How the coronavirus could impact US political ad spend

As the coronavirus pandemic eclipses all other news stories,
presidential candidates have slowed their campaign efforts and
advertising spend, according to Adweek.

March digital spending, by candidate

During the week of March 17, total ad spending from Democratic
presidential candidates Joe Biden and Bernie Sanders reached
approximately $1.7 million per candidate — a significant drop
from the respective $7.8 million and $9.5 million in the week
prior.

In particular, both candidates are pulling back hard from TV, as
neither has run a television ad — in any market — since March
17, according to Advertising Analytics. With most of the remaining
primary elections delayed, both candidates will likely conserve the
majority of their remaining advertising budgets until further
notice.

If the pandemic continues through the summer, aggregate campaign
spending will change in two major ways:

  • Shifts in media consumption habits during the quarantine will
    likely guide campaign spending more toward digital. The pandemic
    has shut down traditional canvassing and outreach efforts for both
    campaigns, and thereby weakened the efficacy of out-of-home
    advertisements, radio, town halls, and public rallies. Moreover,
    people are spending significantly more time on social media and
    with streaming services for news and entertainment. The resulting
    impact will likely lead campaigns and other politically affiliated
    groups like
    PACs
     to shift an even greater share of campaign budgets to
    social media and search advertisements — and possibly even CTV
    ads. 
  • President Donald Trump may spend less than expected due to
    extensive media coverage and challenges with messaging. The
    President’s reelection campaign still holds over $94 million in
    cash on hand, compared with Joe Biden’s $12 million, and Bernie’s
    $18 million — but how much of that he spends may be contingent on
    the duration of the pandemic. While the other candidates can go
    negative on the President’s handling of the situation, Trump may
    face barriers self-promoting during a national crisis as it could
    be considered tone-deaf. Moreover, Trump may also have less of an
    incentive to spend on advertising as his regular and
    well-publicized coronavirus briefing provides him with a
    significant amount of earned media, which seem to be relatively
    well-received so far: Trump’s averaging polling numbers have
    increased since early March, according to FiveThirtyEight.

As the onset of a recession leads to a reduction in advertising
across the private sector, platforms and networks will likely
become especially dependent on political ads in the latter half of
2020. In 2020, ad revenue for linear TV is especially at risk due
to the recent loss major sports leagues like the NBA as well as the
Summer Olympics — ad revenue for traditional “linear” media is
now projected to shrink almost 12% in 2020, per revised
Magna estimates cited
by Variety.

Networks and other advertising mediums will feel significant
pressure to make up for these losses. To that end, while political
advertising will also see a pullback, it could hold up
comparatively well: Magna has also revised down its overall media
sales projection by 2.8%, and stated the reason it did not revise
its projection down any further was due to an expected surge in
political ad spending come this fall. The net impact of this
dependency on political ad revenue will likely result in an even
more saturated media environment, in what is already expected to be
a competitive election.

Want to read more stories like this one? Here’s how to
get access:

  1. Business Insider Intelligence analyzes the media and marketing
    industry and provides in-depth analyst reports, proprietary
    forecasts, customizable charts, and more. >>
    Check if your company has BII Enterprise membership
    access.
  2. Explore related topics in more depth. >>
    Visit Our Report Store
  3. Current subscribers can log in to read the briefing
    here.


Join the conversation about this story »

Source: FS – All – Entertainment – News
How the coronavirus could impact US political ad spend