Even political ad spending estimates are deflating. Despite the voter griping about excessive political advertising and talk about Barack Obama's fundraising records, media research firm Borrell Associates significantly lowered its 2008 political ad spending projections -- including online spending.
About $17.7 million is expected to flow online from political advertisers, including candidate campaigns, PACs, 527 groups and party committees. At the start of the year, Borrell predicted online political ad spending would hit around $20 million. Indeed, at the time, other outfits with varying research methods forecasted between $73 million and $110 million would be spent online this election season.
Borrell has also greatly reduced its total political ad spending estimate for all media from $4.8 billion to $2.27 billion, following additional data available as of Q2 2008. Of that, less than 1 percent will go towards the Web, including standard display ads, paid search, e-mail and streaming video.
"We found that most of it was search," said Kip Cassino, Borrell's VP of research. That tracks with findings from ClickZ's own research into online ad spending by the presidential campaigns. According to Federal Election Commission reports analyzed by ClickZ News, nearly 60 percent of Obama's online ad dollars went towards Google as of August -- more than $3 million. By the end of her race for the Democratic nomination, Hillary Clinton's camp spent 57 percent of its online ad money on Google. John McCain's campaign does not break out specific online media expenditures in FEC reports, though all along his campaign has been a prolific paid search advertiser.
Still, production costs pushed Web video spending beyond paid search, which involves lower non-media buying costs. By the election, Borrell expects streaming audio and video to account for 42 percent of all online ad spending, about $7.4 million. Paid search should make up 34 percent, or $6 million. Only $2.5 million or 14 percent will be spent on standard display ad formats, predicts Borrell. E-mail will take a 10 percent share, $1.8 million.
Borrell also looked at the amount of money spent on local markets coming from sources outside the region, as well as inside. Far more will be derived from inside markets. While 72 percent or $12.7 million of online ad money is expected to come from within, just 28 percent -- $5 million -- will be spent by outside organizations. Typically, those are PACs, 527 or issue advocacy groups, or party committees.
The National Republican Senatorial Committee, for instance, has run display advertising, according to Nielsen Online. Those ads, seen on nationally-read conservative sites like National Review Online, Townhall.com and Newsmax in July and August, were attack ads against Obama and Al Franken, Democratic candidate for U.S. Senator from Minnesota.
Several statewide and local candidate campaigns have bought online display ads this election, including campaigns for Republican Senator from Kentucky Mitch McConnell, Democratic U.S. Senate candidate Kay Hagan, and Charlie Dent, U.S. Congressman from Pennsylvania's 15th District.
Web video production spending also is expected to grab the largest portion of online ad spending by inside market advertisers --- 58 percent. Search, e-mail and standard ads will take 17 percent, 14 percent and 11 percent, respectively. According to Cassino, Borrell cannot measure revenue streams from outside market political advertisers.
"If there were a lot of it going on at the national level, we'd be able to measure it," he said, adding, "There's a good deal more of this activity that's going on at a localized level." Also, he stressed, "The fact that it's generated inside the market does not mean it's not for a national campaign."
Cassino expects this election will influence upcoming campaigns to boost online ad spending in the next major wave of elections in 2010. "What we'll find is the Senate and Gubernatorial campaigns...are going to start to spend as much as the presidential campaigns did this year," he said. And, in turn, local campaigns will graduate to bigger online ad budgets as well.
"They'll move up to what the regional and statewide campaigns did this cycle."
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
March 19, 2014