Television (both broadcast and cable) has continued and will continue to be an important medium for campaigns on local, state and national levels. In the 1964 presidential election, Lyndon Johnson completely changed the political advertising landscape, airing the first ever attack ad against a political opponent, Barry Goldwater (although Johnson never mentioned him by name in the ad), in his infamous “Daisy” TV spot. If you ever wondered who began the trend of negative political campaigns, look no further than America’s 36th president.
What about today? If you’ve watched any of this past season’s NFL Playoffs, local news or primetime TV the last three months, you have probably seen numerous ads for Democratic candidates such as Tom Steyer and Mike Bloomberg, at least we have in Minnesota. Over 73,000 TV political ads aired the first week of February 2020 alone. And it’s not going to stop anytime soon. In fact, it’s going to increase significantly. We can expect to see 8 million broadcast airings (all levels of elections) of political ads this year. And if you live in key states such as Pennsylvania, Michigan, Florida or Wisconsin, prepare yourselves to be saturated heavily leading up to November.
TV still is a majority of political ad spend, and it makes sense because:
- It has emotional persuasiveness
- Historically, the audience who is a heavy consumer of TV is more likely to vote
- Fear of not having strong presence on TV could cost a candidate a close election
- Data and analytics have evolved where campaigns can pinpoint audiences more accurately
- i.e. Independents, undecided voters, etc.
So do politicians spend all of their money on TV? Not exactly.
The Challenger: Digital
It’s not a shocking statement to say that both the media and political ecosystems have changed dramatically over the past 10-15 years. Digital has been a key component in elections since 1996 as it was the first election where we saw presidential candidates have their own websites. 2008 was considered the first “digital election” where fundraising, organizing and networking was primarily done online. It was also the first year both candidates had Facebook pages. In 2012, about 5% of ad spend was dedicated toward digital placements. From the projections below, campaigns will quadruple their media allocations on digital, spending as much as they do on cable TV for the first time ever in an election year.
Advantages of digital advertising (display, video, social, search, etc.) for campaigns are crucial and include being able to reach the all important “cord cutters” and other key demographics such as the young voter. But now campaigns are able to target geographically very specifically that could help sway electoral votes in their favor. When advertising digitally, the term “swing state” is obsolete as now you can target “swing districts”, “swing cities” or even “swing neighborhoods” via digital.
The majority of the digital spend will be through video. Digital video/OTT companies are going to see significant increases in political spend during this cycle. There may be some inventory issues for other non-political advertisers but they do not have to worry about being bumped for political advertising like they would for broadcast media. Continue reading for more on this.
The Dark Horse: Earned Media
There seems to be an almost infinite number of ways to consume news stories as new technologies and platforms emerge and evolve. In 2016, nobody took more advantage of this than Donald Trump. Trump’s opponent, Hillary Clinton, nearly outspent the current president by a 2-to-1 margin in political advertising during the election. But if you watched any political coverage that year, Trump ruled the headlines with his extreme comments via speeches and his Twitter account. Depending on the measurement, it’s estimated that Trump received anywhere between $2 billion to $5 billion worth of earned media, which is the value of unpaid media coverage he received in newspapers, magazines, television, social media, etc. That’s more than double the earned media Clinton gained in the same timeframe.
Don’t expect this year to be any different. With the political spending at an all-time high and the fervor this election is generating, we can expect something very similar, whether you are a fan or not. The question is how will candidates and media outlets adjust, if at all?
The Great Debate: Advertising During an Election Year
One of our most important duties as an advertising agency, in particular, media department is to educate our clients on the media landscape. In theory, our philosophy is quite simple when it comes to political advertising. If you are passionate about running TV ads during an important political cycle like this, you can, but we are going to talk through all of the important factors associated with this decision.
From the eMarketer table above, 80% of political spend is on broadcast TV/cable TV/radio. How does this affect advertisers? The short answer is “significantly”. Mainly because of three simple letters. F-C-C. Below are two key rules regarding political advertising on broadcast media via the FCC.
- Reasonable Access. The Federal Communications Commission (FCC) requires commercial broadcast stations (TV + radio) provide “reasonable access” to candidates for federal elective office. This access allows candidates to purchase advertising time during all dayparts (i.e. morning, daytime, prime, news, etc.). This does not extend to state and local candidates but stations use discretion whether to accept or refuse these requests. From our experience, most stations typically do.
- Lowest Unit Charge. FCC’s rules require that during the 45-days preceding a primary or primary runoff election and during the 60-days preceding a general or special election, stations cannot charge legally qualified candidates or their authorized organizations more than the lowest unit charge for the same class, same amount of time, and same daypart as they charge their most favored commercial customers. Therefore, during these narrow windows, candidates are entitled to the benefit of all volume discounts even if they purchase a single advertisement. At all other times during political campaigns (i.e., outside of the windows), stations can charge candidates no more than they charge commercial advertisers for comparable use of their facilities.
So what do these two bulletpoints above possibly mean for non-political advertisers? It means that clients who lock in their entire broadcast media plan at the beginning of the year run the risk of getting their spots bumped during potential key political window timeframes. This also means the discounted/bonus spots we typically secure for our clients in non-political years are not provided or provided at a much lesser volume. A broadcast plan a marketer ran in 2019 will typically have more value than that same plan would in 2020 (these FCC rules mostly affect TV but radio also falls under these guidelines).
Let’s also take into consideration that the Summer Olympics are also this year. This is where, for the most part, large national advertisers take up the remainder of the inventory not awarded to political ads. The cost for this is substantial, leaving very little, premium-priced inventory for smaller advertisers during this timeframe.
Digital advertising does not fall under these guidelines yet. The rules have not caught up with the technologies even though the spend in this category is rapidly increasing.
The Results Are Not In
In what is to be a historic election year for our country, it’s also an important one in the advertising industry. How will TV impact this year’s election? Will the media adjust their coverage of the candidates after their learnings four years ago? What creative ways will candidates reach their target audiences digitally?
But also, how will non-political advertisers adjust their media plans to compete with the political chaos? How can brands use the political season to their advantage? How fast can brands create content to react to election outcomes? Similar to the election, it may be uncertain now but it will make for an interesting lead-up.
There are a lot of unknowns leading up to Election Day in November. But there is one thing I know (or at least I want to believe). Harry Truman probably would have liked to use mass media halfway through his 1948 campaign. – MR