Record U.S. Election Spending in 2024 Will Generate New AdTech Innovations
Estimates for US political ad spending in 2024 are enormous and record-breaking. Experts forecast anywhere from $10 to $16 billion in total spend across channels, which would shatter the record created during the last election cycle.
There are a number of reasons for the high forecasts. First, inflation and market competition have increased the cost of ad spending. Certain popular channels like CTV have heavy demand and command high prices. Second, the competition between the Democrats and Republicans is fierce, and they’ll be spending big to reach undecided voters and solidify their bases. Third, spending is not limited to the presidential race. Regional and local political races will also take advantage of advertising channels, using targeting to fine-tune messaging for key audiences.
Advertising technology has an interesting relationship with political cycles. Famously, Barack Obama’s campaign used social media, at the time an emerging platform. They were able to reach their audiences with more personalized, targeted content on a channel that many audiences were just starting to embrace. This created a major advantage.
In 2020, digital advertising grew in importance, accounting for nearly a quarter of total spend. Much of that spend was highly targeted, relying on third party cookies to reach key audiences.
This year promises to deliver even more change. While third-party cookie targeting is decreasing, advertisers have many other opportunities to reach their audiences. It’s likely that political advertisers will take emerging technologies and use them for creative campaigns. AI has advanced contextual advertising, for example. AI-based contextual advertising can “read” the content on a page to recognize different nuances in content, such as positive or negative sentiment. Commerce-based advertising can help political advertisers raise money much more seamlessly. Audiences can donate with the tap of their finger on social media and more.
Political advertisers will also find themselves with a different channel mix than in 2020. CTV is rapidly replacing broadcast media, which was their top spending category in 2020. Today, political advertisers are looking at a wider array of social media platforms (it looks like Joe Biden will embrace TikTok with others sure to follow) and generative AI influencing search results. All of these shifts will require smart strategies, testing and fine tuning.
Media Companies Can Unlock Opportunities for Political Advertisers
Clearly, media companies are poised for a record advertising revenue year if they position themselves well. TV and digital channels will be in the highest demand, and media companies will need to balance Upfront planning with surges in demand that could happen throughout the year. Forecasting and yield management will be key to maximizing revenue and providing opportunities for political advertisers without turning away advertisers from other sectors.
There are a number of different technologies and processes that media companies can tap into to ensure that they’re set up for success and that they’re helping political advertisers reach their audiences as effectively as possible. Here are a few that media companies will need to have:
Offer flexible products and delivery - Media companies will likely need to be on their toes throughout 2024. Political advertisers might commit heavily to traditional media early on but want to pivot to digital or CTV mid-campaign. They might have one audience target at first but want to expand to include new audiences if the campaigns are working well. Media companies need to have an infrastructure that’s agile, with a centralized product catalog to provide winning proposals and seamless order management to take advantage of these tactical moves throughout the year.
Accept new types of targeting - With the deprecation of the cookie, third-party cookie targeting isn’t what it was in 2020. Political advertisers will likely test identity solutions, AI contextual solutions, and more. Media companies also have their own audience insights, which they can package for political buyers. The more flexible a media company is to accept different forms of targeting and reach key audiences, the better.
Provide transparent measurement - Political advertisers are a savvy bunch - digital and CTV are more measurable than broadcast, and that will be a big appeal. They’ll be measuring and adjusting throughout the year and will want real-time reporting and accurate insights. Media companies with agile reporting will be able to partner with political advertisers and adjust faster than if they have manual reporting or aren’t able to share insights.
The name of the game in 2024 is flexibility and agility. With more choices than ever before and more ways to measure campaigns, media companies will need to partner closely with political advertisers to deliver value and capture new spending throughout the year.
[Editor's note: This is a contributed article from Operative. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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