September 23, 2019
Agency View - 2020 Election Year: Navigating 34 Times Spend Increase
In 2020 we’ll be navigating 34 Senate races, 11 Governor Races and a General Election that has been building momentum since 2016. How the market will look with political spending increases being predicted to range from $6 billion to $10 billion is a key topic across our agency meetings. A huge shift to digital is an obvious trend. But as agencies are getting really good at understanding how audiences (and voters) are consuming media, we are predicting that all channels will be impacted, resulting in a larger trend of convergence across the overall marketing landscape.
If activity to date is an indicator, this larger trend is going to be challenging. 2019 has already proven to have an incredible amount of noise. Kantar Media/CMAG reports 3 candidates have already been on the air since January with thousands of airings in National and Local TV as well as Cable in Des Moines and Cedar Rapids, totaling $850,000 in spend. Compared to the first weeks of 2015 (leading up to the 2016 election), according to Kantar, there was only one presidential spot on the air, with just 11 spots in New York and Washington with a $26,000 spend. That would put the first 10 weeks of 2019 activity at 34 times that of 2015. That multiplier, coupled with the long list of democrats in the running, makes for a plethora of ads to come.
We’re already seeing that Network inventory kicking off 2020 is going to be tight beyond the political activity. NBC Sports reports that NBC Universal will air more than 2400 hours of Tokyo Winter Olympic Games coverage in February. That’s just about equal to the total hours of Vancouver 2010 (835) and Sochi 2014 (1600+) combined!
Active’s Media Buying Group is taking these spending indicators and assessing all the local media political windows around these races to advise our agency partners on strategies to preserve their media plans. We’re also overlaying our technologies and insights from our political marketing partners to determine where we believe there will be challenges and opportunities. Thus far, we believe we’ll see considerable spikes in Arizona, Florida, Maine, Michigan, New Hampshire, North Carolina, Pennsylvania and Nebraska’s second congressional district. As a result, we’re preparing our agencies for pricing spikes in given markets, identifying markets they may want to avoid and managing expectations for inventory movement.
We’re also providing solutions such as Unwired or OTT to help maintain CPMs. We’re finding that buying FEP video inventory (which runs on Connected TVs, desktop, mobile and tablet devices) is another alternative to traditional buying that is not as heavily affected by political activity. FEP is in step with how voters are consuming media on a daily basis. Jim Meskauskas, EVP, General Manager, Strategy & Planning at Active Digital and iNvolved Media explains “there’s going to be a ton of money chasing a lot of audiences, putting a strain on more traditional linear capacity, but needing to go to OTT and FEP where political activity can use data to target niche constituents.” Dennis Quinn, Active’s Chief Revenue Officer tells us, “Active has made significant investments across a myriad of media owners to ensure that we have advantaged, leveraged positions across the growing body of OTT and FEP inventory. This will enable us to satisfy the target audience communication delivery goals for our clients in vehicles beyond the more traditional linear channels. Active is prepared to help our clients navigate this tricky marketplace in 2020.”
Let’s face it. We’re in for a rocky road ahead; but, as they say, “difficult roads often lead to beautiful destinations!” 2020 may be the year many of us need to get out of our comfort zones to discover more effective ways to reach our audiences. At Active, we’re up for the challenge. If you would like to hear more about our marketplace insights, perspectives and ideas, give us a call. We would be happy to meet with your team and brainstorm how we can help you achieve more for your agency and your clients.