These ought to be great days for anyone who sells campaign-season TV advertising. With a big assist from the Supreme Court—which in 2010’s Citizens United ruling declared that corporations and labor unions could spend as much as they pleased on political spots—the market has never been better.
Local TV stations made $20 billion in advertising revenue in 2014, and nearly $1 billion went to televised political ads, according to a TVB analysis of Kantar Media data. Car dealerships and restaurant chains may be fickle advertisers, but politicians spent last year anteing up.
And that was without a presidential election to motivate deep-pocketed partisans to fork over their money: The research firm Borrell Associates expects political-ad spending in all 2016 races to rise by 21 percent from the last presidential election cycle.
In a media environment in which many local broadcasters have seen their budgets fall, these are huge numbers. But TV salespeople out celebrating shouldn’t send top-shelf liquor to John Roberts’s table. My advice: Bank some of those commissions, because they may start to fade.
You don’t have to be a media savant to know that the current model of TV advertising is expensive and hard to tailor to niche audiences. Digital advertising, on the other hand, is cheap and lets you zoom in on exactly the people you want to reach.
Last year, for instance, Coca-Cola used Facebook’s targeting capabilities to roll out cuts of its multilingual 2014 “It’s Beautiful” ad to Hispanics, gays, and veterans.
So far, though, corporations have been more likely than candidates to take their promotional budgets online. That same Borrell Associates report that projected a rise in political-ad spending said digital ads would account for about 8 percent of all political advertising in 2016.
That seems like a “so what” number until you look at several trend lines that ought to scare the daylights out of TV-station owners:
- Digital advertising accounted for 0.2 percent of all political-ad spending in 2010. That means in four years its share of advertising has grown by 1,825 percent. Borrell estimates TV’s hunk of the cheddar will fall by 5.3 percent between 2012 and 2016.
- The number of people who watch local TV was up slightly in 2014, but it’s still down from 2007.
- According to data collected by media analyst Mary Meeker, the time Americans spend with TV is relatively flat, about 4.3 hours daily, while the time they spend with mobile devices has rocketed from 0.4 hours a day in 2010 to 2.8 hours a day this year.
- Finally, while mobile devices command 24 percent of Americans’ screen time, they attract just 8 percent of all advertising dollars.
There’s also been a shift in the nature of advertising that dovetails with the Obama-era shift in political mobilization—a change that in both cases involves deep dives into data and narrow targeting of specific demographics.
Rather than popping up on the TV playing in the kitchen (or on your browser), a new and compelling generation of social-media ads offers political advertisers access to a far more intimate screen—your phone’s.
To assess this purported threat, it helps to look at early action in two states that often figure in political David-and-Goliath stories.
In April, Hillary Clinton held a roundtable discussion about small business in Norwalk, Iowa. It was her first public event after she announced her candidacy for President. The night before Clinton got to town, some Norwalk residents encountered an ad by the conservative America Rising PAC that asked whether Americans “should blindly trust” the former Secretary of State. The ad caught the attention of the Des Moines Register—not only was it the PAC’s first 2016-cycle expenditure targeting Clinton, but the buy took place entirely on Facebook and Google.
“This is a way to get in front of more folks,” says Colin Reed, America Rising’s executive director. The video had done well in the Washington area when his group released it a week before, he says, and America Rising—which doesn’t ever place TV ads—thought it might do well in Iowa and New Hampshire, where Clinton headed the following week.
“If you’re going to buy TV in New Hampshire, you have to buy in Boston, which is extraordinarily expensive,” Reed says. Candidates in another swing state, New Jersey, face a similar barrier: They have to purchase air time in New York and Philadelphia, both expensive markets. The local-TV nightmare is that the new rules of social advertising prompt pols simply to skip the expense.
In April, a few dozen journalists showed up at Facebook’s Washington office for a whiteboard session designed to show off the social network’s ad capabilities.
“For a few hundred dollars, you can do serious, impactful work,” vice president of ad technology Brian Boland said.
Exhibit A: a cheap, efficient campaign created by Senator John Cornyn during his reelection campaign last year. As a Republican in Texas, Cornyn had only one significant electoral task: to beat back a primary challenge from his right. Using a list of potential voters uploaded to Facebook, his campaign was able to deliver bespoke ads directly to gun-rights supporters. It got to them with a Facebook tool called Custom Audiences, in which an advertiser uploads an e-mail list and Facebook matches it with its records. (Advertisers can’t access Facebook data directly.)
Cornyn saw his online donors double and his e-mail list grow by 2½ times. He reached a million Republican primary voters for 21 cents apiece, a puny amount compared with TV ads.
Facebook can also create what it calls Lookalike Audiences—people who share certain characteristics with the folks on your e-mail list.
This is an important capability. Facebook’s algorithm notices not just the types of posts you like but also how your friends react to what you share. So say you’re advertising in a swing state like Virginia. You have an e-mail list of likely voters, and you want to reach people in their mid-thirties and early forties to whom outdoor activities are important.
You can hit that group with a custom piece of advertising—for example, a short video of the candidate hiking Old Rag, talking about his support for National Park Service funding—that might not resonate with a large segment of a TV audience but really rings these voters’ bells. You could always do that with direct mail, but now you can find their friends, too. And do it for a price most big campaigns would consider a rounding error.
“Facebook’s power is the data,” says Tyler Davis, a partner at Chong & Koster, an advertising agency that specializes in digital communications for political, advocacy, and corporate clients. Facebook users have done such a great job of letting the company know who we are, who we know, and what we care passionately about that the company has developed an extremely valuable cache of “first party” data.
Facebook’s other advantage is the way it dominates the time you spend with your smartphone. Eighty-five percent of the service’s 190 million US users each month access it via mobile devices, says Facebook spokesperson Andy Stone. Thirty percent of Americans use the service to get news, and the company wants to be an even more important source of information—it just struck deals with big publishers to host their content directly on Facebook’s mobile platform.
On mobile devices, Facebook users encounter ads the same way they see editorial content or updates on friends’ kids’ funny Halloween costumes. The ads flow into users’ feeds, and videos just start playing like photos in a Harry Potter newspaper as you scroll past them.
If you click those ads to hear their sound, or choose to hide them, you give Facebook even more data about yourself. You don’t need to tell it you’re a moderate conservative who rides a bike to work and likes dogs. Facebook has probably already figured you out.
And that’s where things get interesting. Because when advertisers buy airtime, they’re looking for viewers’ attention, but they’re more interested in which viewers they’re reaching. Facebook’s data trove lets the social network “have the same vocabulary available to traditional buyers as TV does,” Davis says.
Double income, no kids? Churchgoing, professional mom? “Ultimately, the point is Facebook wants to be found in the following way,” Davis says. “They would rather have buyers think of it as an alternative to TV, rather than a piece of the ‘digital’ budget.”
Not an alternative like yard signs, mailings, or billboards. Facebook wants to offer advertisers an experience and an audience that’s just as desirable as the one TV has.
If traditional broadcasters are nervous, they’re not letting on. “I’ve been hearing about disruptive political advertising for about 20 years from non-broadcast media,” says Dennis Wharton, spokesperson for the National Association of Broadcasters. “The reality is members of Congress who want to move the needle in terms of their polling and get-out-the-vote efforts recognize that broadcast radio and TV is the tried-and-true way to influence voter behavior.”
Facebook’s micro-targeting ability is “something we recognize as a reality in terms of fragmentation and another way for political candidates to get their message out,” Wharton says, “but I don’t think anyone disagrees that broadcasting will get the lion’s share of ad revenue from politicians this year, next year, and the foreseeable future.”
It’s not hard to foresee a different future. TV used to be the best way to reach likely (i.e., older) voters, but a third of all seniors are now on Facebook. And the generations behind that group are less likely to feel like part of a mass audience (“Think of passengers on your ship who got a boat of their own,” NYU professor Jay Rosen advised in a seminal work on media change) and not as likely to view TV ads as some kind of gold standard.
Of course, that will require political ad-makers to get wise. Negative ads, that great staple of TV politics, are trickier on social media. The goal of a negative ad, really, is to leave would-be supporters of the opposing candidate feeling so bummed out that they might not even vote. But Facebook has an algorithm that’s supposed to avoid giving users a bad experience. Thus those anti-Clinton Facebook spots in Iowa and New Hampshire, Reed says, were more about creating a chattering-class narrative.
Tone is another challenge for advertisers. The authoritative voice that works in most TV ads is simply not how people talk on social media. “The trend with the creative is about making the message similar enough to what the rest of Facebook content is,” Davis says. “Advertisers are wary of informality.”
TV stations are looking for ways to sell ads that take advantage of their own online presences, NAB’s Wharton says. They’ll roll in digital advertising with the airtime they sell, but their digital ads won’t be nearly as targeted as Facebook’s or Google’s. And those ads are a “supplement” to TV, not a replacement, Wharton says.
For what it’s worth, that’s exactly the way many newspapers used to view internet advertising, before digital publishing destroyed their business model by offering a product that was cheaper and could reach more of the people they were looking for. Will that happen in TV, too?
Perhaps sensing advertisers want more than the blunt object that is broadcast, Comcast is beginning to sell ads to on-demand customers using data from their set-top boxes. But if television wants to get better at sizing up its audience, guess who it might have to partner with. Last year, Facebook teamed up with the TV-ratings firm Nielsen to measure what shows its users watch.
That’s data that advertisers making TV buys might one day be very interested in accessing. And it’s yet another way social media could gnaw away at TV’s pile of political money.