A roundup of key factors that drove online advertising in 2010.
As digital politicos look back on the 2010 campaigns, consensus emerged around key trends such as Facebook ads, sophisticated targeting, and video.
The most common refrain however is not new: "They didn't spend enough."
Yet while online marketing budgets were smaller than many had hoped for, the difference between the last round of midterms in 2006 and this year's is staggering. As far as most digital political consultants, online media firms, and others are concerned, there was no 2006.
"There's absolutely no comparison," said Kyle Roberts, president of Smart Media Group, the firm that handled digital ad buys for Meg Whitman's failed campaign for California Governor.
In a whirlwind of post-election conversations with around a dozen people close to this year's digital campaigns, they all said much the same thing. Online efforts in 2006 were "a joke" compared to 2010, said one. "Night and day," said another. In 2006, Google - the most popular online ad seller for political advertisers - didn't even have an elections and advocacy team.
It's tough to compare a presidential race to a midterm election season, but 2008 had much more in common with 2010 when it came to paid digital media efforts. No one disputes that '08 was the benchmark for online campaigns, and everyone ClickZ spoke with said that this year they saw budget allocations for Web ads and related efforts grow since then.
"We're not going to hear anymore that 'online is only for presidentials,'" said Chris Nolan, co-founder of Spot-on.com, a political content syndicator and online media services firm.
As digital consultants lamented weak online spending (even Meg Whitman's enormous $3 million online ad expenditure amounted to only around 3 percent of the overall ad budget), many were pleased to see that online advertising had finally made it into the budget from the start - a milestone in itself. And, some online campaigns garnered extra large chunks of those budgets. According to one Democratic digital consultant, the Democratic National Committee's big online voter mobilization effort - costing $2.5 million - encompassed around 30 percent of the total ad budget for the campaign.
The Big Trends in 2010
1. Budgets Small but Growing
Most House candidate campaigns that used online ad formats like search, display, and video ads spent around 5 percent of their ad budgets on those efforts. Party committees and outside groups running independent expenditure campaigns tended to spend more. Spending by statewides - meaning senatorial and gubernatorial candidate campaigns - varied too much to peg, according to sources. Google suggests that campaigns should put 10 percent of their ad budgets towards online and mobile ads, while some consultants push for as much as 20 percent. Still, even though media consultants and sellers hoped for bigger budget allocations than they saw this year, most expect increases the next time around.
2. Outside Groups Fueled More Online Ad Spending
New and old organizations took advantage of The U.S. Supreme Court's Citizens United ruling and related rule changes that reduced restrictions on how they could raise money and spend it. Groups like the Chamber of Commerce, Club for Growth, American Crossroads , The League of Conservation Voters and Patriot Majority PAC funneled new cash to the Web through independent expenditures, according to several sources.
"Citizens United is loosening up budgets. We're starting to see the beginnings of an independent expenditure infrastructure," suggested Nolan.
Peter Pasi, EVP of digital agency Emotive, said about 25 percent of the online ad spending that went through his firm came from IE groups including American Crossroads and Club for Growth Action.
"[IEs] really did have an impact," said one Democratic digital ad consultant, adding, "money came out of nowhere."
3. Facebook Ads Find a New Market
There's no question that 2010 was the first big election year for Facebook advertising. Because nearly every campaign created a Facebook page, several took the next step of running Facebook display ads to promote their pages in the hopes of garnering more likes - and by extension a bigger audience for their political messages and fundraising appeals.
"Facebook advertising is going to be what Google advertising was four years ago and absolutely a mainstay of campaigns in the future," said Pete Snyder, CEO of New Media Strategies, which handled online work for Missouri Republican Roy Blunt's Senate campaign.
4. Smarter Targeting
Several sources pointed to more sophisticated ad targeting this election cycle. Firms like AOL and CampaignGrid pushed voter data matching and targeting services this year. And more and more campaigns customized messaging and targeted ads based on a variety of online and offline data. In opposition to Whitman's run for California Governor, The California Labor Federation used online and offline data modeling to target swing voters and residents of ultra-progressive districts with custom messages. Around 40 different ad creatives from the labor group featured targeted messages in Spanish, Chinese, Korean, and English.
According to Matthew Dybwad, a partner with Craft Media Digital, the Republican House candidates the shop worked with "did very district-targeted stuff that was aimed at raising awareness and trying to identify activists."
5. Video Ads Go Mainstream
According to Andrew Roos, account executive, AdWords, Google elections and issue advocacy, "almost 500" of the political advertisers that bought on Google used some kind of video ad formats. As desirable TV inventory ran out in the final days before the election, particularly in areas where several election races are taking place, political advertisers shifted TV dollars and ads online, streaming them before and during video content on YouTube, portals, and news sites, and inside display units.
6. More Persuasion Ads
"Video is what's going to persuade voters," said one media consultant. While online ads have historically been used for fundraising and signups by most political advertisers, several sources said that started to change this time around. Their political clients began to use online ads for persuasion and other branding-related goals in 2010. "In 2008 it was all about fundraising. People were doing persuasion this cycle," said Pasi. A glance at ClickZ's 2010 election display ad gallery shows that, while many campaigns were still looking for click-throughs, signups and donations, several ads were used purely to persuade voters for or against candidates.
7. Tight Display and Video Inventory
Who knew display ad inventory could run out? In states with multiple statewide races or simply locales where many advertisers vied to reach the same geographic targets, even seemingly plentiful display ad inventory was scarce according to many sources. One media consultant in California – where Senate and Governor campaigns as well as several ballot initiative campaigns fought for the same inventory - said available inventory dwindled as election day neared. In some popular California DMAs such as Los Angeles, traditional media brand sites were sold out, and in the Santa Barbara area, display inventory was tough to uncover.
There wasn't a ton of inventory and prices were very expensive, said one consultant handling online ad buys for large Democratic campaigns. In some cases, campaigns just didn’t plan ahead and wanted to snap up inventory when they came into last-minute money. "I can't tell you how many campaigns called me on election day and asked 'can you do this?'" said one consultant.
The get-out-the-vote ad surge tactic, popularized since the ’08 election and promoted heavily by Google (which calls it the "network blast"), also helped drive more advertisers online in the final days, and in the case of Google's display and YouTube in-stream ad inventory, drove up prices. The tactic involves bombarding a key geographic area with ads during a short time window of one to three days.
One consultant who spoke with ClickZ on background said he and other colleagues faced a dearth of in-stream ad inventory on YouTube, even in markets without big races. He said he saw prices for minimum bids for YouTube in-stream CPMs rise from around $8 to between $20 and $25 in late October because so many advertisers are vying for the same inventory.
Follow ClickZPolitics on Twitter at @ClickZPolitics
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.
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