Will 2018 U.S. Mid-Term Ad Tech MVPs Deliver in 2020?
Opening day for Major League Baseball came early this year, and similarly the 2020 election cycle has kicked off earlier than ever before. So now is the perfect time for political operatives to hone their skills for the next big game by reviewing the hits and strikes of last season – and when it comes to digital media in the 2018 elections, programmatic advertising is the MVP (Most Valuable Performer).
This is just one of Centro’s takeaways from this past November’s elections, where our software, Basis, was used to manage political digital ad buying for 300+ state and local races throughout the country across display, video, native, search and social media.
The trends we observe point to competitive election strategies – as 73% of the races Centro was part of had winning outcomes. Now that the next election cycle has already begun, it’s imperative for candidates and advocacy groups to plan with these factors in mind order to maximize impact in 2020. Political marketers can study the winning playbooks, project how to use it for the next cycle, and make educated, yet bold, conjectures about how to differentiate campaigns and go the distance.
Let’s unpack what worked to get campaigns across home plate last season.
Programmatic Makes the Big Leagues
Programmatic ad budgets accounted for 60% of overall digital ad spend from political clients.
This was a 14% increase over 2016 allocations from Centro’s clients and is a stark contrast to the diminishing amount marketers buy directly from publishers. Even as recently as 2012, direct buying on key local and national digital publishers was a significant part of the overall game plan for proliferating a message among voters in specific parts of America. Now, only 16% of overall digital budgets are being funneled to this tactic.
Programmatic buying offers the speed and agility to launch campaigns, optimize on the fly, and still reach precisely-targeted audiences wherever they consume media. This was heavily utilized during the election cycle, especially as audience attention fragments across multiple digital channels and platforms. It’s a tactic that plays well for politics, where the people who operate in the space want the ability to score runs by moving ad money fast and diverting it quickly to the highest performing media.
Digital Video Remains an All-Star
Video ads made up 56% of digital media political spend.
Political campaigns have long loved the emotional impact of video. As a result, not much has changed in how the elections generate massive levels of TV ad spending. What is changing is how campaigns are complementing and extending TV buys by reaching voters with video ads on digital devices. Hulu and YouTube, which garnered sizable political ad budgets, illustrates how digital video ads can be utilized in powerful ways.
Furthermore, programmatic is a tactic often used to extend targeted digital video impressions across the board. While programmatic hasn’t opened the floodgates of TV budget shifting to digital, it has demonstrated how candidates gain the upper hand by delivering the emotional impact of video with precision targeting and cost-efficient pricing.
Another factor making an impact on digital video is the increasing availability of high-quality video through programmatic channels, including connected TV inventory. The potential win-win of CTV is undeniably appealing: the big-screen impact of television, in a non-skippable “forced viewing” environment.
Hyperlocal Hits a Home Run
Marketers have leveled-up the local advertising strategy.
“Hyperlocal” programmatic tactics, which utilize location pattern data to target residents of a district, or to geo-fence events and/or polling locations – were used by more than 55% of candidate and ballot campaigns using Centro’s technology.
In previous election cycles direct buys on local media sites played a much more prominent role for Centro’s clients. In 2012, 57% of political spend in our system went to local site buys, but that dropped to 30% in 2014, and then lower to 17% in 2016. In 2018, local site direct buying represented just 10% of political spend. This shift in the campaign playbook is largely due to programmatic technology and the available of high-quality local targeting at scale.
Leveraging Utility Players
As digital devices continue to multiply, so do the options for campaigns to reach audiences across platforms.
Political marketers, now more than ever before, have comprehensive options to create multiple touchpoints with a voter. This is due to a myriad of factors coming together, namely the explosive growth in programmatic advertising, improvements in device maps, and the availability of cross-device targeting. While serving ads on desktops and phones still dominate in programmatic ad spend, we experienced significant overall spend shift in connected TVs and tablets, which were virtually nonexistent in programmatic channels during previous election cycles.
One data point to watch is the impression-to-spend ratio, where the dollar multiple on connected TV ads is much higher than other devices, because of premium CPMs in this format. As CTV scale continues to grow, we’re watching to see if costs decline—or if increased demand keeps them relatively high.
Get Your Scorecard; Know the Players
Despite the rapid ascension of programmatic as a priority in political marketing strategy, site-direct buying still garners a significant amount of digital ad dollars.
Top non-programmatic vendors for Basis political campaigns in 2018
Among ad vendors, Facebook, YouTube, Hulu and Pandora were standout players. This was partly due to their limited inventory availability via the open exchanges, and the specialized targeting offered by some. But another significant factor is the sheer national reach they offer in every voting market and desire for premium reserved inventory.
The revenue share drops off a bit after the top tier, but it is made up of the most visible brands in news and media, such as Fox News, Washington Post, Spotify and CNN. Honorable mentions go to local newspaper publishers such as The McClatchy Company, tronc, Gannett, The New York Times and Lee Enterprises, that are closely chasing the top national media organizations on this list. In the middle of those newspapers is a bit of an outlier – ESPN.
If media players want steady site-direct sales, they should enhance data-centric audience targeting and improve speed to market. A compromise may be to shift to more private marketplace products or increase use of second-party data.
Leave it All on the Field
More than half of the advertising dollars spent in the 2018 elections were used during October and the November days leading up to the election.
On Centro’s Basis platform, we saw that 53% of political dollars in 2018 were delivered in the last five weeks before Election Day, and an astounding 21% of ad dollars spent in the last 10 days. It is common for political campaigns to spend more on the home stretch for many reasons—some strategic, such as GOTV (Get Out The Vote) efforts, and some practical, like late fundraising.
Digital media—and particularly programmatic buying – is uniquely suited to handle the need for speed and scale that is affected by rapid budget fluctuations. This activity isn’t caused by last minute discounts. Quite the opposite, the flurry of ad volume in digital media creates higher demand and more competition for the buyers. The upside is that supply is meeting the down-to-the-wire demands of the market.
Bring in the Closer!
Among the 300+ campaigns that utilized Centro’s Basis platform for the 2018 U.S. elections, 73% had winning outcomes.
Centro’s mix of technology and services provides our clients with a digital media home-field advantage in driving voters to take action. Centro’s experience has been honed by more than a decade of work with political and advocacy groups in races throughout the nation, encompassing candidates at all levels and local ballot measures. Our activity during the 2018 election season gives us a wide breadth of knowledge and a diversified view on successful campaigns using digital media.
How the game may change in the next two years.
Here are our predictions for 2020 campaigns:
- Digital audio advertising will grow. The technology continues to proliferate, and increased availability of audio inventory via programmatic channels has sharply increased. As happened with video, programmatic technology could give audio a sizable boost.
- Additional state regulations on political advertising and data privacy could hamper how political campaigns advertise. During 2018, campaigns were put in precarious positions by digital platforms abruptly shutting down political ads in states with stringent new regulations. Campaigns need partners that closely monitor, and ensure compliance with, regulations – rather than just pulling the plug mid-campaign. New privacy regulations will impact companies providing audience data, or those that heavily utilize them.
- Disinformation tactics, fake news, and hacking will undoubtedly be a factor. In a recent poll conducted by Campaigns & Elections, 82% of political consultants surveyed predicted that digital strategists working on domestic campaigns will become more comfortable using disinformation tactics against opponents, and 87% predict one or both major party presidential candidates will be hacked in 2020.
- Connected TV will see an increase in spending. Campaigns targeting young voters should have this channel as part of its strategy, but CTV viewing has grown across demographics. Nielsen recently found that in cross-platform campaigns with ads served across both TV and digital devices, digital ads brought an incremental 16% to the total reach of campaigns aimed at people between the ages of 18-49.
- Local audience targeting in swing states is poised for a boost. Given the nature of the electoral college and the current climate, swing state battlegrounds such as Wisconsin, Michigan, Pennsylvania, Georgia, Florida, Texas (just checking to see if you’re paying attention!) and more will see intensive ad spending.
But nothing stays stagnant in politics or in digital media, and an X-factor could still emerge that impacts the next elections. Keep your head in the game.
Centro is a global enterprise-class software provider for digital advertisers. Our technology, Basis, is the industry’s most comprehensive and automated digital media management platform. Through a single user interface, Basis converges the entire advertising workflow, enabling marketers to plan, buy, analyze and streamline campaigns for programmatic, direct, search and social. By unifying all major aspects of digital media into one platform, Basis breaks down silos, improves performance, and helps businesses grow profitably.
For more than a decade, Centro’s technology and services have been trusted by agencies and consultants in politics, public affairs, and advocacy. Throughout the years, Centro’s Candidates + Causes group has collectively worked with 700+ political campaigns and independent expenditure committees, and 800+ issue advocacy advertisers. Our proficiency for driving perception in government, in the public sphere, or among specific audiences is a differentiated and valuable asset in this field.
Centro is headquartered in Chicago with 40 offices across North America, including a Washington, DC, hub for its Candidates + Causes team.