We've got a few more weeks before the 2024 elections are decided (I hope). Political campaigns are pumping billions into ad platforms, and you're seeing an impact. Are the two connected? Let’s dig into how both parties’ ad dollars, channels, and battleground states are shaking things up.
How Much Are They Spending? (Spoiler: A Lot)
The 2024 elections are expected to break records, with the projected spend crossing the $12 billion mark, about 30% more than 2020 (which was the largest on record).
According to recent data, both parties are allocating $4 billion for digital ads alone. Is your super optimized short video being buried under a pile of campaign ads featuring a guy in a hard hat or someone kissing a baby?
I keep seeing headlines like the one below from journalists that they are, and I keeping hearing from CMO's at large advertisers that performance is down YoY, but are the two really connected?
In the last week alone, the Harris campaign spent $3.5 million with Meta on some 6,352 ads from Sept. 30 to October 6, according to Newsweek. In comparison, the Trump campaign spent just $890,415 on 642 ads during the same period.
Firstly, that's a shit load of ads (going to do a followup on how we can learn from campaigns and their A/B testing), but is that actually that much spend versus a brand like Temu?
Will This Affect Your CPMs? No, But Watch the Ripple Effect
Meta generates about $40 billion in ad revenue per quarter. So the $3.5 million from the Harris campaign is a drop in the digital ad ocean. That said for smaller markets this could actually be impactful.
If you live in Pennsylvania, you’ve probably noticed a barrage of political ads, and if you’re an advertiser there, you might actually feel the heat. With Pennsylvania widely considered the most decisive state in the 2024 presidential election, it's no surprise the Keystone State tops the charts with $137 million in presidential ad reservations. The Philadelphia market alone accounts for $125 million, making it the top market in the country. Democrats are spending roughly 25% more than Republicans on presidential ads in Philly. For local advertisers, this could mean higher CPMs or even difficulty securing TV spots as political campaigns dominate the airwaves, but if you are running TikTok ads in California this should have no direct impact.
So is all the noise from marketers about the election a major cop out?
Not necessarily: What may be impact your ads more is the ripple effect of uncertainty. The month before an election tends to get...let’s just say, dicey. People are on edge, unsure of future policies, economic shifts, or tax changes. This anxiety trickles down to their wallets, and suddenly, that purchase they were ready to make last month doesn’t seem so urgent anymore.
During uncertain times—like right before an election—people hold off on making big purchases. They’re unsure what the future holds. Couple that with record levels of household debt and high credit card balances, many are cautious about spending on non-essential items. So while your CPMs may stay relatively steady, it wouldn't be surprising for some brands if your CVR is being impacted.
At Blueberry, we've seen an increase in involuntary churn due to credit card failures. Shopify also recently reported on this for their clients.
Don't throw in the towel yet, post election could be rosier
After the election, a few things will probably happen:
- Holiday Season: It’s typically a boon for brands. People are in the mood to spend on gifts, deals, and holiday joy.
- Clarity: People know who the next president is and start feeling a little better about spending. There’s a psychological calm that comes with certainty, even if it’s the certainty that half the country is upset.
- Meta and Google teams have been asserting over and over again that theAI strategies they've been building which caused pain in the first half of the year may finally be working.
And here’s the kicker: If 2024 plays out like past election cycles, we might even see a round of money printing or stimulus checks. Nothing gets consumers ready to hit "Buy Now" faster than free money.
Buckle up—it’s going to be one heck of a Q4.
