Left, Vice President Kamala Harris and former President Donald Trump
Reuters
Consumers who have cut the cord in recent years are finding there’s one thing on linear TV they can’t escape: political ads.
With the US presidential election less than 70 days away, campaigns are ramping up from streaming services such as Roku and Hulu to such an extent that connected TVs are seeing more ad spending than Internet platforms such as Facebook and Google.
That’s according to data provided to CNBC by political ad analytics firm AdImpact, which began tracking the connected television (CTV) category in 2022. AdImpact predicted the CTV market generated about $236 million in ad sales related to this year’s presidential race through Aug. 23. The digital category brought in just $235 million over the same period, AdImpact said, with Facebook and Google accounting for nearly all.
“CTV is where there’s more engagement,” said Jaime Vasil Winkelfoos, the group vice president of candidates and causes for ad tech firm Basis Technologies. “When voters say they’re watching TV, they’re not saying ‘I’m watching a show.’
This trend, Winkelfoos said, is “important for political campaigns when allocating budgets.”
However, while more money is flowing into streaming services, the overall amount is shrinking from traditional broadcast TV.
AdImpact currently projects that total political ad spending for the 2024 election cycle will reach $10.7 billion. Broadcast will account for about half, followed by CTV at about 14% and digital close to 12%. According to a report last week by eMarketerCTV’s share of spending this election will increase to 13% from 2.7% in the last presidential cycle.
The show grossed an estimated $473 million from early January through August 23. That’s down from $875 million in the same time period in 2020, highlighting CTV’s rapid rise.
Meanwhile, total election-related spending on Facebook and Google has more than halved since 2020, when political ads on those two platforms reached $480 million between January 1 and August 23. The sharp drop is mainly because this election featured a competitive Democratic Primary with one particular candidate – Mike Bloomberg – spending a huge amount of money on ads.
“This drove direct advertising and benefited Meta and Google specifically,” said Eric Haggstrom, vice president of business intelligence at Advertiser Perceptions.
Streaming services have not only become increasingly popular for consumers in recent years, but they have also opened up new ad-based services. Netflixfor example, it first introduced its ad-supported subscription plan in late 2022 as part of a broader effort to boost revenue amid slowing subscriber growth. Netflix does not yet accept political ads.
Winkelfoos said there is now more ad inventory available on CTV than ever before, which coincides with market growth. One nuance to AdImpact’s data is that Google’s YouTube video service is in the digital category, while YouTube TV is part of CTV.
AdImpact noted that it is providing estimates of the amount of political ad spending on CTV because those platforms are not subject to Federal Communications Commission rules that require traditional TV operators to report certain political ad information. Facebook and Google, like the CTV platforms, are not subject to FCC rules, but do disclose some political ad data.
A Meta spokesman declined to comment, but pointed to remarks made by CFO Susan Li in February, when she said political advertising “doesn’t materially drive revenue for us.”
“Even during the last US presidential election cycle in 2020, the government and politics vertical was not among our top 10 verticals either globally or in the US,” Lee said at the time.
For CTV users, especially in swing states, the ad blitz is about to hit hard. Robin Porter, head of politics at ad agency LoopMe, said 60% to 70% of spending typically comes after Labor Day, which is this Monday.
Prospective voters can expect to see plenty of ads for Vice President Kamala Harris. Earlier this month, the Democratic nominee announced plans to spend $370 million on a fall advertising spree. The campaign reserved $200 million worth of ad space across the stream platforms such as Hulu, Roku and Pandora as part of its strategy to reach US consumers.
“There’s more upfront spending, especially in CTV, to secure the inventory upfront, even compared to 2022,” Porter said.
In the state of Georgia, Porter said there has been a big push from both presidential campaigns to secure ad space after Labor Day on both CTV and linear. With its 16 electoral votes, Georgia is considered a critical battleground in the race to secure the 270 electoral votes needed to win the election.
Winkelfoos said the Harris campaign’s announcement of its advertising plans, which landed just days before this month’s Democratic National Convention, was huge for the industry.
“We didn’t have this big national moment associated with big spending until Kamala,” Winkelfoos said.
Disclosure: Comcast, which owns CNBC parent NBCUniversal, co-owns Hulu.
