WARNING: AD SQUEEZE AHEAD

June 9, 2016

Let the political games begin.  

Now that Hillary Clinton and Donald Trump are their parties’ presumptive standard bearers, everyone expects one of the most grueling, bitter and expensive campaign periods in U.S. history. Multibillions of dollars of political advertising are certain to be spent in a very compressed time period. Some analysts have predicted total political campaign ad expenditures this year to reach or exceed $5 billion, by far the largest number to date. Particularly in key battleground states with major media markets, a potential for a significant squeeze on advertising space availability is highly likely.

Already, Sen. Rob Portman (R-OH) is reported to have reserved $15 million in advertising for his reelection campaign – the largest sum of money committed so far to a single Senate race in this year's election cycle. Portman’s campaign plans to spend $14 million on statewide television advertising and $1 million on YouTube programming. The National Republican Senatorial Committee (NRSC) has also reserved about $6 million to spend in Ohio, while the Democratic Senatorial Campaign Committee (DSCC) has committed $10 million to aid Portman’s opponent, former Ohio Governor Ted Strickland. Super PACs have pledged an additional $9.5 million for Strickland’s campaign.

The situation in Ohio is just the tip of the iceberg. Prolific GOP campaign donors Charles and David Koch have pledged to spend nearly $900 million, to be funneled primarily into efforts to maintain Republican control of the House and Senate.

Campaign expenditures are not being focused just on traditional media. A recent Ad Age article, for example, noted that the Republican National Committee has reserved an unprecedented $150 million dollars in digital video ads to be run across the country. Online political advertising expenditures are now predicted to surge to almost $1 billion dollars this year. Adding to these pressures, an unusually large number of well-financed state ballot initiatives are also vying for ad space. A recent analysis of state campaign finance data found that $125 million has been raised so far this year for these initiatives, a 74 percent increase from the amount raised at this point in the 2014 election cycle.

The largest political dollars, of course, are to be found at the Presidential level where Hillary Clinton and groups supporting her campaign reportedly have already collected more than $289 million, much of it to be directed to advertising, and a far broader fundraising effort now is being launched. Donald Trump, who to this point has primarily self-financed his campaign, has announced that he plans to raise at least $1.5 billion to support his general election effort.  

Finally, only to congest the ad marketplace further, the Summer Olympic Games will be viewable for seventeen straight days in August. Back in March, NBCUniversal stated that it had surpassed $1 billion in national advertising sales for the Rio Olympics, four months earlier than the 2012 Games. Seth Winter, the executive vice president for advertising sales at the NBC Sports Group, confidently predicted that, “We continue to expect to set the Olympic record for national ad sales.”

Therefore, until the election season is over in early November, companies that need to make major advertising campaign roll-outs or face other heavy advertising demands during this period should be particularly alert to the dollars and ad squeeze they will constantly be facing.


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