This article was originally published on Forbes.com.
In a presidential election year with a challenging economic environment and tensions growing across the planet, U.S. consumers are understandably uneasy. Advertisers are facing a challenging scenario that requires agility, foresight and possibly a touch of ESP. Understanding the dynamics of digital advertising—and how real-world events impact them—is critical to success now more than ever.
Election Year Drama
The atmosphere of an election year is always charged with heightened emotions and amplified media consumption. Consumers actively engage in content around topics they care about, research candidates and issues, and watch coverage of political events and debates. This surge in engagement opens up both opportunities and challenges. For brands and advertisers, it translates to intensified competition and increased advertising costs. It also heightens the need for caution regarding placements and adjacencies.
Political campaigns dominate traditional and digital media, vying for voter attention. Consequently, nonpolitical advertisers often find themselves competing for a share of voice and facing inflated ad rates due to heightened demand. On top of that, brands have to be vigilant about where ads appear, as advertising on certain outlets may be construed as a political endorsement. Similarly, a placement adjacent to a political ad or hot-button topic could have a positive effect or a harmful one, depending on the viewer.
Spending On Digital Political Ads Is Expected To Surge
When candidates began capitalizing on digital media in the early 2000s, the landscape was still nascent, so there was little impact on inventory or pricing. It wasn’t until the 2016 presidential election that digital ads became a staple. That year, internet advertising also saw a spending surge, leading to increased competition and higher costs. Political ad spending continued to grow, reaching $8.5 billion in the 2020 election cycle.
This election, political ad spending is expected to grow by more than 30% from 2020 to $12.32 billion, with digital media accounting for almost a third of it. The digital investment is expected to spike 156% over 2020 levels, hitting $3.46 billion. Of that, $1.56 billion will likely go to connected TV, an increase of over 500% since 2020. Google is expected to see $553.2 million; $605 million will likely go to social media networks.
This increase in spending across the digital advertising landscape will have a monumental impact on brands, which will have to navigate fluctuations in competition, cost and inventory.