Jan 14, 2020

Kelly Georgia to WSJ: How buyers are reacting to the new digital landscape

Author: Deep Root Analytics

Wall Street Journal
January 14, 2020

Here’s How New Digital Ad Limits Are Reshaping 2020 Campaigns

The Takeaway: Google, Twitter and Facebook have rewritten the rules for digital political advertising — and campaigns are preparing to shift gears.
Social media and internet advertising giants have changed everything about political campaigns over the last decade. Now some are doing it again, in real time as the 2020 campaign unfolds.

Buffeted by criticism over Russian advertising in the 2016 presidential election, Alphabet Inc.’s Google and Twitter Inc. have changed up their rules for how political campaigns and their supporters can advertise to voters. Facebook Inc. has left its policy largely unchanged, but is requiring more disclosure about the political ads it runs.

Publicly, the leading presidential campaigns have waved off the changes, and some are more meaningful than others. Behind the scenes, campaigns are scrambling to figure out whether they need to shift strategies or reshuffle spending.

“Some clients have said things like ‘We had a whole plan in place and can’t do it anymore.’”

— Kelly Georgia, Deep Root Analytics

“What they’re really waiting to see is if they run a test campaign, specifically on YouTube under the new regime, and don’t see the lift and results, they’re ready to put premium money elsewhere,” says Kelly Georgia, a vice president at Deep Root Analytics, which works with Republican campaigns.

Former Vice President Joe Biden’s campaign said the changes won’t affect how it reaches voters. “Social media giants are only taking these small steps to paper over the fact that they are failing to address the root problems that allow misinformation, hoaxes and lies to poison their platforms,” a spokesman said.

A Trump campaign spokesman declined to comment on the changes.

The stakes are growing. Digital advertising remains the most cost-effective way for candidates and advocacy groups to reach the people they want. Total U.S. spending on digital political ads will reach $2.9 billion in 2020, double what it was in the last presidential year and approaching the $4.8 billion expected for broadcast and cable ads, consulting firm Borrell Associates Inc. projects.

Rise of the platform

Barack Obama’s 2008 campaign put candidate websites and social-media strategies front and center. By 2016, campaigns joined other advertisers increasingly dependent on a few giant digital platforms that make it easier to narrowly target groups of potential voters and contributors.

Facebook collected roughly 45% of the $623 million spent on digital advertising in the 2018 midterm elections, estimates Tech for Campaigns, a technology nonprofit geared toward left-leaning and centrist campaigns. Google received about 14%.

Advertisers flock to Facebook because users tend to donate or join campaign email lists in response to ads. Meantime, ads in Google search results and YouTube videos seem effective at persuading voters.

Big spenders

So far in 2019 and 2020, President Trump and a dozen Democratic presidential contenders have spent $76 million on Facebook ads and $54 million with Google ads, an analysis by Acronym, a progressive nonprofit that tracks campaign spending, found. Mr. Trump and billionaire Democratic candidates Michael Bloomberg and Tom Steyer have spent much of that.

“Candidates are going where the voters already are,” says Daniel Kreiss, a principal researcher at the the University of North Carolina’s Center for Information, Technology and Public Life.

The bottom line: Campaigns are largely stuck with the Internet giants’ digital-ad policies because there aren’t any federal digital political ad regulations.

“There’s no market alternative — you can’t just leave digital advertising on Facebook.”

— Daniel Kreiss, University of North Carolina professor

That dominance, of course, has drawn scrutiny from regulators and others, especially after it became clear that Russian entities bought digital ads in an effort to influence the 2016 presidential election.

Targeting ad targeting

Twitter moved first, announcing in October that it would largely ban political ads. In November it elaborated, in part by limiting the targeting of political ads.

It’s a dramatic move, but unlikely to have dramatic repercussions: Twitter is more about link-sharing and partisan sniping — it generated “less than $3 million” from political ads in the 2018 midterm elections, its finance chief has said. Still, Twitter’s move put more public pressure on Google and Facebook.

Google was next. It said in late November it would limit how finely political advertisers can target ads on its networks.The result is a little more like buying ads in big metro broadcast markets: You’re paying to reach people you might not want to, just to get those that you do.

That could make some kinds of highly targeted or inflammatory digital advertising less attractive: If you can’t be sure that your message will only reach the intended eyes, it could pay to moderate your tone, Mr. Kreiss said. “You might have to aim more to the median voter.”

Facebook, which also owns Instagram and Whatsapp, came last, and its changes are the least disruptive — to the relief of many advertisers. It will let users block most political ads and enable more transparency in its ad library, among other changes. Facebook will also continue to let campaigns upload their own lists of users to target, a common approach to reaching very narrow audiences.

“As other platforms are limiting targeting, people are going even more toward Facebook,” said Loren Merchan, a partner at political firm Authentic Campaigns, who worked on Sen. Kamala Harris’s run for the Democratic presidential nomination.

That light touch could lead more political advertisers to Facebook’s platform, but it is unlikely to make much difference to Facebook’s business. CEO Mark Zuckerberg told investors in October that he expects political ads to account for less than 0.5% of the company’s total revenue in 2020.

“You’ll continue to see large-scale investment and spending,” Mr. Kreiss predicts. “Campaigns don’t have another easy way to reach people, particularly the ones they need to reach.”

To read more from the WSJ, click here.

Meet Kelly

Kelly joined Deep Root Analytics at the start of 2018. As VP of Data and Digital Partnerships, she works to bridge the divide between television and digital targeting using best in class data solutions. Prior to joining Deep Root, Kelly worked for American Crossroads and its affiliated Super PAC, the Senate Leadership Fund, as well as the issue advocacy organizations Crossroads GPS and One Nation. Most recently, Kelly was Deputy Political Director and Digital Director for those organizations, focusing on digital measurement and cross screen optimization.