Dec 8, 2023 - Business

U.S. political ad market projected to reach record $16 billion in 2024

U.S. political advertising spend
Data: GroupM; Chart: Axios Visuals

The advertising dollars spent on U.S. elections and advocacy issues will grow to roughly $16 billion next year, up 31.2% compared to the last presidential election in 2020, according to a new forecast.

Why it matters: The U.S. political ad market has gotten so big that next year it’s expected to become the 10th largest ad market in the world, surpassing all of Australia.

Driving the news: New projections from GroupM, one of the world's largest paid advertising agencies, suggest that political ad revenue will reach $15.9 billion in 2024, or $17.1 billion including direct mail.

  • A majority of political advertising spend in the U.S. goes to local broadcast TV, but an increasing amount is moving toward digital channels.
  • These figures are higher than projections from other firms that estimate political ad spend in the U.S. will total around $10 billion in 2024.
  • GroupM's figures include a wider array of political placements across different channels, such as digital out-of-home billboard signs. Its numbers also include issue advertising spend from political action committees and advocacy groups.

What to watch: Artificial intelligence is becoming a much bigger part of political advertising in the U.S., prompting concerns from regulators about deception and disclosures.

  • The Federal Election Commission (FEC) in August opened up a public debate over whether and how campaigns should be allowed to use artificial intelligence (AI).
  • Broadly speaking, in countries around the world that enforce stricter regulations around political ads, such as many European countries, the growth of political advertising is slower than in countries with fewer rules, such as India, Mexico, and the Philippines, per GroupM.

Zoom in: Fueling the growth in political ads this cycle is the presidential race, which has so far seen record primary spend on the Republican side.

  • More than $100 million was spent through September on Republican primary races, faster than any previous cycle, per political AdImpact, an advertising intelligence firm.

Zoom out: The overturning of campaign finance restrictions in 2010 led to unprecedented investment in U.S. elections. New digital ad formats created more opportunities for campaigns to spend that money on paid marketing.

  • One of the fastest-growing segments is Connected TV (CTV) advertising, or video ads that run on digital TV sets connected to the internet. They offer campaigns the ability to target their ads more narrowly to voters with certain interests, instead of just age and gender demographics.
  • The phaseout of internet tracking cookies is forcing campaigns to rely more heavily on digital formats outside of traditional digital banner ads, such as streaming, keyword searches, and podcasts.

Be smart: Historically, campaigns were limited to advertising opportunities on heavily regulated mediums with limited inventory, such as television, radio and print.

  • Today, the internet offers infinite inventory for campaigns to place ads with few regulations. That has also contributed to the historic growth of political ad spend in the U.S.

The big picture: The onslaught of political ads in the U.S. has widespread implications for industries outside of politics.

  • Advertisers have been forced to adjust their marketing strategies during election years to avoid inventory competition on local broadcasts.
  • Political ads tend to falsely inflate growth rates for traditional media channels like newspapers and television, helping them to stay afloat longer than they otherwise would.
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