Whither Political Advertising?

By DHinMI

In a recent article for the New Yorker, media writer Ken Auletta examined the increased difficulty of cutting through the advertising clutter, and how the advertising industry is changing its approaches and their business models in reaction to these challenges.  These changes are obviously important for economic reasons--1 trillion dollars is spent worldwide annually on advertising, half of it in the U.S.  But the changes are also important for us politicos to consider, especially those who kvetched about how much money went to the firms of Joe Trippi and Bob Schrum.  What Auletta describes is an advertising industry that will continue to move away from advertising and into marketing, leaving behind the business model still used by political consultants, and making it more difficult and more expensive than ever to reach prospective voters and educate them about candidates and public policy.

Nothing is more crucial to a major election campaign than the television advertising.  Sure, the candidate has to be good, she has to raise enough money to be competitive (mostly to pay for television), the underlying demographics and issue dynamics have to combine to create a competitive political environment, and the other components of the campaign--press, field, scheduling, etc--must be effective.  But in a statewide or national campaign, it's usually the effectiveness of the television ads and the number of times the ads are seen by the target demographics that have the greatest effect on the final results.  A standard assumption among campaign professionals is that in a close race a strong field effort can take you from 47% to 50%, but without television you'll never get to 47%.  Television advertising usually accounts for at least 60% of any campaign budget, and voter contact (including other forms of advertising and message delivery such as direct mail) should ideally make up 80% or more of a campaign budget. 

On some blogs people have been calling for a new way of paying consultants to--depending on the person's perspective--redirect resources into other areas of voter contact, to keep money out of the pockets of supposedly undeserving consultants, or just to save the campaign money.  One of the favorite solutions offered up is fee-based payments, which is in fact gaining support in corporate advertising.  An ad executive Auletta focuses on addresses one obvious problem with looking to hourly-fees as the panacea: “I sometimes worry that clients are paying us for the hours we spend working on projects rather than the worth of the ideas.”  But there are plenty of other problems specific to political campaigns that don't have corollaries in commercial advertising. 

Political consultants assume risks and confront opportunity costs that never factor in to the decisions of corporate advertisers.  If a big ad agency signs a contract to advertise Scrubby Soap, they usually know how much they'll be making over a given period of time, and the campaign won't "end" unless they lose the contract.  As long as the client is satisfied, like a law firm, the ad agency could keep the client for a long time and rely on the client for a steady stream of revenue.  The ad agency isn't involved with producing Scrubby Soap, and they have close to full control over how Scrubby is presented to the public through the various forms of media and consumer contact.  It's highly unlikely a rival ad agency is running an advertising campaign asserting that if you use Scrubby Soap that your skin will fall off, your children will die horrible deaths in poverty and that the people behind Scrubby Soap are liars and cheats who love pedophiles and want to facilitate Kim Jong Il's efforts to develop ICBM's that could threaten the United States with a nuclear holocaust.  Finally, if the ad campaign for Scrubby Soap coincides with Scrubby moving from 7% of market share to 12% of market share over a two year period, the ad campaign will be judged a huge success, and everyone associated with it will get corner offices and become fabulously wealthy.

Most political media consultants envy the security and predictability of corporate advertising.  When a consultant signs a challenger, they can typically expect to spend lots of time talking with that candidate, working with them on political and strategic decisions, trying to impart some of their political knowledge, trying to keep them out of trouble, and collaborating on the course of the campaign with people over whom they often have little or no control, including the pollster, the campaign staff, other figures or organizations important to the candidate (such as campaign committees, state party organizations, coordinated campaigns, family, other office holders, etc.), and other consultants trying to convince the decision makers to emphasize their medium (such as mail, phones, etc).  [Unlike commercial advertising, almost all political consultants specialize in one type of media--electronic (both radio and television), print, mail, Internet of direct voter contact, usually by phones.]  After all that time spent with the candidate, it may be that there's little or no money for television advertising, and they've spent hours and hours over several months and months will little financial reward, and possibly a financial loss (at least in terms of opportunity costs). 

In addition to the risks, political media consultants aren't trying to convince somebody to buy something or to simply tap in to preexisting feelings with positive messages, they're trying to change attitudes and opinions, and sometimes must face up to or even try to evoke people's fears.  And while the rivals of Scrubby Soap almost certainly wouldn't even try to associate Scrubby Soap with fear, an opponent will almost always try to make one's candidate an object of distrust and often even fear.  This happens in an intense period, so there isn't a leisurely schedule of a couple years to achieve your campaign goals.  And getting 12% means you failed on a spectacular level, and consistently getting to 47% means you're going to have to get a new line of work.  Political advertising is a very different activity than trying to market Scrubby Soap.

Comparing the goals, challenges and methods of commercial advertising to political advertising is a dodgy endeavor.  Expecting the same business model to apply to both businesses is even more dodgy.  For instance, think about the implications of moving to an hourly fee.  It will probably have to result in the same kind of revenue, because political consultants--few of whom make anywhere near the money earned by top corporate advertising people--make most of their political money from July through November in even-numbered years.  But it would require campaigns to pay more money up front than they now do, making it more difficult for insurgent campaigns with the promise of ending strong to hire the top consultants, since they seldom have much money prior to the Summer of the election year, after which point most consultants like to have their full stable of clients in place and don't usually seek new clients that they won't be able to effectively serve.  Thus, the best consultants will no longer have a mix of clients including incumbents and challengers, which instead of opening up the market for consumers of consultancy, would probably push out new consultants willing to take a risk of a big payoff from heavy advertising, because their only way of beating the costs of the established consultants would be to charge fees far lower than the going market rate. 

As Auletta describes, the fractured media market has made advertising more expensive and much more complex:

In 1965, advertisers could reach eighty per cent of their most coveted viewers—those between the ages of eighteen and forty-nine—just by buying time on CBS, NBC, or ABC. “You could put together a media plan in an hour,” Roy Bostock, the former chairman and C.E.O. of the MacManus Group, recalls. “When we introduced Scope, in the mid-sixties, we were able with television advertising in the first four weeks of the ad campaign to reach more than ninety per cent of U.S. television households ten times.”       

But a typical American household today has a choice of more than a hundred TV channels, and the broadcast networks—there are now six of them—attract only about thirty per cent of viewers. Today, it would take a hundred and twenty-five CBS, NBC, or ABC ads to reach the percentage of viewers that three network ads once reached. [Randall] Rothenberg, who is now a director of Booz Allen Hamilton, the consulting firm, also says, “It’s easier for Toyota to figure out a new way of producing cars than it is for McCann-Erickson to figure out a new way of persuasion.”...

Advertisers certainly realize that there are other means of reaching consumers, and that different media reach different audiences; people between the ages of thirteen and twenty-four, for instance, spend more time on the Internet than they do watching television, according to Mediamark Research, Inc., an audience-measurement firm. A thirty-second ad on a top-rated network program can cost about a half million dollars—and up to two million four hundred thousand dollars for a Super Bowl spot. But, however extravagant such expenditures may seem if measured in terms of cost per viewer, advertisers have not found a better way to create wide awareness of a product....

Susan Lyne, the former president of ABC Entertainment, says, “Anything that is complex narrative storytelling—one-hour dramas, narrative miniseries, character-driven movies for television—advertisers don’t believe there is an audience under fifty for these kinds of shows.”

One of the reasons that the advertising industry is willing to shift to hourly fees is that it no longer relies so heavily on network television advertising, thus making their reliance on the 15% commission for ad buys less important in their overall revenue stream.  Much of the growth in adverting come from product placement, guerrilla marketing, even working with the "content providers" on scripts and show development, none of which really applies to political advertising.  The Internet, while growing as a medium, is also fairly difficult to measure in terms of who one's reaching and the effectiveness of the contact, especially with pop-up filters and the like.  TiVo and commercial free digital radio protect people from the reach of advertising.  And the comment from the former ABC executive makes it hard to believe the dumbing-down of network television won't continue--plenty of people under fifty enjoy high-quality dramas and character-driven original movies and mini-series, they just watch them were they're at, on HBO, Showtime and the like, where advertisers can't reach the viewers (except through product placement). 

So the challenges are great and likely to get greater for political communications consultants.  Their business model appears under attack as an anachronism, but the new business model in corporate advertising isn't applicable to political campaigns.  It's more difficult and more expensive to reach voters through the traditional means of network television, and what's replacing television isn't as conducive to reaching voters.  And these challenges are likely to grow over the next couple decades.

Comments

[Crab Nebula]

The interesting thing for political ads (and all ads) is 10, 20 years out, when everybody has super broadband, and it will actually be much cheaper because of narrowcasting.

I envision little full-motion movies playing in boxes on your web page. The creativity required will be very interesting...it will have to get people to click thru. I think political TV ads will try to drive traffic to web presentations.

Imagine drawing a viewer in, and getting them to click through interesting video presentations of policy subjects they may be interested in. Imagine John Candidate doing a custom arctic drilling spot you can view, cause you care about that. Followed by a discussion with a petroleum geologist (with neat charts, or animations of caribou migration patterns) and an economist talking about why it's a mistake. Etc.

It potentially will result in much more information being available. I mean, a person can go to candidate websites and read policy papers now, but who wants to do that? You could tell the medicare story in a few minutes with some voiceover, some dramatization, some metaphor.

I don't think people will watch extended versions of existing TV ads; they will become more substantive (or funny) like today's documentaries, but with greater added graphical capabilities. That will get cheaper in time; it's too expensive right now for political ads. The postproduction effects quality of many regular ads today is pretty amazing.

[Taciturn]

Sure, candidates are pretty much bound by the electoral cycle (especially penny-poor challengers), but couldn't the Democratic Party (or similar progressively-oriented bodies) invest in noncyclical advertising? Not necessarily something particularly overt, but getting positive images of the party & progressive organisations out there in the background.

That way, you get a general progressive / Democratic base from which specific candidates can use as a thematic jumping off point, rather than begin from scratch each time the elections roll around.

[Kagro X]

I've worked in both political consulting and product advertising. I once tried to sell a direct mail consultant on a concept a colleague of mine has been developing in product advertising: licensing. But to no avail.

The theory here is that many regional advertisers are spending money they don't have to, developing parallel campaigns for similar products. Meanwhile, advertising agencies are developing multiple approaches to single products (whether on spec as a pitch, or in numerous concepts for an existing client), from which the client chooses only one. So there's a lot of creative material out there going unused or underused.

Direct mail, I think, lends itself well to this idea. Issue-oriented pieces can be used and reused by multiple campaigns across the country, just by changing the name on the back.

In fact, the DCCC could contract with a direct mail production house to create generic issue pieces, which they would license (or sell) to the DCCC, which would itself relicense to individual campaigns, profits being split between the creators and the DCCC.

Or something like that.

[DHinMI]

Kagro--a lot of legislative caucus operations already work somewhat like that. I remember a few years back working with a photographer who was having me drive back and forth through a pothole--Michigan's roads are probably the worst in the country, especially in the late 1990's--just so he could get a shot of the "perfect splash" around my front wheel well. That shot ended up on similar mail pieces that went into about 6 or 7 legislative districts where the candidates were running on platforms that included increased spending for road repairs.

I just spent some time the other day with a friend who's in charge of a county party organization, and they're doing similar stuff helping out some municipal and school board candidates with templates for websites and basic pass pieces. And apparently they did the same last year with county commission candidates where they had a deal with their printer that allowed them to use fairly standard templates for multiple pieces, which got their costs down to .5 cents per glossy, which is dirt cheap, especially considering we're talking about only unionized print shops.