February 20, 2020

Digital Political Ad Spend Soars to Record High

By Jay Bemis | Advertising Systems Inc.

Billionaires running for president will help boost digital political ad spending past $1 billion for the first time in U.S. elections — and then some — with spending on digital political ads expected to reach a $1.34-billion total in the 2019-20 election cycle, eMarketer reported last week.

That $1.34 billion in digital ad spending is but a fifth of the $6.89 billion projected for political ad spending overall in this election cycle, with TV getting a lion’s share of that nearly $7-billion total at 66 percent.

A large number of Democratic candidates in the primary elections, once standing at a couple of dozen, is one key factor in the increased digital ad spend, eMarketer said.

But it quickly noted another: Billionaire candidates Michael Bloomberg and Tom Steyer investing large amounts of their own money into their campaigns — and prioritizing digital ads in their ad mixes. President Trump, meanwhile, is starting his re-election efforts with a huge amount of cash on hand to spend on digital ads, eMarketer reported.

“Campaigns will spend the money they have, so to a large extent, total political ad spending this year is dictated by the success of fundraising efforts — along with billionaires’ willingness to spend their own money,” eMarketer principal analyst Nicole Perrin said.

“Between those deep pockets and Democratic candidates’ need to spend money to get themselves on debate stages last fall, we’re already on track for a record season.”

Acknowledging that TV will still get a majority of political ad revenues overall, Perrin added that “political advertisers aren’t forgetting that a third of US households do not get traditional pay TV services, and they are looking to connected TV to extend their reach to those voters.”

State Races to Generate Their Fair Share of Revenues, Too

Across the country, marketers regionally will get plenty of opportunity to wield their newer tools, such as geotargeting and programmatic ad buys, when it comes to selling ads outside of the presidential race.

In another recent report, Advertising Analytics, a nonpartisan firm that tracks the ad industry, broke down projected overall spending for the 2019 election cycle — including not only the presidential race, but state races for the U.S. House and Senate and gubernatorial seats as well.

It says that of the $6-billion-plus to be spent overall across 2,000-some elections, the presidential campaign will generate $2.7 billion of those ad revenues, with $800 million of that to be spent on digital ads.

Campaigns for the U.S. House nationwide, meanwhile, will garner $1 billion in ad revenues ($242 million digitally); Senate races will bring in $789 million ($176 million digitally); and, gubernatorial races will reap $252 million ($64 million digitally).

The Advertising Analytics report offers these further insights into state campaigns:

The U.S. House

• “2018 saw Democrats win many suburban seats. We expect this trend to continue in 2020 in the Texas and Georgia suburbs.”

• Texas is “likely the crucial House battleground of 2020” with seven races, each projected to see $10 million-plus in spending.

• The Atlanta suburbs will feature two of the nation’s most expensive races, with each expected to see more than $20M in spending.

The U.S. Senate

• Colorado and a special election in Arizona most likely will gain the most attention, Advertising Analytics says, adding that Democrats must pick up both of those states “to have any chance of reclaiming the Senate.

“ … With three seats needed to reclaim the majority, and the likely loss of Doug Jones’ seat in Alabama, the Democrats’ hopes will rest on winning several long-shot races in North Carolina, Maine, Kentucky and Georgia.”

Races for Governor

The $252 million in ad spend is a 56-percent increase over the 2015-16 election cycle.

“Given that 36 states hold their elections in non-presidential years, this total is still considerably lower than other 2020 spending levels,” Advertising Analytics noted.

“However, Montana, Kentucky, Louisiana, Mississippi and North Carolina all have races in the 2019-2020 cycle that should be competitive.”

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