Advertisers Face Higher Ad Prices Due To Midterm Elections
Midterm election spending is causing TV and streaming ad prices to rise, forcing advertisers to choose between higher costs or alternative options. This surge in ad prices may impact advertisers' holiday plans.
Original reporting · digiday.com
Original: “Midterm political spending throws spanner into regional advertiser holiday plans”
Read “Midterm political spending throws spanner into regional advertiser holiday plans” at Digiday →How this was written. GMS Agency Desk wrote this article with a language model from Digiday’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from Digiday’s report
- Midterm election spending is causing TV and streaming ad prices to rise, forcing advertisers to make difficult choices.
- Local and regional advertisers are being disproportionately affected by the surge in ad prices.
- Advertisers are exploring alternative options, such as fleeing to premium streaming networks or stopping advertising altogether.
- National advertisers have more flexibility to ignore states or DMAs with inflated ad costs.
- Political ad spending is expected to continue until the election is over, impacting advertisers' holiday plans.
Political media spending ahead of the midterm elections has led to increased TV and streaming ad prices for regular advertisers, according to Digiday.
Advertisers operating in battleground states like Texas, Wisconsin, and Michigan are being forced to choose between paying higher prices, fleeing to premium streaming networks, or stopping advertising altogether during the crucial fourth quarter.
About $8.2 billion of the total $12 billion expected to be spent on midterm elections will go towards TV or CTV, causing price inflation and a rise in CPMs for brands, Digiday reported.
Political ad spending has had a significant impact on local and regional advertisers, with linear CPMs rising 10-15% and some programming commanding price increases as high as 30-50% in recent weeks.
Streaming prices have also been affected, with average premium CTV and streaming CPMs rising from $34-35 to $43, depending on the location targeted.
National advertisers can choose to ignore states or DMAs with inflated ad costs, but regional or local advertisers don't have the same flexibility, as they are focused on specific audiences and geo-targeting.
Local and regional TV providers often institute 'pre-emption' clauses in contracts, allowing them to bump regular advertisers for political ones if a campaign or PAC is willing to pay more.
Advertisers are fleeing to perceived safe havens like Netflix, Amazon Prime Video, and Disney+, which don't allow political advertising, but this is pushing up prices on these platforms.
The issue has meant media planners and buyers must spend longer searching for useful ad inventory, and it's slowed campaign rollouts as clients ask agencies for additional reviews of creative.
Political ad dollars are also flowing towards social platforms and YouTube, with a 20% increase in the average YouTube CPM in recent weeks.
Questions and answers
Why are TV and streaming ad prices rising?
Midterm election spending is causing price inflation and a rise in CPMs for brands.
How are local and regional advertisers being affected?
They are being forced to choose between paying higher prices, fleeing to premium streaming networks, or stopping advertising altogether.
What are advertisers doing in response to the surge in ad prices?
They are exploring alternative options, such as fleeing to premium streaming networks or stopping advertising altogether, and some are choosing to buy national inventory instead of local.
