Digital, Radio Push Up Political Ad Spend Prediction

The 2016 election is going to be even more expensive than expected for campaigns and causes, according to the latest update by ad spending monitor Borrell Associates. Borrell boosted its political ad spending estimates by 3.1% in March, raising spending for the year by $357 million, to a projected total of $11.7 billion before Americans go to the polls on November 8. Surprisingly, the upward revision in expected ad spending is not coming from the presidential race, where spending projections were actually lowered by 1.7% thanks to GOP candidate Donald Trump's unprecedented use of "earned media." The report notes that for every dollar the Trump campaign has spent, it has received $189.80 in free media coverage, way above Hillary Clinton's $26.60 in free coverage for every dollar spent. The presidential race still leads ad spending, but state assemblies, local offices and local ballot issues are a close second, expected to contribute just over $1.7 billion each. The media distribution of ad budget growth is shifting, however. With broadcast TV inventory clogged by campaigns and PACs, half of the increased political ad spending will go to digital and radio, and local media in general, per the report. Meanwhile, direct mail and telemarketing spending are also seen grow as part of the "ground game" to recruit new voters. Based on current trends, Borrell foresees a very different political ad landscape by 2020, with a decline in broadcast TV spending and growth in digital outreach. To download the "2016 U.S. Political Ad Spending Update" with state-by-state estimates and breakouts of spending by races for President, Senate, House, Governor, Attorney General, State Assemblies, county/local elections and ballot issues, go to https://www.borrellassociates.com/industry-papers/papers/2016-u-s-political-ad-spending-update-march-16-detail

Campaigns Fueled by Varied Funding Burn Rates

Campaign fundraisers face a balancing act when it comes to "burn rate"--the proportion of cash intake to cash outlay in the same time period. Too high and they risk coming up short later; too low and they fail to invest enough for future success. Here are a few benchmarks from current presidential campaigns courtesy of a recent article by The Atlantic magazine. Ben Carson's fundraising raked in an impressive $20.8 million in the third quarter, but he spent 69% of it on efforts to raise more money, relying heavily on traditional direct mail and telemarketing, which have the advantage of growing grassroots support but the disadvantage of being more expensive than digital channels. Democratic front runner Hillary Clinton had an even higher 86% burn rate, but she spent mainly on media buys, payroll and online advertising--outlay aimed at campaign infrastructure and future viability. In contrast to both Carson and Clinton, socialist Bernie Sanders is frugal, with a burn rate under 45%. He spent mainly on digital consulting and advertising, relying on ActBlue, an online platform for donations to liberal causes, for fundraising. ActBlue is a tool that gets donors by "gamifying" giving at low cost (less than 4% commission). Unfortunately for Carson and other GOP candidates like Ted Cruz, who also has a high burn rate per the article, there isn't a Republican equivalent for online donations. For more, especially about Carson's strategy, read http://www.theatlantic.com/politics/archive/2015/10/where-is-ben-carsons-money-going/410839/