Advertising in an Election Year

Welcome everybody to another edition of CPG Insiders. I'm your host, Mark Young with a co host standing by, Justin Gerard.

Wow, what an introduction.

So Justin, we're gonna talk today about the election year.

Yes. Yeah, it's a big year. And how's that gonna affect you?

And keep in mind we're not here to talk about who to vote for. No, we're here to talk about how it's going to affect your advertising and your media buys.

Absolutely, absolutely.

So let's get to it. So when we're looking at this as a presidential year, so this is a year where we have national campaigns, the entire Congress is up for reelection, A third of the Senate is up for election. There's what, maybe 20 governorships or so up for election. So it's a big ballot this year and big ballots mean big budgets. When we look at as of this recording right now, Mike Bloomberg has spent a half a billion dollars.

Yeah, last time I looked up, there's an estimation that there's going to be $10 million spent on political ads for this year.

10 million or 10 billion?

Billion, excuse me, Billion. Yes.

Well Michael Bloomberg will do that alone.

Yeah.

So he's already spent a half a billion dollars. So the first thing to keep in mind, folks in the world of political the Congress in their inevitable quest to always be fair to the voter and to never do anything that's self serving. They passed a rule that said that the media can never sell media to a politician for more money than the lowest price. They sold it to an advertiser if the lure. So they rigged the system so that they get the best pricing. Now what this does, this increases the cost of media because now the media knows, well, I can't give my regular client a great deal because if I do then I have to give all these politicians the same deal. And understand something folks about political the media makes money off of it. $12 billion. Yes, they're going to make money. It's not the ideal money because it's temporary, it has a huge spike around it. Then it goes away when the election's over. And in many cases getting paid for these things are even difficult. I mean, who is it? Al Sharpton still owes what, a half a million dollars in unpaid media and he ran in 2008, I think. Yeah, so it's not really money they business they want because. And it messes with their regular advertisers because people like us, we're the bread and butter. We're the people that are there. 52, you know weeks out of the year, every year. And they don't want us to get cut out of the media because they don't want us to shift our attention to other places. So the first thing we'll look at is the national media. Well, the good news is the media that will be less affected or least affected are the national buys.

Yes.

And the reason is, is because even though we have presidential elections running, the politicians have learned now that even when they're battle for president, it boils down to key states. There's about 20 plus states and those are the battleground states. Places like Michigan and Ohio, Florida, Pennsylvania, and they battle for these states. So as an example, nobody battles over California.

Right.

Because it's going Democrat. Democrats don't need to spend to win. Republicans don't want to waste money on something they can't win. New York, same way. Chicago, same way. So that's the reason why a lot of the national campaigns don't buy national media.

Right.

So they tend to buy spot radio or spot TV market by market. So for our clients that are advertising national cable, you're okay. Some of the news programs will see some pressure because some of your PACs, your soft money and your issue people will come in and buy CNN and Fox News and places like that. But for the most part, most of that stuff should be okay.

Yeah, yeah. But your national buys shouldn't be affected as much. Really. The only way your national buys are affected is going to be when you're buying a lot of news. And that's because when you're in a political year, there's the potential of a lot of breaking news segments which are going to eat up advertising errors.

Right. That just eats up inventory.

Period. Right, right. Has nothing to do with the media that they're buying. It's just the facts of the facts. Somebody said something or something happened, therefore this is breaking news. We just got rid of ad inventory to cover this.

Right. Or things like coronavirus, which can have breaking news or tornadoes, whatever the case is, and eat up some of the ad inventory on the news stations. Now, on a local level, this is going to get really contested because you're going to have Senate races that are buying media, congressional races buying media, governorships, and you're really going to see these presidential elections buying up stuff that's in those battleground states.

So.

So if you're advertising in a non battleground state, no big deal. So if you're in California, things aren't going to change that much. You're in New York, it's Not going to change that much. You're in Ohio, it's going to be a battle because that's a battleground. Florida, that's going to be a battleground. So in those places you're going to expect a large increase in media costs and that could be 30%, 40% increases.

Yeah, I believe that latest study showed that from political advertising as a whole, the share of voice for general Advertisers dropped about 20 points because of how much media they're buying. And I believe it. I absolutely believe it.

Now the politicians are also turning to digital too.

Now that's the biggest change you're going to see in my opinion in 2020, is politicians have finally started to learn. And Trump started this. He's the one who in 2016 really showed the opportunity and people are starting to learn. But is in that digital space where people are understanding that, hey, there's a lot of people consuming media here and it will also enhance some of the traditional media that I'm buying. So I need to be spending here.

Now the good news in digital media is I suspect it will raise some of the prices in digital a little bit. But digital is one of those areas, unlike national television, that usually has an abundance of inventory.

Yeah, and really where you're going to see the politicians spending their time in a digital space is going to be Facebook. From an ad spend perspective, it's going to be in Facebook, they're going to be doing some more programmatic buys. And really in YouTube, that's really where you're going to see them spending the most. Now the benefit when you look at all those platforms is Facebook is so massive, the audience is so massive that yes, it's gonna increase some cost, but because it's so huge, it won't be that big of an impact on you. Cause there's still so many people to actually reach. So it shouldn't be too big of a deal. When you look at your YouTube again, it shouldn't impact you too much. A lot of what these politicians are gonna do is they're going to take their target audience, they're going to geo target, but then they're also going to keyword target based off of the interests and behaviors of who they need to reach. So there are going to be some times where they're going to be potentially hitting and going after and bidding after some of the terms that you may relate to as your consumer as well. But again, I don't anticipate that it will be too much, of course, depending who your consumer is. I Mean, that's a big thing. You got to understand, depending on who your audience is, it may be impactful, maybe something you want to pay attention to.

I think local radio will be a train wreck.

Oh, gosh. Yeah.

In the battleground states. Yeah. And it'll also be busy with the state elections.

Yes.

With the Senate races, with the congressional races.

Yes.

Sirius should be better.

Yes. Yeah, serious. Will be fine.

So I don't think Sirius will have a big inventory problem.

No.

Podcasting will be one of the bright spots.

Yes.

Because the politicians aren't as likely to get in and buy podcasts. Because podcasts are long term media buys.

Correct.

And they're looking for the short term hit.

Yes. Yeah. They don't see the benefit there. Now they may be, they, they may be spending more of their money to, to get interviews. But that's not going to affect your ad buy.

Right. But the, but the non political podcast especially.

Yes.

Are not going to see this money.

No, no. And that's the other thing too is when you're talking about your podcast or even host voice radio, they have the ability to reject. So it's not like if there's a politician that sees a really big value in a podcaster's audience, they say, hey, I want to buy ad spend here. Podcasts are going to say, I'm staying out of that game.

Yeah. And you're not going to have, you know, Rush Limbaugh, Sean Hannity that are going to be doing paid endorsements for politicians.

No, no, they're going to stay out of that business.

So should be some open air, so talk rated, give some opening. Podcasting, give some opening. Actually going old school. Print will still be okay.

Yeah.

For a lot of our clients, we do a lot of things with advertorials and stuff like parade and newspaper. That stuff should be safe, should be fine, shouldn't be a problem there. Outdoor will get some pressure on it because some politicians do like to buy billboards. So there'd be some pressure there. But overall, I think that pretty much covers the landscape for this year.

Right. It's understanding if you're trying to target regionally or locally, depending on where you're targeting, you're going to run into some issues. When you're talking about your traditional media. If you're buying nationally, you shouldn't see too much disruption, you shouldn't see too many issues. The only other effect potentially on any national advertisers doesn't really have to do with ad buying. It really has to do with just it being a Political season and with the political climate, depending on what your brand's values are or what your audience's values are, you may decide to avoid some more news programming because you just don't want to be associated with that conversation. But that's a brand decision to make. There's still a very valuable audience. So as long as you don't see issues with your ad appearing after a segment on CNN or Fox News, then it's not going to be a problem.

And some clients really press into that.

Yeah.

You look at Mike Lindell at MyPillow. He pushes heavily into being a conservative, as does like, what is it? Black rifle coffee. On the other side you got Ben and Jerry's ice cream.

Right.

Who's very, very outspoken as far as their support for the left and for Democrats.

Yep.

And sometimes that can work for a brand. But if you are going to do that, it needs to be a long term strategy.

You really need to, you need to own it.

You need to own it and you need to think about what you're giving up and what you're going to gain. You have to really do the math. Yes, I'm going to lose half the country.

Right.

So if I lose half the country, can I make up for it on the other half of the country?

Yeah. And really that brings up another point too. It's understanding that when we're in a political year that if you are buying news, understanding that yes, your rates may go up, but that's because it's political year. So more people are tuning in to news programming.

That's true. Then the viewership is really.

So the viewership is a lot higher. So that is really the only impact you're going to feel for the most part. We're talking in general terms here that you may see your rates increase, but that's just because their audiences are going to be a bigger.

Yeah. And I would expect to spend a little bit more. And especially if you're doing spot buying, you're going to spend a lot more.

Yes, yes. Now the only other space for this, you may run into some pressure if you're a national advertiser. And that's really something that when we do here is if you're buying nationally unwired, then you might run into some issues because you are still buying unwired. So you're buying local inventory. So maybe there. But again, it wouldn't be too massive, but potentially you might run into some issues on that front because it's still somewhat of a, of a local inventory that you're buying up.

Well, if you're dealing with any of this and you have any questions regarding how the political landscape will shape up your media buy or techniques you can do to try to get around it, you can feel free to reach out to us. Our media director is brilliant at this stuff.

Yeah, incredible.

So you can always get a phone call with him and he's happy to, you know, to be able to share insights with you. That's Jeff Peterman. You can always talk to Justin. You can always talk to myself. And, you know, always don't be afraid to reach out to us. Yeah. So you can always find us at the website for the show, which is CPG Insiders. Or you can go to jekyllheidlabs.com and you can find out how to get in touch with us and Justin. I think that's it for today.

I think that covers it.

We'll see you on the next episode. If you're looking to greatly increase sales on your CPG product, don't hesitate to contact us at Jekyll and Hyde Advertising and Marketing. By the way, the only advertising agency with a guaranteed result. Just go to jekyllheidagency.com or feel free to give us a call at 800542SA.