If you’ve turned on a television, visited a website, or watched a video over the last couple of weeks, you’ve probably noticed a steady stream of political ads. And, sorry to break it to you, it isn’t going to stop until election day on Nov. 3, 2020.
It’s estimated that nearly $7 billion will be spent on ads over the 2020 election cycle overall. A lot of that money is going to television or connected TV ads, as is the case every year. But an increasingly large portion of the $7 billion is going towards digital advertising ads.
Knowing there is so much competition, marketers have a decision to make: Compete now or wait until after the election.
Impact of political on CPMs & inventory
In the 2020 presidential, state, and local elections, candidates will be fighting for impressions due to the number of candidates running and other advertisers not wanting their messages to be overshadowed by political messages. With the amount of competition, it’s no surprise that video platforms like YouTube are so flooded with political ads that they can’t place them all.
Since programmatic advertising is based on supply and demand, when demand goes up, so do prices. Between Aug. 1, 2020, and Oc. 18, 2020, we’ve seen CPMs increase by 70 percent for connected TV.
When we look specifically at CPM prices for mobile and desktop for the same period, they’ve increased by 42 percent for mobile and 57 percent for desktop.
These CPM prices aren’t limited to political advertisers but cascade to non-political advertisers.
Impact on non-political advertisers
Non-political advertisers such as automotive, retail, consumer packaged goods, travel, telecommunications, entertainment, restaurants, and all other categories will be looking for ways to break through the noise and compete as CPMs increase.
Impact on non-political advertisers:
- Tight inventory – When political ads flood the market, inventory becomes scarce.
- High prices – Limited inventory and high demand lead to inflated rates where inventory exists.
For the next couple of weeks, there will continue to be several challenges for non-political advertisers who have impression goals to meet, sales to support, and profit margins to protect.
What goes up must come down for non-political advertisers.
Non-political advertisers should take a hard look at their own campaigns to determine how best to move forward during the political and post-political season.
Solutions for non-political advertisers:
- Increase CPMs now but decrease them after Nov. 3 – With connected TV prices rising by 70 percent, you should look to double or triple your base and max bids. More importantly, you should keep an eye on CPMs the week following the election as they are likely to lower quickly. If we look at the CPM trends from previous years, there is a slow decrease at the beginning of November and they increase gradually with the last week in November, standing out as the tipping point on a slight upslope trajectory.
- Pause and enable after Nov. 3 – If you can pause your campaign or decrease spend in the short term, you might benefit. After Nov. 3, you could see decreases in CPMs and more availability.
So, we’re here for you. Reach out to our team of experts, and we’ll help strategize how you can improve your advertising campaigns.