On the Campaign Trail to Higher Advertising Rates

Categories : Procurement Goals | Set Strategy | Assess Opportunity | Save Money Published on : Mar 31 2016

By: ProcurementIQ Analyst, Syed Ali Khan

After three Super Tuesdays and 20 prime-time debates, 23 major party candidates have been whittled down to 5, and the United States is in the thick of the presidential campaign season. As November approaches and the remaining candidates make their pitch to the American people, political advertising will ramp up.  According to Borrell Associates, a market research company focusing on media, political advertising is forecast to hit a record $11.4 billion in 2016, about half of which will be spent on the presidential election. With political advertising expected to reach new historic levels, demand for advertising space and airtime will strengthen and spur higher prices.

Super Spending on Ads Pushing Up Rates
Like businesses, campaigns want to stay atop of Americans’ minds. That means spending on everything from mailers and stickers to large television, radio and digital advertising buys. However, campaigns are just one of many political entities that are spending on advertising. Political action committees, including independent expenditure-only committees (Super PACs), interest groups, trade associations and others are also buying advertisement time to help shift the conversation in favor of their preferred candidate or cause. This increase in demand will put upward pressure on prices for advertising. ProcurementIQ estimates a 2.0% increase in television advertising prices this year, and a 1.1% increase in radio advertising prices. Buyers can expect larger spikes in price as the campaign swings through states, which will temporarily increase demand in local media markets.  The growing volume of space for online advertising, including that of low-priced mobile advertising, will result in falling prices for this medium in 2016; however, individual websites that cater to key voting demographics will experience increased demand for advertising that will push their individual rates upward.

Competing with Campaign Demand

When competing with political campaigns for ad space, nonpolitical businesses and organizations should revise their advertising strategy. First, businesses should budget additional funds for advertising when buying in media markets that are impacted by political campaigns and when purchasing premium ad space online. Also, buyers should plan for their ad buys far in advance, which will allow buyers to be nimble and flexible with where and when they showcase their brand. Lastly, businesses should consider expanding and optimizing their use of free and low-cost advertising, particularly social media, which can be used to increase consumer interaction and obtain free media coverage.



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