The Challenges and Promises of the Digital Political Explosion

Yes, the screen got bigger. But your TV ad budget needs to get smaller.

Although I’ve had a personally enjoyable holiday season, the real Christmas extravaganza for my occupational field has been the news that U.S. digital political advertising has grown exponentially and will no doubt exceed $2 billion in growth through the coming presidential election cycle. This is the culmination of a number of converging trends, from innovation and streamlining in the development of apps to the discovery by political campaigns and interest groups of the efficiency and promise of analytic-based digital outreach. As we look in awe at this growth, here are some initial observations about the jump.

First, it’s a unique and unprecedented jump. We can best see the magnitude of this evolution by looking at three years: 2014, when $250 million was spent on online campaign ads; 2017, when special elections and midterm campaigning pushed digital to $500 million, and 2018, where it’s reached $1.8 billion. The 2018 figures are imprecise for obvious reasons, and firms are debating the upper end of the estimates, one saying it’s a total of $1.8 billion and another putting forward a more modest $900 million. But even so, compare this to the $250 million total spent on online campaign ads in 2014. You don’t see that kind of exponential increase in other kinds of political spending. The budget shift will be felt in 2019, as TV and mail budgets see unprecedented declines as a portion of overall campaign spending.

Second, over time, more campaigns and groups will realize that the digital approach yields more precision than other forms of advertising. For example, speaking of political spending, some evidence suggests that the digital revolution is mainly geared towards presidential candidates, while candidates for the Senate and House of Representatives blew their money on TV ads. (The recent shock headline that “half the internet is fake” pales compared to the assumptions about who actually sees TV ads.) Open Secrets reports that in the 2018 cycle, Senate candidates spent about $150 million on TV ads, with their House counterparts dropping $49 million on TV. This was several times more than those candidates spent on digital and online advertising — the amount they spent on Facebook was low in comparison.

But TV ads are a lot more expensive per unit and per reach. More importantly, TV ads are inefficient and growth in digital advertising will bear this out. Imagine you wanted to give water to a thirsty person standing in a crowd. Do you find a way to hand that person a glass of water just for them, or do you dump 5000 gallons of water onto the whole crowd, hoping some of it will reach your thirsty target? Even though emails have an objectively low open rate, those targets are initially gleaned as participants in the political process. Better analytics yield better targeting. Television advertising may be directed at certain times, or during certain shows, but have no filter for discerning between participants and nonparticipants in political life. And if you thought TV ads were expensive, try TV microtargeting data.

Third, Republicans have been ahead in this game, but that’s turning around. They outspent Democrats on digital in previous cycles and had been keeping momentum in these midterms until a “late onslaught of digital spending by a slew of outside progressive groups during the closing weeks of the midterms narrowed Republicans’ spending advantage on Google from 1.65-to-1 down to 1.18.” Democratic and progressive groups outspent Republicans more than 2-to-1 on Facebook in October.

Finally, the industry will have to keep up with the campaign finance and compliance regulations that phone and email append vendors have mastered. On top of all their other recent troubles, both Facebook and Google are in trouble in Washington State, where campaign finance laws and proactive oversight have stung Google for failure to maintain records of election ads, and Facebook’s small reforms in record-keeping were not enough to satisfy Washington’s strict transparency laws (which have been in place since 1972). The state requires that advertisers “disclose the name and address of a given ad’s purchaser, the ad’s cost, and the total number of impressions that an ad received, as well as demographic information about the audiences who saw it.” Last March, the Brennan Center reported that the Federal Elections Commission was seeking to address the “giant regulatory loopholes” certain entities exploited in 2016. The gist of those proposals concern stronger disclosure rules, a turn that will create compliance needs currently not really accounted for in the digital industry.

Digital outreach changes every game it engages, and politics is no exception. What John Avlon pointed out eight years ago is even more true today: “Younger generations have grown up with a multiplicity of choice on every front, which can be tailored to suit their individual beliefs. Politics is the last place where we are supposed to be satisfied with a choice between Brand A and Brand B.” This means that static media will eventually be left behind in political campaigns. It also implies that voters will keep demanding alternatives to traditional politics and that digital political communication might just facilitate such alternatives.