Political Ads Meet March Madness
Heading off into a holiday weekend with some ad talk...
A short version of ctrl+alt+persuade+delete to end the week as many prepare for Easter Sunday and/or a big weekend of hoops courtesy of March Madness. (Oh yeah, and a big opening weekend of MLB. Go Blue! 🧢)
March may be a slow political ad month, but it’s huge for sports and for that we can be thankful!!
📺💸 This week, I assigned my USC Annenberg students a fascinating (and freakin’ complicated) study that sheds light on a question many have wondered about: do political ad makers rake in the big bucks? The research reveals some eye-opening findings about the world of political advertising, which I'll delve into further below. If you've ever been curious about $$ in campaigns, this study is for you.
💰🤯We wrote last week about the growing disparity in advertising at the Top of the Ticket, with the Biden team vastly outspending (and outraising) Trump and the RNC. This trend shows no sign of slowing, with Biden raising $25M at a single event in NYC last night that drew 5,000 supporters, along with a few hecklers.
📖 🙏No wisecracks here about the Trump 'God Bless the USA Bible' being sold at $60 a clip, but they will need to sell a ton of ‘em to compete with the massive ad spends being reported by Dems and Biden.
Political Advertising's Best-Kept Secrets: Revealed by Emory University Researchers
There seems to always be two questions I’m asked about political advertising, especially from friends and colleagues in the marketing world.
Do the ads actually work?
Do admakers and consultants make a lot of money?
The short-answer to #1 is “yes.” More proof to come in following issues.
#2 has always been a bit of a mystery (by design!) but a study I came across for my class lays it out there for all to see.
In their research study Agency Problems in Political Campaigns: Media Buying and Consulting, Professors Gregory Martin and Zachary Peskowitz of Emory University do the deepest of dives into this secret world, using incredibly complex quantitative analysis of campaign expenditure and advertising data.
Note to my friends from other creative service industries like advertising production… you may want to put your seat belts on. Here are the key findings:
Media consultants charge an average markup of 41-44% over the actual cost of TV advertising.
In less competitive races, consultants charge significantly higher markups compared to toss-up races.
Republican consultants charge about 30 cents more per dollar of advertising than Democratic consultants.
Republican consultants make fewer individual ad buys and pay higher prices for the same ad slots compared to Democratic consultants.
PACs pay an average markup of 51-69% over the cost of advertising, much higher than candidate committees.
For those not in an industry that works on markup, lets just say…those are big numbers.
Now, a caveat. This study was conducted in 2017, and like most industries there has been cost cutting in political advertising. But…I’m guessing not as much as some other industries.
If you are interested in learning more about “why” there are such disparities by party affiliation as well as types of committees (PACs vs candidates, etc) you can reach out to me and I will explain. But ONLY if you do me this favor: refer my newsletter to 5 friends that you think will be interested.
We have over 500 readers to date, but I’d love for you to spread the word. And if you do, I’ll peel back the research from this study so you don’t have to.
GOP Playing Catch-Up as Democrats Dominate Early Ad Spending
The differential in ad spends for the election continue to grow. One measure of spending is so-called “pre-booked” advertising which allows campaigns to secure prime advertising slots and better manage their budgets and messaging strategies.
AdImpact does a great job of tracking these numbers. Here is what they reported this week.
Ad spending so far is on par with 2020. Early to tell if the estimates of a record-breaking year are likely, but slow fundraising may affect the early predictions, which could cause issues for media outlets looking to cash in big in ‘24.
I’d bet the “under” on the $17B estimate at this point but we will see!
Pre-booked advertising is strong, more heavily weighed towards Democrats. This is especially interesting on the Senate side as their is a LOT at stake to gain control on that side of Congress. Highlights:
The Ohio Senate general election has received $139.4M in ad reservations, followed by Montana with $111.5M and Pennsylvania with $42.5M.
Democratic group WinSenate has reserved $225.7M across six states with competitive Senate seats. Ohio, Pennsylvania, and Nevada have received the most money from the group.
Two Republican groups, American Crossroads and Senate Leadership Fund, have poured ad dollars into Montana and Ohio for their Senate general elections. They have spent a combined total of $121.1M.
The Presidential race has seen $130.0M booked in future reservations. All reservations have come from Democratic group Future Forward PAC. These ads are set to air in late summer through November. Currently, there are no future Republican Presidential ad reservations.
And now…how about all those cool ads you promised?
Well, not a lot to choose from. Biden continues with his social media onslaught and Trump is not doing much “traditional” advertising or messaging. We do have a big announcement from RFK, Jr though, who shared his choice of running mate and they issued their first video.
But first, two other ads caught my eye this week.
GOP PA Senate Candidate Launches Bio Ad
Thoughts: Needless to say, this ad was…a choice. My students are doing a mock campaign ad plan in this very race. They have been broken down into two camps (Dem and Rep) and the students got to see their very first ad by the actual candidates. There was giggling and even some blushing. But hey, we’re out here in LA, so maybe this will be effective in the Keystone State.
Dems get a big pick up in Alabama
Thoughts: Not known for its embrace of democratic candidates, Alabama voters sent Marilyn Lands, who campaigned on reproductive rights and IVF to the Alabama State House. The win is a telling sign for a GOP that hopes to hold onto suburban women support.
RFK Jr Announces Running Mate; Super PAC Releases Video
Thoughts: The announcement of 38-year-old lawyer and tech entrepreneur (as well as former big donor Democrat) Nicole Sheridan as his VP choice made some news this week. The campaign released a first video from Sheridan that focused almost entirely on vaccines and “environmental disruptions” that impact children’s health. Important perhaps, but hard to see how this changes the narrative for Kennedy. In fact, it doubles down on it.
What’s Next?
Time to shut it down and gear up for a great weekend. Whether hanging out with friends for hoops or searching for easter eggs with the family, enjoy.
As always, we'll be closely monitoring the race and providing our unique perspective on the campaign strategies and tactics that will shape the 2024 election.
So, stay tuned for more insights and analysis!
PS - Share any ads or content (good, bad, or awful) here.
Also on the lookout for contributors. If you have something to share about the ad world and Election ‘24 reach out.
Thanks for reading!