How the Presidential Race Impacts Holiday Advertising
At MarketingSherpa, we focus on providing case studies and how-to instruction that provide actionable takeaways for our readers. An overwhelming proportion of this content covers digital marketing channels and topics, such as email, social media, website optimization and more.
Of course, traditional marketing channels still have their place, and today’s post looks at two channels we don’t cover very often – the traditional media channels of television and radio advertising.
Several weeks ago, the Consumer Marketing newsletter article was a how-to guide on the trending tactics and tips for the holiday 2012 marketing season.
One tip featured some of the unique aspects of this year’s holiday calendar and how marketers can take advantage of an extra holiday shopping weekend between Thanksgiving and Christmas.
A tip that was not included in the article exploits another unusual aspect of this year’s holiday shopping season – the effect of the presidential race on television and radio advertising.
This tip applies equally to consumer and B2B marketers, and we understand not all of our MarketingSherpa blog readers engage in traditional media marketing. But, for those who plan on television and/or radio advertising over the next several months, this tip provides both a challenge to face and an opportunity to exploit.
JT Hroncich, President, Capitol Media, says the presidential race will impact traditional media buys in two ways – one negative and one positive.
“Thank Barack Obama and for Mitt Romney for your inflated ad budget,” JT states. “Every four years, marketers go head to head with candidates and issues-based organizations for advertising. The number of TV and radio advertising spots tend to decrease, while their rates increase.”
He adds that marketers should be prepared for early spot buys, now through early November, that will be considerably more expensive and harder to get than they are during non-election years. JT says when budgeting for traditional media, expect to spend more for those early spot buys and to consider some late season — mid-November, early December — buys after the season is over. Any unsold inventory can be up for grabs.
Here is JT with a deeper dive into the challenge for advertising this fall:
Fourth quarter is usually strong for ad spend and tight on ad inventory, but it will be even more competitive for marketers with the combination of holiday and political ad spending.
During early fourth quarter, September through early November, expect to spend more for less inventory.
These months are the final stretch. More money is spent at this point in the campaign cycle than at any other. Campaigns traditionally pump most of their money into buying spots during the last six weeks of a campaign.
Don’t be surprised if the first part of fourth quarter is tighter than normal for marketers, especially in hotly contested political states. Political advertisers tend to target local markets over national ones, especially in swing states like Ohio, Florida, Virginia and Colorado.
Campaigns are focusing on states where voters are still uncertain or where they tend not to favor one party. So expect significantly lower inventory in these states and higher rates.
JT says marketers pay for some of the perks political advertisers receive:
By law, political campaigns get first dibs on spot advertising, so expect them to get the prime spots and spend less for them.
And, with the early holiday gift of new federal legislation eliminating restrictions on donations by corporations and unions, Super PACs have more money to purchase considerably more ads. Since political advertisers by law get the lowest rates on spots, stations and networks have compensated for those losses with higher rates for nonpolitical advertisers for less optimal placements.
But, according to JT, all hope is not lost for holiday season television and radio advertising:
The new FCC Political Ad Disclosure rule now requires broadcast stations to publish the rates they charge political advertisers on their websites. This is huge for advertisers.
Previously, broadcasters had to make this available at the station, and interested parties had to come and look them up. This can be a big help in negotiating spot rates in local markets.
Cable stations, however, are not impacted by this ruling. This ruling will be a boon for late buyers willing to do their homework, early buyers, however, won’t benefit until next election cycle.
And, to provide MarketingSherpa Blog readers with a little more insight into where all those political advertising dollars are actually going, I reached out to another expert source — John Shelton, CEO, STRATA, a provider of media buying and selling software.
John says the top four political advertising channels are:
- Television stations
- Network cable television
“TV continues to be the top way for political advertisers to reach a coveted audience – the people on the fence politically who aren’t really looking for messages,” he explains. “You can reach this passive audience with quick and, as they hope, memorable messages. Political shops put TV on such a pedestal that all of those we polled feel it is just as important, or even more important, than it was just four years ago. Political advertisers can cast a very wide net with TV in hopes of capturing key votes.”
On STRATA’s media buying platform, advertising dollars in June were up 117% compared to 2011, and up 303% in July. The July lift represents $290 million in advertising spending.
John adds that STRATA’s clients have informed them that prime TV inventory in Florida is already sold out. (So sorry to everyone at the MECLABS’ home office in Jacksonville Beach.)
What does all this mean for marketers heading into the holiday shopping season?
“With an influx of advertising through the election, the Christmas advertising season will become compacted,” John says.
He continues, “It will start the day after the election. And, this constrained timeframe will drive up ad costs, and lack of ad space will push ads outside of primetime. Ad dollars are bound to spill out over to all of the other ad mediums. This does happen every fourth quarter, but during a political year like this – it will be amplified tremendously.”
Swing-State Stations Are Election Winners – via The Wall Street Journal
Air time shrinks, rates jump as presidential race heats up – via New York Post