What The Coming 30,000 Local Political Campaigns Can Teach Retailers About Geo-Targeting

Location-advertising represents new territory for state and local races, says Borrell’s Corey Elliot.

EARLY-VOTINGWhile the electorate may still be in “spectacle mode” in terms of telling political pollsters who appeals to them 15 months before the voting booths open, media planners and buyers, agencies, and ad sellers are already looking very seriously at all the possible twists and turns that could happen before Election Day 2016.

Setting aside the various candidates’ positions and gaffes, media spending consultancy Borrell Associates is offering its sober assessment of how local political ad spending across an expected 30,000 races is shaping up across all advertising channels. (Download the report here.)

A Major, Local Shift

On the whole, Borrell is forecasting political ad expenditures to rise more than 10 percent between the two presidential election years — an 80 percent jump from 2008. Most of that rise will be driven by digital ad spending, with radio, cable, and out-of-home making far smaller contributions. The latter will be boosted by increased use of digital billboards.

In total dollar figures, political advertising will command $16. 5 billion in spending, Borrell EVP Kip Cassino writes in the report. About half of that will be devoted to local elections.

Drilling down, the big news is that digital media will surpass the $1 billion spending threshold in politics for the first time, according to Borrell. Still, that’s just 9.5 percent of all political ad spending. In comparison, most advertising categories put between 30- to 50 percent of their dollars in digital. But in the context of what usually happens in big campaign years, the move to digital will be felt significantly at the local level.

total online political digital Borrell

Big Data’s Ballot

Aside from the usual higher rates for local ad placements based on greater demand by campaigns — which typically results in reduced supply of inventory available for other kinds of marketing — the 2016 political races will signal an important shift in the way consumer data is used and in how spending is ultimately allocated.

When the dust settles, there will be plenty of lessons for national-to-local enterprises and regional and local SMBs. The biggest implications will come in the management of SEO and geo-targeting, says Corey Elliot, Borrell’s director of research.

“Being late to the digital party, Political as a category has a unique advantage,” Elliott says. “Basically, it gets to step into the world of geo-targeting — not to mention other quickly developing areas, like programmatic, with fresh eyes.”

In other words, politicos won’t have to learn, relearn, and then unlearn, the lessons marketers that have had to go through for the past decade. Where local brands had to master email marketing, run-of-site display ads, followed by search, before discovering behavioral targeting, search, social, and the range of programmatic options in between, state and local campaign operations will be able to dive in fresh, Elliot says, unencumbered by legacy advertising structures.

The reason is that Big Data and the analytics and insights of how, where, and when to target consumers has leveled the playing field between large, exceedingly well-funded national efforts and smaller marketers.

All these relatively new methods are an “ideal use for some political campaigns that want to make sure not to waste precious campaign funds,” Elliot says. “Think of all the smaller, more local campaigns who could really benefit from this ability.”

Voting With Digital Dollars

At more than $2 billion, local broadcast still makes up the biggest portion of the political ad pie, Borrell’s report states. And newspapers, cable, radio, and telemarketing maintain healthy shares as well. Meanwhile, digital’s share leaps from less than 1 percent to 8 percent.

To some, that may suggest that digital, particularly mobile and the personalization and location-based targeting that goes with it, is still inconsequential. But the movement that’s happening under the feet of local buyers and sellers over this expensive campaign season will determine the way future campaigns are won and lost (or, for retailers, the way things will be bought and sold).

“This is the year digital spending moves from asterisk to contender as a political advertising media choice,” Cassino writes. “From 2016, its share will only grow − mostly at the expense of broadcast TV. 2016 will also be the last year there’s any breathing space between political ad spending on media calendars. From here on out, current forecasts show higher rates of spending to continue every year through the end of the decade.”

Social media advertising, whether in the form of earned media, paid, media, or through loyalty/rewards programs, will also begin to show its impact on campaign spending, Borrell states.

“By 2016, social media sites will absorb more than half of all online/digital political ad spending − a more than tenfold increase since 2012,” the report says. “More than $1 in every $5 spent will target mobile devices, a 12-fold increase over 2012 levels, totaling an 18.9 share-point shift since 2008. Paid search spending will see a share point decline, as SEO, roiling churn, and vicious price competition take their toll on what was once the premier online political ad category.”

Next year, for the first time, online digital political advertising will cost campaigners more than $1 billion — almost a dime of every dollar spent. By 2020, when the next presidential elections are held, its share will likely approach that of broadcast TV.

No matter which individual candidates take pubic office of the 2016 elections, the path to winning in politics will hold the same for brick-and-mortar businesses. Those that seek to retreat to the comfort of “the way things used be” will, at best, be able to hold on to that declining concept.

But it will be temporary. Local political campaigns, like local businesses, will either attempt to lead its competitors in getting online-to-offline constituents to pull the lever for its candidate, or will resist until they find the race is already lost.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.