Like politics itself, advertising is a zero-sum undertaking. The more commercial time sold to political advertisers, the less there is available for all other advertisers. Kantar Media’s latest analysis suggests that in especially key media markets in 2016, political’s share of all available TV ad time could reach 40% to 50%, meaning that one minute of every two minutes of commercials aired in those markets will be bought by candidates, parties, and outside groups. No other advertiser “category”—not auto, telecom, retail, medical, etc.—has ever claimed or wanted even close to that amount of share; no TV platform has ever wanted to sell anyone else that much. The biennial-to-quadrennial surge of political ad revenue at a time of slowing growth for traditional media companies is too good to pass up.
We know a lot about where this tsunami will hit, starting with local news and the network affiliates that air it. In looking at ad activity in eight politically hot markets in June 2014, for example, Kantar Media Chief Research Officer Jon Swallen found that 68% of all political ad time was placed during local newscasts. In October 2014, 62% of all political ad time aired during local news.
In fact, political ad buyers’ unshakeable news habit is probably the main reason why local broadcast TV continues to receive the lion’s share of political ad budgets. This chart shows that in the Cincinnati market during that timeframe, across six monitored stations, the ABC, CBS, FOX and NBC (“A/C/F/N”) stations had a combined 66% of all available TV ad time but 93% of all political ad time. In Washington, DC, across nine tracked stations, the A/C/F/N stations had just over half of all ad time but 92% of all political ad time.
Market madnessGeographically, the disruption caused by political advertising tracks with the shrinking of politically competitive America as well as the perforating of campaign finance laws. The ever smaller two-party battleground and the post-2010 proliferation of super PACs have channeled more political ad dollars into fewer media markets. Just a dozen to 15 states now regularly see competitive general elections for the US Senate, governor and other major state executive offices. Every fourth November, a subset of these same states host scorching battles in the race for president.
In the other states, the political ad spend increasingly flows in competitive primaries. A slate of contested nominations in a market can cause major heartburn for other advertisers, as well. But not to the same extreme degree as the amassed air forces of both sides—candidates, party committees and outside groups—taking flight in a presidential general election with other major statewide offices also on the ballot.
While a Donald Trump ticket may shake up the 2016 battleground, adding states like Arizona, Georgia and Michigan, Trump’s biggest impact for the purposes of navigating ad disruption may be heightened urgency among Republicans to pour resources into keeping control of the Senate and possibly even the House.
Of the 10 states currently ranked as competitive (“Toss-Up” or “Lean”) in the 2016 presidential race by the Cook Political Report, eight are also hosting competitive Senate races. Three are hosting both competitive Senate and governor’s races: New Hampshire, which includes the Boston market; North Carolina; and as an honorable mention, Ohio, where the Toss-Up governor’s race in West Virginia means certain southern Ohio markets will be flooded with ads for that race as well as for Ohio’s own presidential and Senate contests.
Five states are hosting presidential-and-Senate twofers: Colorado, Florida (where the Toss-Up race to replace Sen. Marco Rubio includes two contested, late August primaries), Nevada, Pennsylvania and Wisconsin. And in Iowa, Judiciary Committee Chairman and Sen. Chuck Grassley’s refusal to hold hearings for US Supreme Court nominee Merrick Garland is making Grassley the focus of an unexpected ad skirmish which will help crowd the airwaves and potentially soften his current status as Likely to win re-election.
In many markets across these states, political’s increasing share of all available ad time in late summer and fall is likely to look like Iowa markets in the run-up to the February 1 caucuses. While the state saw a ramp-up that lasted several months, as late as two months before voting, political’s share of total ad time was still at or below 10% in three key markets: Cedar Rapids, Davenport and Des Moines. From that point on, it exploded from a high of 10% in Cedar Rapids on November 30, 2015 to a high of 53%, also in Cedar Rapids, in the week leading up to the caucuses. Across all three markets, the high averaged at 7% on November 30 and reached 45% by the caucuses for a spike of 38 points:
While political’s rise happens at the expense of just about every other category of advertising, this graph below shows auto taking the biggest hit once political’s share of total ad time reaches 15% to 25%. Note, though, that auto was on an upward trajectory, i.e., regaining share, once political’s share grew beyond 25%—in part because auto is TV’s biggest mainstay advertiser, and in part because the caucuses took place on the first day of February and auto advertising reliably picks up toward the end of a month. Retail and telecom advertising wound up in worse shape than auto, while medical services and supplies fared better against political ad disruption, possibly because of Iowa’s older average population.
New Hampshire, given the dominance of Manchester-based WMUR and obligation to buy expensive Boston TV, is a unique situation—but one that will be repeated this summer and fall given that New Hampshire is hosting among the most competitive US Senate and governor’s races in the country. By mid-September, political’s share of ad time in Manchester was 20%. By early January, it was 44%. The week before the primary, it reached 56%. Also by the primary, political’s share in Boston had reached 15%.
The impact on other advertisers was somewhat different from in Iowa. Once again, auto took a steep drop once political’s share reached 10% to 15%, but then recovered while telecom, medical services and supplies, and the “all other paid advertising” bucket fared worst by the time political’s share peaked.
The message muddleWhile disrupted placement is a recognized challenge in the nonpolitical ad world, disrupted messaging is a risk that’s harder to dodge. Negative ads are always an issue: nonpolitical advertisers don’t want their carefully crafted, optimistic messages airing alongside character-slashing ads thrown on the air like splatters of blood. But the expected dominance of national security in political ads this year—it’s the leading issue in presidential advertising so far, by spend—means those feel-good ads are likely to be airing alongside this…
…while the popularity of bashing Wall Street means local bank ads may be airing alongside ads attacking, well, banks.
This presidential primary season has been unusually harsh on corporate America. Bernie Sanders’ success with his “rigged economy” message has Hillary Clinton singling out specific companies in her TV ads: Valeant for predatory pricing, Johnson Controls for accepting taxpayer help during the auto bailout then offshoring, and names such as McDermott, Medtronic, Tyco and Weatherford. Trump’s regular riffs against Nabisco and Ford could go airborne any day.
We’ve come a long way from 2012, when the-Senate candidate Elizabeth Warren’s ad hitting GE on taxes (or no taxes, as the case may be)—“Washington lets big corporations like GE pay nothing, zero, in taxes”—was a brief flash in the pan. The candidates who are currently closest to achieving the nation’s highest office are strikingly willing to single out companies for allegedly being on the wrong side of regular Americans. And while the brands singled out in ads so far aren’t household names, this is a trend that could pretty easily spread down the ballot and closer to home.
Data visualizations created by Kantar Media’s Harley Ellenberger.