Cost of Ad Buys Rises Ahead of ‘24 Presidential Race
Advertising wars are already heating up in the 2024 presidential race, but increasing costs for ad buys on television and social media are leading some marketing strategists to reevaluate their approach.
According to a new analysis by Keen Decision Systems, a marketing insights firm, that approach — to change course, and pull back from channels like television and social media as prices rise — is a big mistake. While it’s true that the cost of ad buys on channels like television and social media is rising in the lead up to the 2023 midterms and the 2024 presidential race, Keen’s analysis shows that brands fare better when they stay the course, and that greater results are achieved by continuing to execute plans that maximize profitability.
“Dollars flow in to market in a significant way, for a short time window. This increases the demand relative to the supply across channels and drives prices up,” says Keen Decision Systems CEO Greg Dolan. “To plan for this, we’d adjust the price per activity in our model for the time window, which would account for this impact in the optimized plan.”
Dolan says the main reason why brand marketers are pulling back on television advertising ahead of the 2024 campaign has to do with the higher costs.
“If the media buy is too expensive, the marketer can’t get the same impact with existing dollars. They are getting less value for every dollar spent,” he says.
The results of Keen’s new analysis show that as the 2024 election advertising cycle ramps up, ad buys are getting fewer impressions or GRPs (gross rating points) for the same cost. That means the incremental value of additional GRPs is not being realized, given the increased costs.
“Interaction effects across the entire mix also dampen,” Dolan says. “Given higher costs for other traditional and digital tactics results in less total impressions in market, the interaction effects across these tactics are not as great. A higher tide truly lifts all ships.”
Data from AdImpact shows that 2024 presidential hopefuls have already reached more than $70 million in ad spending this election cycle. All that spending is leading to higher costs for brands outside the political sphere, as well. MAGA Inc., the super PAC backing Donald Trump, has already spent $15.7 million on national cable advertising, out of a total of nearly $20 million in ad spending so far, while a PAC that supports former Governor Nikki Haley has focused its efforts on three “Nikki Haley for President” text ads published on Google’s advertising platforms.
For brand marketers, Dolan says Keen’s analysis makes it clear that pulling back on media as competition heats up and buys get more expensive is a mistake.
“Pulling back on marketing completely for any length of time is a mistake because of marketing’s long-term effects. Marketing builds value over time, so if you are not adding new investment, your past marketing efforts will decay over time at different rates,” Dolan says. “It is ok to pull back when there are adverse marketing conditions or business challenges. As an example, if a brand would lose a lot of distribution at shelf, a marketer would likely want to pull back spend some. Otherwise, they would be driving consumers inefficiently to empty shelves.”
The more effective approach is for advertisers to optimize their marketing mix ahead of the midterms based on market and business factors.
“[Advertisers] can use a platform that includes all marketing tactics, and environmental factors, like the election, in a model,” Dolan says. “The optimization platform would optimize each dollar based on where the marketer will get the best return—[for example], the highest marginal ROI based on the response curve. Changing pricing will be a key component of the recommendation.”