Political video advertising has arrived. All signs point to the 2010 midterm election season being the first in which political candidate campaigns, issue advocacy groups, and independent expenditure groups are using online video advertising in a serious way. More money is coming out of TV ad budgets, ad prices are rising, and some say high demand for geo-targeted in-stream ad inventory is resulting in a lack of inventory.
Republican Senate hopeful Ron Johnson of Wisconsin is running in-banner video ads, as is Democrat Dan Malloy, candidate for governor in Connecticut. Wisconsin gubernatorial hopeful, Democrat Tom Barrett, and candidate for Ohio governor, Republican John Kasich, are running in-stream video ads. Defeat 1098, a campaign fighting a tax-related ballot measure in Washington state is also running in-stream video, along with Business Industry Political Action Committee (BIPAC), a group endorsing mainly Republicans for election this year.
Political consultants and video ad sellers say they're seeing a surge in online video advertising from political campaigns, particularly in recent weeks. In-banner video ad firm Mixpo says 35 political campaigns are currently running through its system. Spending on video-enabled display ads has "totally gone up," in the last four or five weeks, said Mixpo CEO Anupam Gupta, who told ClickZ News one gubernatorial campaign buying "thousands and thousands" of gross rating points on television asked Friday to extend its video ad buy by a "significant amount." Throughout the election, around 75 political advertisers have run around 100 campaigns with Mixpo, said Gupta.
Television advertising is integral to what's taking place in online video. As desirable TV inventory runs out - particularly in areas where several election races are taking place - political advertisers are moving their television ads online, streaming them before and during video content on YouTube, portals, and news sites, and inside display units.
Michael Beach, partner at Republican digital agency, Targeted Victory, told ClickZ News recently that the company's political clients have spent between 65 and 75 percent of their online budgets on video ads in the past. Now, he said, "the campaigns that get it" are spending around 85 percent of those budgets on video ads.
Spending on video ads by political campaigns is "continuing to increase," said Bryan Gernert, CEO of Resonate Networks, which targets in-stream and in-banner video ads for political and public affairs clients as well as corporate advertisers. "Even existing campaigns that weren't running video are now incorporating in-banner video," he said, adding that around 35 or 40 percent of the company's political clients are running video ads now.
According to Google, the number of candidate campaigns and advocacy groups running in-stream ad campaigns on YouTube has quadrupled since July and doubled in the last month. Andrew Roos, account executive, AdWords, Google elections and issue advocacy, said he's seen campaigns in almost every battleground state running in-stream video spots on YouTube recently.
"This is when campaigns are getting their messages out wherever they can," he said. The Barrett and Kasich campaigns are both running YouTube in-stream ads currently, as is BiPAC. At this late stage in the game, campaigns are focused on persuasion and getting voters to the polls. For persuasion, television is king.
As online video buying accelerates, some advertisers are unable to obtain the amount of geographically-targeted inventory they want. One consultant who spoke with ClickZ on background said he and other colleagues have faced a dearth of in-stream ad inventory on YouTube, even in markets without big races.
"A lot of our final get-out-the-vote effort was based online," said the consultant, who planned to run in-stream persuasion ads to undecided voters for a congressional campaign client through YouTube, but shifted that strategy after he found that Google could not offer the amount of inventory in the particular DMA he needed to target. He said he's seen prices for minimum bids for YouTube in-stream CPMs rise from around $8 to between $20 and $25 recently because so many advertisers are vying for the same inventory.
Google said that because its system is auction-based, there is always available inventory to advertisers willing to compete with other bidders. Yet, in-stream video impressions are tied to video views, which are finite, especially when it comes to reaching people within a targeted location in a specific time period. Geo-targeted pre-roll inventory is always scarce for any kind of advertiser, political or corporate, said Michael Bassik, SVP, digital at Global Strategy Group.
The consultant who agreed to speak on condition of anonymity said he worries that the lack of in-stream inventory could backfire on campaigns that have finally achieved buy-in for online video advertising from budget decision-makers. "It's troubling," he said, because online video proponents have argued that TV and Web video used in parallel provides better results. Now that campaigns are getting serious about in-stream video advertising, the lack of inventory could scare them off if they conclude that "this medium is not all it's cracked up to be."
Less available in-stream inventory is driving advertisers to in-banner video, where inventory availability is no problem. "There's limited inventory on pre-roll, so more and more campaigns are using in-banner,” said Resonate's Gernert, adding that spending on in-banner video has been "very small" in the past but is growing "much more."
Some say the video money is coming out of TV budgets rather than digital budgets. "This is part of the communications plan right now," said Roos. "They are starting to think about how to get the video collateral they produce out to more people."
Mixpo's Gupta said, "If I look at the last few weeks and look at the spread of budgets, the bigger budgets have certainly come from the TV [media agencies] versus the online agencies."
For Bassik, it's not a matter of budget transfer. "I don't think this is a matter of budget being siphoned from one medium and transferred to another medium," he said.
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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