Ask anyone in Ohio what they’re least excited for during the home stretch of this year’s Election season, and I bet you they’ll say the non-stop television, print, and online advertisements from Obama, Romney, and other Ohio politicians trying to win the battleground state. At the Democratic National Convention in August, the crowd cheered and laughed when Obama said he was even tired of saying, “I’m Barack Obama and I approve this message.”  Election season always means a surging tidal wave of political advertising. The 2012 elections are expected to break records for ad spend – after the 2008 elections hit a new record as well. According to Kantar CMAG, the United States will see 43,000 political spots a day until Election Day. We know what all of this means for the average American voter preparing to go to the polls, but what does it mean for the advertising industry?

The Way I See It

  • I see a surge of revenue for local television stations, especially in battleground states, and online ad networks with spots from politicians and campaigns, as well as business groups, interest groups, and think tanks.
  • I see a promising surge in activity for the advertising industry that should have a positive overall impact on advertising spending – perhaps enough for the rumored recession ahead to be postponed.
  • I see an election season that may spell change for the future of political advertising and advertising in general – with a potential shift from traditional, local TV spots commandeering political ad spend to more innovative online, social media, and mobile advertising claiming more of the ad dollars. What has a greater impact on voters?

The Way the Industry Sees It

I sat down with Steve Farella, the founder and CEO of TargetCast, to pick his brain on this year’s political ad spend and what it means for the advertising industry as a whole.

Kantar CMAG projected the total spending on local spot TV advertising in the 2012 elections will be at $3 billion. What impact will that have on the advertising market as a whole?

At this point in the race, the largest ad spends are anticipated to be in those states that are still considered “swing states” where it is unclear whether they ultimately join with other blue or red states in the election. Those states currently include: New Hampshire, Ohio, Virginia, North Carolina, Florida, Wisconsin, Iowa, Nevada, and Colorado. Generally we see little national advertising and it tends to have only slight or no impact on national broadcast. Most agencies work with their clients to plan their local scheduling and daypart utilization so that, where possible, they side-step the heaviest pre-election weeks based on the clients’ needs. Primetime garners 23% of campaign spend, while combined News dayparts gets 32%. Early Morning saw significant growth between 2008 and 2010 and we expect that trend to continue. Access and Early Fringe also see activity while Late Night, Daytime, and Weekend see less.

In 2008, spending on political ads hit a new record. How does 2012 spending and overall advertising compare with the last election?

The explosion of Super Pacs – 501 (c)(4) organizations, trade associations with political arms – are the biggest development in 2012. For example, advertising weight in the market of Columbus, Ohio for the week of 8/15-8/22 reached 1,842 presidential race spots as compared to 832 spots in 2008. Las Vegas saw its presidential spot count go from 925 in 2008 to a record 2,870 in 2012. Wells Fargo analyst Marci Ryvicker has raised political advertising estimates from $4.9 billion to $5.2 billion by Election Night. So far, presidential candidates have spent more than seven times the amount of money spent in 2008 on digital ads (up from $22MM to $159MM). Online ad spending has doubled as a percentage of campaigns’ budgets over the same time period. Thus far, online ad dollars have mostly focused on emails, display ads, sponsored search terms, and audio and video ads.

Continue Reading Paid for by Ron Urbach: 2012 Election Season for the Advertising Industry