SubscribeArrow

🇺🇸 Happy Election Day. Thanks for subscribing to Media Trends. Tell friends to follow along by signing up here.

1 big thing: Political ad spend hits new record

Illustration: Aïda Amer/Axios

More money will be spent on advertising this election cycle than any previous midterm cycle, according to the Center for Responsive Politics (CRP), which powers the election data website, OpenSecrets.

  • While final tallies are still coming in, "it's safe to say that this is a new midterm record," says Andrew Mayersohn, Committees Researcher at CRP.

Why it matters: More competitive races, a more radicalized political environment and a new midterm election with massive ramifications for the next decade due to gerrymandering have pushed campaigns and donors who support them to empty their wallets.

"Money was no object this cycle."
— Steve Passwaiter, VP of political advertising at Kantar Media/CMAG, an ad measurement firm

The big spenders: Not surprisingly, the biggest spenders on both sides were the biggest political action committees (PACs), like Priorities USA and House Majority PAC on the left, Congressional Leadership Fund and Senate Leadership Fund on the right, as well as the Democratic Congressional Campaign Committee and National Republican Congressional Committee.

The messaging: Republicans and Democrats have each homed in on two major issues in an effort to get voters to the polls.

  • For Democrats, "There's been a lot of message discipline this time around particularly around health care and the cost of prescription drugs, hikes in premiums, and preexisting conditions," says Passwaiter.
  • For Republicans, "Trump has moved immigration into almost a parity with healthcare," says Zac Moffatt, Founder and CEO of Targeted Victory, a digital marketing firm that works primarily with conservatives. "From an execution perspective, Republicans are embracing the President in their marketing."

Between the lines: Despite two years of bad press around election meddling and fake news, Google and Facebook, the world's two biggest automated marketing platforms, continue to rake in millions in political ads, due in large part to their ability efficiently target different groups of voters with different messages.

  • "We're a seeing about a 25% increase in programmatic allocations this cycle compared to 2016," said Grace Briscoe, VP of candidates and causes at Centro.

The bottom line: With more money to spend than some of the biggest corporations on advertising, political campaigns will stop at nothing to get voters to the ballots.

2. Midterms ad spending, by the numbers
Expand chart
Data: Kantar Media; Chart: Axios Visuals

For comparison: Local TV dollars have nearly eclipsed local TV dollars spent in 2016's presidential cycle.

  • Since the 2014 midterm elections, local cable TV spend nearly doubled. Digital spend nearly tripled.

Between the lines: Estimates vary for total ad spend because no group tracks every single medium, but ad spend for individual ad mediums are way up from years past.

3. Misinformation is our new normal

Illustration: Rebecca Zisser/Axios

Facebook said it removed 115 accounts last night after law enforcement told the company they might be linked to "foreign entities." Twitter said it removed more than 10,000 bots last week for posting messages, disguised as coming from Democrats, that discouraged people from voting in Tuesday's U.S. election.

  • Why it matters: A proliferation of misinformation this cycle despite countless efforts by platforms, reporters and academics shows that bad actors will always find ways to adapt and game the system.
  • Case-in-point #1: Buzzfeed reports that partisan meme wars have begun to flourish on Linkedin, now that platforms like Facebook and Twitter are cracking down on false or hyper-sensationalist posts.
  • Case-in-point #2: Some of the leading tech companies are seeing evidence that the same bad actors looking to interfere in the U.S. elections are now looking to spread false claims of meddling, sources tell Axios' Ina Fried.

Be smart: Misinformation is a political weapon that's historically been embraced by anyone looking to bury real information or discredit critics. President Trump has mastered this and has inspired other politicians in the U.S. and leaders around the world to do the same.

  • Some media critics argue that by even giving President Trump air time, journalists risk falling into what is now being called "The Trump Trap," which means you inadvertently give the president a platform to lie because it's too difficult to really fact check every false statement in real time.
  • The same could be said for platforms that give bad actors a stage for spewing hate and false news, but don't have the tools or technology yet to adequately down-rank or remove bad content before it spreads like wildfire.

The bottom line: Misinformation is our new normal. There's never been more pressure on media companies to fact check what powerful people say, and for tech companies to take action on inauthentic activity in real time.

  • But some newsrooms and platforms aren't designed to move fast enough to address these threats in real time, making third-party partnerships with fact-checkers and law enforcement more crucial.

Go deeper: The Future of Privacy: Disinformation by Sam Lessin

4. Scoop: AT&T to cut off some customers' service in piracy crackdown

AT&T will alert a little more than a dozen customers within the next week or so that their service will be terminated due to copyright infringement, according to sources familiar with its plans.

Why it matters: It's the first time AT&T has discontinued customer service over piracy allegations since having shaped its own piracy policies last year.

Between the lines: AT&T owns a content network after its purchase of Time Warner earlier this year, an entity now called WarnerMedia. Content networks are typically responsible for issuing these types of allegations to internet service providers (ISPs) for them to address with their customers.

  • A source said it's unclear whether WarnerMedia was involved directly in issuing piracy allegations in these instances, although it's possible.

The big picture: This is one of many complicated issues that is now surfacing in light of AT&T's historic $85 billion takeover of Time Warner in June.

  • Last week, HBO went dark for the first time ever after a carriage dispute with Dish. Critics of the merger, include the DOJ, alleged that AT&T may have intentionally failed to come to an agreement with Dish, in an effort to steal Dish's Pay-TV subscribers.

Go deeper.

5. Traditional sports look to new tech to survive

Illustration: Aïda Amer/Axios

Traditional sports leagues are investing in new technologies to lure younger users, many of whom are watching fewer sports live and are spending more time with new digital sports activities, particularly esports.

Why it matters: According to a new Whistle Sports study, more than half (56%) of young adults (roughly ages 13-21) feel that non-traditional sports are more relevant to their generation than traditional ones.

Details: Professional sports leagues are experimenting with new technologies that will make games more approachable and compelling for younger audiences.

  • Major League Baseball began testing ways to incorporate augmented reality (AR) into its apps last year, including labeling player positions, serving up relevant stats or showing fans how much ground an outfielder could potentially cover on a fly ball.
  • The National Basketball Association has added a feature to its popular League Pass TV service that transforms games into VR viewing parties. The league has already committed to broadcasting 27 games in full VR and allowing all the games to be viewable from within a headset. 
  • The growing popularity of esports is also pushing sports team owners to think seriously about how to modernize sports partnerships to reach younger audiences.

The bottom line: "For sports leagues, you've got to figure out a way to be relevant where those eyeballs are," says BTIG media analyst Rich Greenfield.

Go deeper.

6. Exclusive: SB Nation launches local podcast network business

SB Nation, the sports network from Vox Media, is launching 32 new podcasts, one dedicated to each NFL team. It’s also working to create localized podcasts for all teams within big sports markets around the country. 

Why it matters: Vox Media is investing heavily in its podcast and television studio businesses to grow its revenue and audiences. The company is slated to triple its podcast revenue this year from 2017, according to Marty Moe, President of Vox Media, Inc.

  • “In 2019, we see the podcast business going well into the nine figure numbers," Moe said. Vox Media later clarified that they see this revenue number over the next five years, not next year.

Details:  SB Nation began testing the local push in Philadelphia in September, launching podcasts dedicated to each major Philly sports team. 

  • The goal is to create a local podcast network that will service fans whose only alternative to local sports coverage in audio right now is local radio. 
  • “Over time, SB Nation will become as much of an audio experience as it is a text and video written experience,” says Moe. 

Between the lines: If successful, SB Nation’s local podcast push could help Vox Media lay a framework for a larger, more localized podcast network that it could use to drive revenue and market other products and services. 

  • Moe believes that SB Nation’s audience of roughly 40 million unique visitors per month, per Comscore, gives the brand enough scale to experiment with localized audio content. 

The big picture: Vox Media has reportedly struggled to drive revenue amid a digital advertising drought that's plaguing the entire online publishing industry. In September, The Wall Street Journal reported that the media holding group was on pace to miss its revenue target this year by roughly 15%. 

7. Apple looks to media as hardware sales fall flat

Photo by Aytac Unal/Anadolu Agency/Getty Images

Apple CEO Tim Cook said last year that he hopes to double the company's "software services" revenue, or money made from apps like the App Store, iTunes, and Apple Pay by 2020.

  • Those services seem to be focused lately around user engagement through various media, including music, news, original video, etc.

Why it matters: Apple's iPhone revenue rose by 29% in the most recent quarter, compared to a year previously — even as the total number of iPhones sold was flat. So the company is doing more to suck dollars out of the way users engage with its devices, per Axios' Ina Fried.

  • The latest ... Music: Apple has held preliminary talks about investing in bankrupt broadcaster iHeart Radio, in an effort to boost its streaming music service, according to the FT, which could help Apple market Apple Music.
  • Video: Apple will give away free original content to owners of its hardware products (Apple TV, iPhone, etc.) as part of its new digital TV strategy, according to a new report out Wednesday from CNBC.
  • News: The company seems to be winning over the hearts of publishers with its Apple News product, although some complain the platform has yet to figure out a better way to share revenue with its content partners.

The big picture: There's been some talk about whether Apple would consider bundling these services into one standalone subscription, or using a mix of content to sell higher-priced devices.

Between the lines: Apple alluded to investors on its last earnings that it plans to focus on how to gobble up more of consumers' time and attention on its device, akin to how a social media company thinks about its user relationship.

  • "As we have stated many times, our objective is to make great products and services that enrich people’s lives, and to provide an unparalleled customer experience so that our users are highly satisfied, loyal and engaged," said Apple CFO Luca Maestri.
  • Yes, but: As Ben Thompson notes in his daily Stratechery email, if Apple is to focus on user engagement, it needs to develop some sort of metric, (something akin to the "average revenue per user" metric used by social media platforms), that will show how users grow on the platform and become more monetizeable over time.

The bottom line: It seems likely that a bundled subscription would be how Apple charges for some sort of combined media product, as advertising generally goes against the company's privacy values and they already have a strong direct-to-consumer payment relationship with Apple Pay.

8. 1 fun thing: Today's internet is by land, sea, air and space

Illustration: Rebecca Zisser/Axios

Delivering faster internet to more people in more places requires increasingly exotic approaches.

Why it matters: That latest viral video might start out in an underwater data center before traveling to a satellite, undersea cable or balloon — then hopping wirelessly to reach your phone.

A few things you may not realize about how communication pipes work around the world, from my colleague Ina Fried and me:

  1. Hundreds of thousands of international cables are actually buried underwater.
  2. Even the cloud is increasingly moving under water.
  3. "Wireless" technologies actually use a ton of wires.
  4. Wireless towers that can be ugly are often disguised to look like other things.
  5. Space has become the new frontier for wireless signals.
  6. Alphabet, the Google parent, has been testing the use of balloons to help remote connectivity.

Dive in.