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The Political Ad Wars: Navigating a Turbulant Airscape

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Billions will be spent on political TV advertising this year - creating challenges for nonpolitical advertisers who want to stand out from the clutter and ensure their messages are still heard. Our webinar, which was held on Tuesday, March 22nd took an in-depth look at lessons learned from political advertising trends in recent election seasons and the 2016 primaries, guidance on where and when disruption is most likely to occur in 2016, political ad messaging obstacles advertisers may want to avoid, including negative ads and controversial topics, and more. Contact info-us@kantarmedia.com to request a full recording of this webinar today!

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The Political Ad Wars: Navigating a Turbulant Airscape

  1. 1. © Kantar Media The Political Ad Wars Navigating a Turbulent Airscape With CRO Jon Swallen & SVP of Political Advertising Elizabeth Wilner
  2. 2. Huge overlap between competitive presidential and statewide markets 2016 Market Madness 8 of 10 presidential battlegrounds have a competitive Senate race, governor’s race, or both: • Colorado • Florida • Nevada • New Hampshire • North Carolina • Ohio • Pennsylvania • Wisconsin
  3. 3. Trifecta States Trifecta States New Hampshire (Boston) Toss-Up Senate race + open, Toss- Up governor’s race (Sept primary) North Carolina Lean R Senate race + Toss-Up governor’s race Ohio Lean R Senate race + open, Toss-Up WV governor’s race (southern Ohio)
  4. 4. Twofer States Twofer States Colorado (+ Albuquerque) Lean D Senate race Florida Toss-Up Senate race (two open Aug 30 primaries) Iowa Likely R Senate race (SCOTUS) Nevada Toss-Up Senate Race Pennsylvania Lean R Senate race (contested D April 26 primary) Wisconsin Toss-Up Senate race Virginia (DC) Likely D but open Senate Race in MD
  5. 5. Hot Downballot Markets Hot Markets Los Angeles, San Francisco, Sacto Senate race + ballot measures St. Louis Likely R Senate race + Toss-Up governor’s race Indianapolis Likely R but open Senate race (contested R May 3 primary)
  6. 6. A Trump Ticket Could… Nudge several battleground/historically Dem states to GOP due to white male populations in Iowa, Michigan, New Hampshire, Ohio, Pennsylvania, Wisconsin Nudge some battleground/historically GOP states to Democrats due to minority populations in Arizona, Colorado, Georgia, Nevada Bolster GOP efforts to keep the Senate, ratcheting up advertising in competitive Senate races
  7. 7. Summer/Fall 2016 Outlook
  8. 8. By the week of November 30, 2015 Political’s share of ad time is approaching 10% November 30, 2015 Case study: Ramp-up to Iowa and New Hampshire Political share of ad time averages 6% during summer months in IOWA broadcast markets
  9. 9. And starts growing rapidly the start of the new year January 4, 2016: nearly 20%
  10. 10. January 11, 2016: 17% to 25%
  11. 11. January 18, 2016: 25% to 37%
  12. 12. January 25, 2016 With political shares reaching 53% in CEDAR RAPIDS the week before the Iowa caucuses
  13. 13. Across these IOWA markets, Political’s share of total ad time was 45% leading up to the caucuses A 38 percentage-point increase in just 8 weeks
  14. 14. September 14, 2015 By mid-September 2015, political share of total ad time in MANCHESTER, NH is already at 20%
  15. 15. November 30, 2015 And by the end of November, political share of total ad time in MANCHESTER, NH is approaching 30%
  16. 16. January 4, 2016 With political activity on Boston, MA stations growing at a slower pace Going into the new year, political share of total ad time continues to grow in MANCHESTER, NH
  17. 17. February 1, 2016 Political share of total ad time in MANCHESTER, NH reaches 56% in the week leading up to the state primary
  18. 18. Boston broadcast stations follow a similar pattern, though activity is lower Political’s share of total ad time on WMUR, Boston stations peaks at 56% and 15%
  19. 19. Promos & PSAs Medical Svcs. & Supplies Automotive All other paid ads Telecom Retail IOWA: As political’s share increases, key non-political categories see share plunge
  20. 20. Promos & PSAs Medical Svcs. & Supplies Automotive All other paid ads Telecom Retail NEW HAMPSHIRE: As political’s share increases, key non-political categories see share plunge
  21. 21. Messaging Muddle Top messages in advertising, by spend: Presidential: 1. Foreign policy/terrorism 2. Healthcare 3. Social issues (women's issues, abortion, civil rights, gay marriage, drugs) 4. Taxes (corporate loopholes) US Senate: 1. Energy/environment 2. Jobs/unemployment 3. Budget/government spending 4. Environment: Global warming
  22. 22. Harsh Climate for Companies “Wall Street, drug companies, insurance companies, big oil companies” “I’ll never eat Oreos again”
  23. 23. Brand Bashing Unprecedented attacks on individual brands for being on the wrong side of regular people: • Goldman Sachs • Johnson Controls (getting help from auto bailout, then offshoring) • McDermott (offshoring) • Medtronic (offshoring) • Tyco (offshoring) • Valeant (predatory pricing) • Weatherford (offshoring)
  24. 24. A Busy Political Calendar Ahead 24 states w/primaries or caucuses during Q2 November elections • President • 33 US Senate seats • 435 US House seats • 12 state governors • Down ballot races Supreme Court Justice nomination
  25. 25. A Busy Political Calendar Ahead 24 states w/primaries or caucuses during Q2 November elections • President • 33 US Senate seats • 435 US House seats • 12 state governors • Down ballot races Supreme Court Justice nomination House Senate Governor Toss Up 22 5 4 Leaning 18 4 -- Ratings As of 3/18/16 Source: The cook Political Report
  26. 26. The Effect of Political Ad Volume On Other Categories & Advertisers
  27. 27. A Disruptive Force Political advertising disrupts spot TV marketplaces Finite inventory – a zero sum game Impact on other ad categories? Who gets displaced? Timing? Adaptive strategies
  28. 28. Spot TV Markets Analyzed
  29. 29. WK M T W TH F SA SU WK M T W TH F SA SU 26 25 26 27 28 29 30 1 J 1 2 3 4 5 6 7 8 J 27 2 3 4 5 6 7 8 A 2 9 10 11 12 13 14 15 U 28 9 10 11 12 13 14 15 N 3 16 17 18 19 20 21 22 L 29 16 17 18 19 20 21 22 4 23 24 25 26 27 28 29 30 23 24 25 26 27 28 29 F 5 30 31 1 2 3 4 5 A 31 30 31 1 2 3 4 5 E 6 6 7 8 9 10 11 12 U 32 6 7 8 9 10 11 12 B 7 13 14 15 16 17 18 19 G 33 13 14 15 16 17 18 19 8 20 21 22 23 24 25 26 34 20 21 22 23 24 25 26 M 9 27 28 29 1 2 3 4 35 27 28 29 30 31 1 2 A 10 5 6 7 8 9 10 11 S 36 3 4 5 6 7 8 9 R 11 12 13 14 15 16 17 18 E 37 10 11 12 13 14 15 16 12 19 20 21 22 23 24 25 P 38 17 18 19 20 21 22 23 13 26 27 28 29 30 31 1 39 24 25 26 27 28 29 30 A 14 2 3 4 5 6 7 8 O 40 1 2 3 4 5 6 7 P 15 9 10 11 12 13 14 15 C 41 8 9 10 11 12 13 14 R 16 16 17 18 19 20 21 22 T 42 15 16 17 18 19 20 21 17 23 24 25 26 27 28 29 43 22 23 24 25 26 27 28 M 18 30 1 2 3 4 5 6 N 44 29 30 31 1 2 3 4 A 19 7 8 9 10 11 12 13 O Y 20 14 15 16 17 18 19 20 V 21 21 22 23 24 25 26 27 J 22 28 29 30 31 1 2 3 U 23 4 5 6 7 8 9 10 N 24 11 12 13 14 15 16 17 25 18 19 20 21 22 23 24 2012 2012 WK M T W TH F SA SU WK M T W TH F SA SU J 1 30 31 1 2 3 4 5 J 27 30 1 2 3 4 5 6 A 2 6 7 8 9 10 11 12 U 28 7 8 9 10 11 12 13 N 3 13 14 15 16 17 18 19 L 29 14 15 16 17 18 19 20 4 20 21 22 23 24 25 26 30 21 22 23 24 25 26 27 F 5 27 28 29 30 31 1 2 A 31 28 29 30 31 1 2 3 E 6 3 4 5 6 7 8 9 U 32 4 5 6 7 8 9 10 B 7 10 11 12 13 14 15 16 G 33 11 12 13 14 15 16 17 8 17 18 19 20 21 22 23 34 18 19 20 21 22 23 24 9 24 25 26 27 28 1 2 35 25 26 27 28 29 30 31 M 10 3 4 5 6 7 8 9 S 36 1 2 3 4 5 6 7 A 11 10 11 12 13 14 15 16 E 37 8 9 10 11 12 13 14 R 12 17 18 19 20 21 22 23 P 38 15 16 17 18 19 20 21 13 24 25 26 27 28 29 30 39 22 23 24 25 26 27 28 A 14 31 1 2 3 4 5 6 O 40 29 30 1 2 3 4 5 P 15 7 8 9 10 11 12 13 C 41 6 7 8 9 10 11 12 R 16 14 15 16 17 18 19 20 T 42 13 14 15 16 17 18 19 17 21 22 23 24 25 26 27 43 20 21 22 23 24 25 26 M 18 28 29 30 1 2 3 4 N 44 27 28 29 30 31 1 2 A 19 5 6 7 8 9 10 11 O Y 20 12 13 14 15 16 17 18 V 21 19 20 21 22 23 24 25 22 26 27 28 29 30 31 1 J 23 2 3 4 5 6 7 8 U 24 9 10 11 12 13 14 15 N 25 16 17 18 19 20 21 22 26 23 24 25 26 27 28 29 2014 2014
  30. 30. 20% 10% 6% 8% 23% 21% 19% 15% 0% 5% 10% 15% 20% 25% Wash DC Raleigh Philadelphia Miami Las Vegas Gr Rapids Denver Cincinnatti Political Share Of Ad Time: 2012 Wks 1-30 Wks 31-44 5% 10% 5% 7% 8% 23% 21% 9% 0% 5% 10% 15% 20% 25% Wash DC Raleigh Philadelphia Miami Las Vegas Gr Rapids Denver Cincinnatti Political Share Of Ad Time: 2014 Wks 1-30 Wks 31-44 Note: Weeks 31-44 cover the period from August 1 to Election Day
  31. 31. Major Spot TV Ad Categories Politics Auto Retail Telecom Medical Services Restaurants All Other Paid Promos/PSAs
  32. 32. Category Share of Market Ad Time Politics Share Pol- itics Auto Retail Tele- com Medical Svcs Restaur- ants All Other Paid Ads Promo /PSAs Total < 2% 0.5% 13.0% 10.4% 8.3% 4.4% 3.8% 39.7% 20.0% 100.0% 2-5% 4.2% 11.7% 9.7% 8.8% 3.8% 4.4% 38.1% 19.3% 100.0% 5-10% 10-15% 15-25% >25% Analytic Method – Category Share of Spot TV Ad Time How To Read: In weeks when political share of total market ad time is less than 2%, auto category share of ad time averages 13.0%
  33. 33. Promos & PSAs Medical Svcs. & Supplies Automotive All other paid ads Telecom Retail Political % Share Ratio of TV Ad Time: Political vs Other Categories 2012 & 2014, Weeks 1-44, All 8 Markets Combined
  34. 34. Category Share Ratio of Market Ad Time Politics Share Auto Retail Tele- com Medical Svcs Restaur- ants All Other Paid Ads Promo/ PSAs < 2% 13.0% 10.4% 8.3% 4.4% 3.8% 39.7% 20.0% Ratio 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2-5% .90 .93 1.06 .86 1.16 .96 .98 5-10% 10-15% 15-25% >25% Category Share Ratio Reveals The Rate of Erosion How To Read: In weeks when political share of total market ad time is between 2% and 5%, auto category share of ad time falls to 90% of its baseline norm
  35. 35. Promos & PSAs Medical Svcs. & Supplies Automotive All other paid ads Telecom Retail Share Ratio of TV Ad Time: Political vs Other Categories 2012 & 2014, Weeks 1-44, All 8 Markets Combined
  36. 36. Fewer Auto Ads….But Steady # of Auto Advertisers Market: Las Vegas Period: 4th week of each month in 2014 Insights: • Auto advertising is cyclical and peaks at end of each month • As auto category share begins to decline, the # of auto advertisers holds steady • Auto advertisers are staying on air, but buying less time 0 15 30 45 60 0% 10% 20% 30% 40% 3/24 4/21 5/26 6/23 7/21 8/25 9/22 10/20 10/27 #ofAutoAdvertisers %ShareofAdTime Political Share Auto Share # of Auto Advertisers
  37. 37. Telecom – Similar Pattern Market: Denver Period: 2014 Category: Telecom July 28 – Labor Day • Category share = 7% • 21-23 advertisers/wk • Avg advertiser runs 72 :30s per week Sept 22 - Election Day • Category share = 3% • 16-20 advertisers/wk • Avg advertiser runs 37 :30s per week 0 5 10 15 20 25 0% 8% 16% 24% 32% 40% #ofTelecomAdvertisers %ShareofAdTime Political Share Telecom Share # of Telecom Advertisers
  38. 38. Programming Preferences
  39. 39. Auto & Political Compete For Local News Avails 40% 50% 60% 70% 80% Jan Feb Mar Apr May Jun Jul Aug Sep Oct % Of Category Ad Time in Local News: 2014 POLITICAL AUTO • Cincinnati • Denver • Grand Rapids • Las Vegas • Miami • Philadelphia • Raleigh • Washington, DC
  40. 40. The preference for news programming leads political advertisers to network affiliate stations Market Total # of Stations Monitored % of All Ad Time on A/C/F/N % of Political Ad Time on A/C/F/N Cincinnati 6 66% 93% Denver 10 49% 73% Grand Rapids 6 98% 100% Las Vegas 8 58% 92% Miami 13 41% 63% Philadelphia 7 58% 90% Raleigh 7 60% 90% Washington DC 9 52% 92% • Period: Jan-Oct ‘14 • Spanish-language news programming is also targeted by political advertisers
  41. 41. ADPATIVE STRATEGIES • Displaced TV advertisers can be a sales opportunity for other media • Some TV advertisers shift weight to other media, some don’t 0 25 50 75 100 0% 10% 20% 30% 40% #:30PerWk PoliticalTVShare Political TV Share # Spot TV :30s # Radio :30s Papa John’s Pizza – Denver – Sept/Oct 2014 When TV weight is reduced, Local Radio support is increased
  42. 42. ADPATIVE STRATEGIES • Displaced TV advertisers can be a sales opportunity for other media • Some TV advertisers shift weight to other media, some don’t Marshall’s– Las Vegas – Sept/Oct 2014 Marshall’s had no measured activity in Las Vegas in either Radio, Newspaper or Digital during Sept/Oct 2014 0 5 10 15 20 25 0% 7% 14% 21% 28% 35% #:30PerWk PolitTVShare Political TV Share # Spot TV :30s
  43. 43. Source of Business Analysis The analytic approach that we’ve used can: • Be applied to individual markets and stations • Compare periods of heavy vs. light political activity • Identify ‘at risk’ categories and advertisers • For non-TV media, assess opportunities to gain business from TV advertisers during peak political periods
  44. 44. Questions? Jon Swallen, Chief Research Officer Jon.Swallen@Kantarmedia.com 212.991.6110 Elizabeth Wilner, Senior Vice President for Political Advertising Elizabeth.Wilner@Kantar.com 202.238.3730

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