Impact of the 2022 Midterm Elections on the US Advertising Landscape
Unprecedented ad spending in this mid-term election will have broader impact across the advertising ecosystem, increasing demand and driving up rates in multiple areas. However, understanding the timing of when the bulk of election dollars will be spent, and where the key battleground geographies are located, will help provide guidance to non-political advertisers on how to plan for the inevitable rise in ad spend ahead.
2022 Midterm Election Advertising Overview
Political ad spend has increased massively in each of the last several campaign cycles, and this trend shows no sign of abating in 2022. The 2020 election cycle was the first to exceed $9B in spending, a 244% increase over 2016, and the 2022 cycle is expected to reach these same heights and top $9B again—even without a presidential race at the top of the ticket.
Where is all that money going?
Political spending in broadcast and cable TV is projected to be $5.9B, down from $6.9B in 2020. Meanwhile, digital spending is expected to exceed $3B, increasing at least $500M from 2020.
Voters’ diversifying screen consumption habits have created huge growth in CTV spending, an area of increasing importance to political advertisers. Political CTV ad spend is expected to top $1.5B this year—nearly 50% of total digital video spend.
TIP: With digital ad spend at an all-time high, advertisers should look to understand peak timeframes and channels for the election in order to anticipate, or avoid, increased rates and competition.
TIP: Flexibility in targeting and/or timing should help to minimize the effects of competition with political messaging, which could be particularly acute in video and connected TV.
TIP: In 2018 and 2020, Basis data shows up to a 35% increase for video rates during late Q3/early Q4, with the increase in display much smaller at ~5%. These increases were felt most in ads that ran in specific geographies with high relevancy for the election.
Anything I should know about timing?
While some state primary elections will have localized impact, these are typically very brief, with non-political advertisers only noticing an effect for a week or two. Only 19 primaries remain after July: Arizona, Kansas, Missouri, Michigan, Washington (8/2), Tennessee (8/4), Connecticut, Minnesota, Vermont, Wisconsin (8/9), Hawaii (8/13), Alaska, Wyoming (8/16), Florida (8/23), Massachusetts (9/6), Delaware, New Hampshire, Rhode Island (9/13), and Louisiana (11/8).
Basis data shows that in previous elections, spend is heavily concentrated in the last few weeks before the November general election: in 2020, 55% of digital ad budgets were spent in the last 30 days, and 25% of digital ad budgets were spent in the last 10 days before Election Day.
Expect the most significant impact on inventory and rates in the 5-6 weeks leading up to Election Day, November 8.
Let’s talk key battleground states
Five states—Pennsylvania, Florida, Georgia, Arizona, and California—will see a combined $3.2B in political spend, making up an astonishing one-third of the total anticipated spending.
Additionally, states with multiple overlapping competitive races—especially senatorial and gubernatorial—are expected to see spending over $100M, including Michigan, Wisconsin, North Carolina, Illinois, New Hampshire, Minnesota, Nevada, Maryland, Ohio, New York and Texas.
TIP: Localized campaigns scheduled to run in geographies with significant competitive races should proceed with the most caution. National advertisers running with broad targeting will likely not feel the effects to the same level, but they may want to consider avoiding (or re-allocating) key election timing if it is not a priority.
TIP: The impact of $100M+ spent in a small state like New Hampshire will likely be felt to a greater degree than, say, $250M+ spent in New York.
What are the anticipated impacts by channel?
Programmatic: In 2020, 63% of political dollars flowing through Basis went to programmatic ads. Basis forecasts the impact of 2022 election ad spending on programmatic demand primarily in the final 4-6 weeks leading up to the election, with rates expected to increase by 15-20% or more during this timeframe—particularly in key battleground states and video inventory (especially CTV).
Social: With many social platforms restricting or limiting political advertising, marketers will inevitably see increased demand and rates on Meta’s family of apps (Facebook, Instagram, WhatsApp, and Messenger) due to their large scale, targeting capabilities, and overall performance.
Search: Google/Alphabet prohibits political advertisers from targeting voters outside of geography, age, gender, and contextual alignments across search, display, and YouTube. However, despite these regulations, the high visibility of these platforms means there is not likely to be a decrease in ad spend on any of those properties. Due to the specificity of keywords that media buyers can apply within paid search, the increased traffic should not affect rates for advertisers outside of the political sphere.
Site Direct: Site-direct investment has decreased steadily since 2012, largely due to programmatic technology and the availability of high-quality targeting at scale. However, there are site direct partners that have seen significant ad dollars for political messaging—Hulu, for example, was a highly sought after partner in 2020 and is expected to be a big player again this fall. Local advertisers should anticipate inventory constraints in the final two months across key battleground states, but national advertisers are unlikely to see much impact given the scale of these platforms (Hulu, Pandora, YouTube, etc.)
How about the impact by format?
Video is the preferred format for political messaging due to its storytelling ability and emotional appeal. TV will continue to have the bulk share of ad spend in 2022, with broadcast networks and cable TV expected to account for 50% and 14% of total political ad spend, respectively. Online video is expected to be the primary format within digital, with connected TV spend by political advertisers projected to hit $1.5B in 2022.
Political campaigns began to meaningfully experiment with CTV in 2018 and 2020, but because the technology was still nascent, there wasn't enough inventory for CTV to become a large portion of campaign budgets. That’s all changed after the pandemic-driven streaming and adtech booms of the past two years. With nearly 84% of US households now consuming streaming video through a connected TV device at least once a month, political advertisers have recognized the necessity of reaching voters via this channel.
TIP: Whether through direct partnerships (i.e. Hulu, Roku) or programmatically in the open exchange and private marketplace deals, non-political advertisers running in battleground states or key congressional districts should expect to feel increased competition and demand. Basis recommends padding desktop and mobile video bids by 10-15% and further cushioning CTV by 15-30% as Election Day draws nearer.
What can I do to plan ahead?
While national advertisers may only feel minor effects from the ramp of political ad spend, local campaigns running in battleground states or key congressional districts should expect some degree of impact in the six weeks between Sept 27-Nov 8. As many publishers (including Google, Twitter, LinkedIn, Amazon, Pinterest and TikTok) have prohibited or restricted political messaging, advertisers will lean heavily on programmatic, Meta, and premium CTV vendors.
TIP: To help minimize the adverse effects on your ad efforts:
Be aware of how your campaign may overlap with key geographies and voting periods.
Pad your programmatic bids (specifically video and CTV) by 15-30% in October and early November—especially for localized campaigns in battleground states. Bid shading technology can ensure you are winning bids at the optimal price.
Where possible, utilize first party data (CRM/DMP/CDP) to focus and differentiate your campaigns and avoid getting lost in the blizzard of political messaging.
Got any other tips as we race toward the 2022 midterms?