$3.3 billion: The cost of advertising in next presidential race

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Yes, I recognize that some in our business are predicting that spending will go down. As one colleague said to me recently, “Never again. No one is going to spend like that, particularly on local TV ads. They made no meaningful difference in turnout or perception.”
 
Such a view is understandable. After all, free social media use is only going to become more prominent in future presidential races. And yes, no doubt if you’re a Mitt Romney fundraiser, you’re still wondering if all those local, swing state ad buys were a good investment.

But at risk of offending your post election fatigue sensibilities, I’m still going with my political prediction, and I’ll even be a little bolder: The 2014 Congressional cycle will be more expensive than the 2012 presidential and congressional races. I say this because of precedence. Our data show that the 2010 congressional cycle was more expensive than the 2008 presidential/congressional cycle. 

Over the last 30 years, each cycle has only gotten more expensive. Just eight years ago, for example, Democrats and Republicans spent only about a third of what they spent during this election cycle. You read that correctly.  In 2004, each party spent in the 300 million plus range on political ads.

While I fully expect that campaigns are going to become savvier and more sophisticated in utilizing free media and social platforms, it our firm belief that local TV spending will continue to be strong in future cycles. No viable candidate is going to risk losing key local market share, and despite changing viewing habits, local news is highly watched and influential. While market share for network newscasts continues to decline, local news viewing is holding steady. We also need to keep in mind the Electoral College and voting patterns. As long as there are swing states, dollars will continue to flood into markets like Miami, Philadelphia and Richmond. 

What will certainly change is how ads are designed, and we expect – as many do – that more money will be spent on analyzing data/voting patterns and demographics. That analysis will clearly shape how ads are crafted and when they’re shown and to whom. The 2012 race clearly suggests there will be increased spend to hit the local Hispanic voters. But point being, local ad dollars will continue to flow.  During the election season, $10 million a day in ad spending went through our STRATA systems on a daily basis, and I have no doubt those numbers will greatly increase by 2014. In 2020, they may reach $20-$25 million a day.

So yes, a billion here, a billion there, we’re definitely talking real money.  And someday, it may be viewed as chump change. 


Shelton is president and CEO of STRATA.