2022 was a record-breaking year for political spending at the state and local levels. Candidates and PACs (political action committees) spent $7.8 billion. The 2024 cycle could crush those numbers, which means the race to win political ad dollars is coming. Is your station prepared? It all starts with the right technology.
Let’s look at 2024 projections, strategies to capture more political ad spending and why you need to prep now with the right sales platform.
2024 Projections and What’s on the Ballot
BIA Advisory Services projects that the local ad spend for 2024 in politics will reach $6.58 billion. Of that number, here’s the breakdown:
Local TV is still at the top, at almost half! Digital picks up a bit, boosted mainly by OTT growth. The 2022 cycle saw OTT increase while social media declined. Social spending decreased due to platform restrictions or bans on this type of advertising.
With TV in the driver’s seat, your medium will be a priority for buyers. Being able to deliver the right mix of programming and optimizing the rates will propel your revenue in 2024. So, what’s at stake next year?
- Presidential election: Some buys will be national, but swing states may see an influx of ad buys.
- Senate: 33 seats are up, with many incumbents already fundraising and campaigning.
- House of Representatives: 435 seats will be in play in 2023, and these elections have specific geographical targets.
- Gubernatorial: 11 governorships will lead state-specific races.
Let’s look at getting your political ad dollar playbook together.
Your Political Advertising Playbook
First, it’s a good idea to look back at 2022 and determine where you succeeded and where gaps remain. You do have some limitations in selling political ad spots when candidates are the buyers.
The FCC’s Political Programming staff oversees the rules and regulations related to political campaign advertising across all broadcast mediums. Multiple statutes guide their work, applying only to direct advertising from a “legally qualified candidate.” The rules address pricing, “class” dayparts and providing reasonable access. You can read more about the rules by downloading our white paper, A Simple Guide to Dynamic Pricing and Political Advertising for Media Companies.
There are no FCC mandates for PACs buying spots. Beyond compliance factors, here are some things you should consider for your playbook:
- Look at historical spending from candidates back on the ballot, and analyze their patterns. This will help as you begin new conversations.
- Determine the “tightest” races in your market. There are several resources for this from political experts. The most competitive campaigns are likely to spend more money.
- Create a plan for issue-related spending from PACs and groups, which will bring in about $76 million in 2023, with $22 million for broadcast.
- Research the PACs and special interests that will put their dollars toward key races.
- Ready an omnichannel plan for advertisers to include traditional TV spots and OTT/CTV.
- Emphasize how you deliver advertising in multiple channels to simplify their media buying.
Along with an updated playbook, the other critical component is your sales technology.
Be Ready for 2024 Now
There is a good chance that 2024 spending will start this year, and the first primaries are in early March. Thus, the timeline is getting shorter! You don’t want to walk into the 2024 cycle unprepared for the demand or unable to maximize your rates compliantly.
You’ll need a few critical components in your TV sales platform.
Dynamic pricing is the real-time component of yield management. Yield management is a pricing strategy that considers supply and demand to define pricing. Airlines, hotels, retail and other industries leverage it to offer the “best” price.
The same principle applies to your inventory. It requires access to real-time avails and uses other data like timelines to automate pricing. Powerful algorithms generate the rate, and you can include ceilings, floors and discount tolerances.
It’s the best way to optimize every buy. Dynamic pricing is usable for both candidate and PAC buys. The candidate buys are a little different since they have guidelines about offering the lowest unit price. If you don’t use dynamic pricing, your lowest unit price is a static number that never changes. However, if you deploy the technology now and use it consistently, you have a data-backed lowest unit price, with an audit trail of all historical pricing. You’ll remain compliant and be able to boost the lowest unit price.
Pay for Performance
Pay for performance is the process of delivering impressions (performance) agreed upon between the station and advertiser or agency. In this framework, you submit the ratings, and the advertiser agrees to them with a guaranteed percentage of impressions.
The impressions are not daypart or programming specific. Your customers can still require restrictions, like not running ads near competitors, appropriateness of the programming and what percentages they’ll agree to for less desirable spots.
This modern way of selling, which national TV has adopted, allows for makeups to occur in flight, virtually eliminating the burdensome tasks around makegoods and credits. Makeups can also run on digital O&O inventory, although buyers can negotiate the percentage of linear and digital.
Offering this option makes TV advertising more reliable, which political candidates and PACs will appreciate. It could be a differentiator for your station.
Converged TV is a result of fragmentation in the viewing ecosystem. It combines linear TV, OTT/CTV, digital video and O&O. It’s an attractive option for many advertisers, including political ones. It’s omnichannel and supports frequency optimization and reaching all types of viewers, from traditional subscribers to cord-cutters.
Having technology that enables this type of buying could be huge for 2024 political ad dollars. Look for solutions that automate and consolidate the selling of all your inventory. It’s less work for sellers and more options for advertisers.
These three concepts will be critical for your 2024 revenue. Now is the time to lay down the technological framework for these strategies. Marketron REV can propel your success! REV maximizes revenue, streamlines selling, informs decisions with data and integrates systems.
Get started with a consultation with our experts. They’ll evaluate your current framework and identify how REV can help. View a demo of how REV works, and receive a personalized ROI calculator to get an accurate projection of returns and savings.
REV is the revolution the media industry needs! Book time with us today to join the revolution.