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Ad-tech firms and political agencies prepare for another year of spending heavily on CTV

October 27, 2023
in Technology
Ad-tech firms and political agencies prepare for another year of spending heavily on CTV
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As political advertising ramps up during the 2024 election cycle, ad-tech firms hope to make money on connected TV as campaigns increasingly look beyond linear channels.

Earlier this week, Comscore and The Trade Desk debuted new audience segments for political advertisers to help campaigns reach viewers across CTV platforms. Using set-top box data that gets processed through Comscore, national, state and district campaigns races will be able to re-target ads based on whether someone has already seen a candidate’s or a competitor’s ad. Comscore’s new segments, exclusively accessed through The Trade Desk, could potentially help campaigns increase messaging during a pivotal political year — or decrease the frequency to save money and avoid exhausting would-be voters.

“Television data provides such a unique window into the perspectives of the individuals seeing the ads,” said Rachel Gantz, managing director of Proximic by Comscore. “When you think about the types of viewership like where people are getting their news from [and] what types of ads they’re exposed to, all of that is far more recent data than their voter registration data.”

The partnership comes just a few months after Xandr, another key CTV player, announced plans to ban political advertising on the Microsoft-owned platform. Meanwhile, other adtech firms recently met with political agencies. Another, Mobiquity Technologies, recently touted its programmatic platform’s own political advertising tools that help determine demographic and psychographic segments based on various data sources.

“When you look at how consumers and voters are spending time, it’s pretty much like a 50-50 split in terms of linear versus streaming time spent,” said Kevin Fisher, general manager of business development at The Trade Desk. “But 14% of dollars are spent in connected TV, whereas the rest is in linear. There’s this misalignment.”

CTV political advertising isn’t entirely new — it also played a role in the 2022 midterms — but campaigns have increasingly looked to reach viewers beyond broadcast. According to AdImpact, overall political ad spending in 2023 and 2024 will reach a record $10.2 billion — up from $8.9 billion spent during the 2022 election cycle. 

While $5.1 billion is expected to land in broadcast coffers and another $1.9 billion goes to cable, AdImpact expects spending of $1.3 billion for CTV — surpassing the $1.2 billion it forecasts for digital and nearly four times the projected $361 million for radio. However, CTV’s overall share of spending is only expected to increase from 12% to 13%.

Political advertising has been a boon for The Trade Desk in the past. During the first quarter of 2020, CEO Jeff Green cited political advertising as a key revenue driver. More recently, The Trade Desk’s second-quarter 2023 earnings released this summer mentioned political advertising “could also cause our revenue to increase during election cycles and decrease during other periods.” However, it’s not the only company active in the space. Others including Vizio and MiQ. Streaming platforms like Roku and Hulu and the analytics firm SambaTV also have all worked with political advertisers in the past and could be active again this cycle.

With high stakes, limited budgets and short time frames, political campaigns often need to make immediate changes to media plans — something that’s not always easy with broadcast and cable ad buys. Anything that ties linear and digital data helps, said Ryan Meerstein, managing partner at Targeted Victory, which works with high-profile Republican candidates. “What campaigns are looking for is not just incremental reach, but immediate incremental reach. They’re only getting so far with their linear buys.”

Super PACs might especially benefit from CTV advertising. Although linear channels offer all candidates equal pricing, that’s not always the case outside of broadcast.

“Our campaigns are offered lower lowest unit pricing on broadcast television, and our super PACs are not,” Meerstein said. “So all of the sudden we now have this streaming space that has broadcast quality creative. It now has cable reach — if not better — and there is no price discrepancy between a campaign and a super PAC. So we are actually seeing super PACs who are now seeing their lane as to go buy CTV.”

Despite the potential advantages, others point out that CTV’s lack of transparency standards has its downsides. Tyler Goldberg, director of political strategy at Assembly Global, noted that political ads have to be disclosed before the ad buy begins, which helps ensure everyone is being treated fairly with pricing and air time. That’s because broadcast channels are held to federal elections laws that don’t govern digital channels like CTV and social media.

“Spending drives other spending,” Goldberg said. “So if you can’t say ‘our opponent is spending X,’ it’s a tough sell to say we should spend more…The lack of required disclosures are really slowing down the growth of digital political advertising.”

Presidential candidates are also looking at CTV earlier this election cycle than in the past, said Melissa Kurstin, managing director at MiQ. She said this is the first time her company has worked with candidates a year in advance. Although candidates are already increasing spending, she also pointed out that standardization across CTV inventory still needs to improve such as how “premium” is defined across platforms. 

“When buyers talk about premium, they talk about content,” Kurstin said. “But we need to focus on the outcome and the audience you want to reach … You can’t just think about advertising on Hulu and Max and think the audience is static.”

https://digiday.com/?p=523495

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