• John Walker

Will Election Noise Drown Out Your Marketing Campaigns?

The election is less than a month away so I sat down to see how it’s manic ad spending and shrill messaging might affect your marketing campaigns. But what I found is a big surprise. This election year ad market is much different than any I’ve ever seen.

Digital Ad Spending Growth is Slowing

Over the last 10+ years, digital ad spending overall has been growing at double digits. Add in an election and you’d expect to see additional growth. But the COVID-19 pandemic has tamped down ad growth dramatically and overall digital ad spending is expected to grow just 1.7% in 2020. Total spending is expected to be $136.66 billion which is still colossal, but growth is slowing.

Google’s Ad Revenue is Declining

Google is leading this ad revenue decline with an expected subtraction of 5.3% from $41.80 billion in 2019 to $39.58 billion in 2020. Google has never seen an ad revenue decline. Never! Digital ad spending across many sectors are expected to fall led by travel, retail, and restaurants. The result will be a projected decline in Google’s share of the digital ad market from 31.6% in 2019 to 29.4% in 2020. Facebook and Amazon are expected to grow digital ad revenues this year, but not as much as in prior years.

Google Paid-Search Market Looks Downright Freaky

In the auction-based market for ad clicks that provides most of Google’s revenue, demand is falling and so are prices. The table below shows what had been a stable marketplace going kind of freaky.

In 2020, the growth in ad spending (yellow line) is declining, clicks are growing (blue line; +39%) and cost-per-click is declining (purple line; -22%). What’s weird about this is that you’d think when the number of clicks is rising, the cost-per-click would be rising too. But what must be happening is that clicks have gotten cheap so advertisers are just buying a lot more. It might also be that this year it’s harder to get consumers to part with their dollars so it takes more clicks to get a sale. In any case, trends look weird.

How Will the Election Affect Your Marketing Campaigns?

I predict this election will affect your marketing campaigns through its sheer drama but not through increased advertising volumes. It’s not going to be other ads that crowd out your message, it will be unpaid news that’s doing that.

This post was written by John Walker, Principal Consultant at J. Walker Marketing. Contact John to discuss your marketing challenges.

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