In 2016, $10 billion was spent on political advertising across the U.S.—a drop in the bucket when compared to the $194 billion spent on all media that year. But that number becomes more meaningful for marketers when you consider how it’s spent, when it’s spent, and who its targeting. All of this combined shows that this year stands to see unprecedented budget pushed through digital channels—and the potential for much higher CPMs. Here’s a look at what that could mean for your business, along with strategies you can use to ensure pre-election marketing success this holiday season.
Timing and targeting of political campaigns
As mentioned, $10B doesn’t seem like a lot in the grand scheme of things. However, more half of that is spent within the month leading up to the election—aka October—and this can have a significant impact on your campaigns. Think about it. Maybe your business heavies up in the holiday season because those 6 weeks of buying account for 25% of your sales. Without that increase in spending, it’d be harder to reach customers and drive more purchases. Now, imagine how you’d shift your spending if 100% of your sales happened in a single day. You’ll begin to understand why political campaigns must allocate so much budget to October.
But it goes a step more granular than this as well. Not only is their money drastically heavied-up during this time period, but the vast majority of their political spending happens in just a few key battleground states. Joe Biden doesn’t need to spend anything to win New York or California, so he won’t. Instead he and Trump will focus on how they can win new voters, much like marketers focus on incremental sales. For example, Biden is already spending in swing states like Michigan, Wisconsin, Pennsylvania, Arizona, North Carolina, and Florida—and party leaders are pushing him to add Texas, Georgia, Nevada, and Ohio to that list too.
If you use a regional ad strategy—or have a regional brick-and-mortar presence—these are the states that may see a significant lift in costs in October. Even in non-Presidential election cycles, like the 2018 midterms, the 8 weeks before election day saw a 25% rise in CPMs on Facebook in key states.
Digital will finally lead in this election
For all the talk about Cambridge Analytica, the media missed the true difference between Trump’s and Clinton’s campaign strategy: Trump spent 47% of his media budget on digital media while Clinton only spent 8% of hers. And these spends largely happened on Google and Facebook. In fact, the Trump campaign in 2016 spent only 1% of its budget on DSPs. Clinton? 0%.
Trump’s effective exploitation of these highly influential channels—and their robust automated targeting—was a wake-up call across the political landscape. So it’s no surprise that eMarketer has reported that the primaries saw a 200% increase in digital spend in February of 2020 versus the 2015/16 season, against a 63% lift in overall spend.
But here’s the most critical part: that 200% rise in digital spend was before we were living through a pandemic. In a normal election, billions are spent each year on what’s called “retail politics,” which is mainly shaking hands at a pancake breakfast and kissing babies. But it’s hard to imagine a friend today inviting you to a house party for a candidate, or a canvasser knocking on your door to speak to you about an election. Those tactics are off the table.
So when you consider that 1.) in February digital is trending +200% cycle-over-cycle, 2.) COVID will force more campaigning online, 3.) 50% of campaign media budgets in October will be spent on Facebook and Google, and 4.) money will largely be spent in 8 states, you can start to see a clear picture of how this could impact ad rates.
Strategies marketers can use
Before implementing a slew of new strategies, you should test the waters first. If you’re moving into September and October while still hitting your targets and you don’t see much change in your CPMs, then you’re doing well. But even if that is true, it would be prudent to have a few options in your back-pocket in case your standard mix becomes prohibitively expensive.
- Have your owned channels—like email and SMS—primed and ready to go
Increase email and SMS list-growth efforts in August and September so you’re ready to capitalize on your owned audiences. You’ll need these folks through the end of the year, so employ smart segmentation to avoid spamming your list. Simultaneously, be sure you have a robust strategy to maximize your one-to-one messages through a partner like Wunderkind so you can make every marketing dollar count.
- Go where there isn’t a bidding model
September and October may be the perfect time to shift acquisition spend towards non-bid-based placements. But that doesn’t mean all strategies are created equal—case in point, Mike Bloomberg’s one-million-dollar influencer marketing flop with Jerry Media. Consider other opportunities without a bidding model like direct mail (many Wunderkind clients have seen great success with our partner, Share Local Media).
- Look for ad placements beyond Facebook
Knowing that politicians will flood Facebook to reach constituents, consider buys with premium publishers and publisher networks instead. You can do this by either going directly to their in-house sales team or with an adtech vendor that cultivates premium programmatic relationships (Wunderkind has some, of course, just to squeeze in one more plug).
Ultimately, election cycles are unpredictable. So, the savviest marketers should always have a backup plan for their backup plans—ensuring holiday sales remain steady even through a national election. Finally, if you noticed, this article didn’t talk about messaging or content during an election year, but please just don’t waste money doing anything stupid.