The 2020 U.S. election was outshined and has doubled the prior presidential election spending by more than 100%. Even with a pandemic-stricken economy, the political money shoots up from $6.5 billion to almost $14.5 billion. By far the most expensive election in American history and the most used social advertising and digital platforms for political ads.
During the closing months of the federal election, the lockdown placed many challenges on all candidacy levels. As a result, political candidates have adjusted their strategies to disseminate their campaign message to their target audiences and intensify public engagement. Technology has been the driver of most election activities —video conferencing for fundraising, online streaming for virtual rallies, and most of all, social advertising.
Why do political advertisers choose Google and Facebook?
Based on Statista.com, most of the political advertising spending has gone up during the 2020 election cycle. While all platforms have seen substantial ad spend growth, the digital platform has seen the most significant leap, 146% jump. 2018 political ad spending on digital was $.74 billion and rose $1.82 billion last year. In contrast, the broadcast platform saw the least but decent increase at a 41% climb.
A study by TechForCampaigns.com displayed the breakdown of the last election cycle’s political campaign ad spending made on digital platforms, in which almost 11% of the total ad budget went to Facebook and Google. Besides being two of the most used social media apps, as of writing, other platforms turn their heads away from political ads – Twitter, Linkedin, and Tiktok.
Facebook and Google reach billions of audiences across North America, offering high-quality inventory, and are known for multiple popular apps and ad-supported sites. For example, political advertisements set to run on Facebook can influence voters on Facebook Messenger, Facebook Gaming, Facebook Watch, Instagram, and Whatsapp. At the same time, Google offers massive eyes on search engines, YouTube, and Connected TV.
Political Campaign’s Variable Impact with Social Advertising
In one of the articles of CNBC, it stated that “Ads from politicians and campaigns accounted for at least 3% of Facebook’s estimated third-quarter U.S. revenue, according to data from Facebook’s ad library and the Center for Responsive Politics.” So does political ad spending disrupt the auction of commercial social advertising?
During the peak of the pre-election period last 2020, our data shows that YouTube’s CPV’s increased by 11% from Q2’s performance. With the help of Strike Social proprietary tool, Campaign Lab, our team has seen at least 15% improvement on YouTube CPV compared to the peak of the election cycle last year.
So how will the advertising auction react now that a large portion of the political money is not present? Similar to the 2020 Q4, media costs will continue to climb as the holiday season begins. As most industries are on track to their pre-pandemic growth, these verticals are expected to rebound from last year’s performance. Holiday advertising spending produced by these brands is expected to replace last year’s election campaign advertising money. Our team expects 2021 Q4 to be 10-15% higher than Q3 and possibly increase a notch higher to close the holiday season.
2020 Political Advertising, 2021 Industry Recovery
The 2020 election cycle was in the right place at the right time. Post-election year, digital ad spending continues to rise, and Dentsu forecasts a 15% digital ad spend growth to end the year. Multiple factors drive advertising spending: economic development, return of in-person events, industry recovery, return to normal business operations, and expansion of advertising channels. As political advertising slows down this year, it will continue to evolve and utilize advertising technology in the future. But commercial advertising will continue to have a life of its own outside the election advertising spending cycle.