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End of Year Marketing Trends: Election and Holiday Advertising

By Aren Johnstone, VP of Operations

The team at Franchise Ramp has spent many hours preparing and analyzing marketing data from the last year as well as predictive models for Election & Holiday digital advertising to develop proactive strategies to maximize your marketing effectiveness in Q4 of 2020.

With the election and holiday season looming, I predict we will see record-breaking numbers for total digital advertising dollars spent.

It may be helpful to start with some hard numbers. 

The following graphs were produced from $3.4 Million in Facebook & Instagram advertising spend in over 600 accounts in the health and wellness industry across the country from Sept 1st, 2019 – Sept 23rd, 2020. 

87%- 93% of all impressions and spend on Facebook and Instagram were delivered on the News Feed of either platforms. The Feed is the largest real estate possible to deliver an ad, and therefore the most likely to produce a visual engagement, click, and form submission to lead.

What Does CPM Mean To You? 

CPM is the cost per 1,000 impressions, or times your ad is seen by users. CPM is universally used to analyze and track the “cost” to advertise on any platform ranging from Facebook to Super Bowl ads. CPM cost is determined by the platform, in this case, Facebook and Instagram. It is primarily based off supply and demand. The more people wanting advertising spots, the more they can charge, until people can’t afford it.  If everything in your funnels stays exactly the same, but CPM goes up 20%, then the cost to get a customer will also go up 20%. To hold constants, we analyzed CPM cost over the last year only on Feed, since that is where all spend and leads are coming from.

The good news is that CPM average is almost exactly the same as last year in September. The bad news is that user behavior is very volatile market-by-market for reasons such as COVID-19 infection rates, political climate, legal standing for business types, and even demographic of a market. Even if CPM cost is not amplified due to election advertising spend, it will most certainly increase in October and November similar to last year due to holiday advertising and come back down in December after Black Friday to Cyber Monday. 

How Might the Election and the Holidays Affect Advertising?

Depending on the source and time the report was published, predictions for total advertising spend for political campaigns in 2020 range from $7-$10 billion.  The percentage of that spend that will go to Digital is very hard to predict. If you take last elections percentage, it will fall around 20% of total advertising spend. However, this year, candidates cannot travel around the country and go door to door like they could before. The estimates range up to 40% of total advertising budget will be spent on Digital. That is a whopping $2-4 billion. To put that in perspective, that is 2%-4% of the total digital ad spend of the entire US across all businesses and industries in all of 2020.  While holiday advertising is distributed around the country, election advertising is heavily focused on battleground states and markets. Inside Elections predicts a total of six states – Arizona, Florida, Michigan, North Carolina, Pennsylvania, and Wisconsin – will be either toss-ups or tilt either Democratic or Republican, indicating heavy spending is likely. Iowa, Maine, Nevada, and New Hampshire are considered to be “leaning” either Democratic or Republican, so significant spend will still likely be headed their way. Other states that are considered “likely” for one party or the other and may receive some investment include Georgia, Minnesota and Ohio. States that are solidly red or blue likely won’t receive significant dollars for the general election. 

It is nearly impossible to analyze what percentage of available spots are purchased on digital by any type of advertising, but you can very easily report on percentage share of spot TV ad time. Kantar reported on 15 markets in swing states and found that during peak week these markets averaged 48% of available TV ad time was purchased by political advertising. Over a 16 week average, these 15 markets averaged 18% of available TV ad time was purchased by political advertising. This can be used to predict competition of digital spend in the heavily competitive markets.  

What Does This Mean For Franchisees?

It is more important than ever to understand your market and the potential competition for available advertising space in your market. 

The good news is that the Franchise Ramp team has been preparing and working hard internally and with our corporate partners to develop new strategies and tactics to produce the best results possible during Q4 of 2020.  

Here’s the rundown: 

  1. We are pairing lead optimized campaigns with reach campaigns in certain brands. In the month of September, lead optimized campaigns are averaging $20 CPM cost. Reach campaigns are averaging a $2 CPM cost. The reach campaign, even at 5% of the total budget, averages 1/10th the CPM cost of a lead optimized campaign. This allows us to get the “1st impression” MUCH cheaper and when a prospect sees an ad in the News Feed the second time from a lead campaign, they are more likely to convert on that second impression. If the 1st impression is 1/10th the cost of the second, it brings the average cost of the two impressions down tremendously.
  2. Facebook’s auctioning system algorithm prevents us from having any control over the CPM cost of Lead Generation campaigns; however, we can work to increase CTR and engagement. We are actively segmenting audiences and creatives to match those audiences. For example, men and women, young and old, with specific creatives to match the audience being targeted.
  3.  In highly difficult markets,  we are working with Franchisees and corporate partners on changing offers. The offer you are advertising is a huge potential “lever” that can be pulled in addition to copy and creative to produce better engagement and more opportunities from prospects in your market.  These strategies are currently in place and our team is working diligently to analyze and proactively optimize strategies to maximize the effectiveness of your marketing. 

For more information, please follow the sources below for up-to-date reports:

 🔶 How Many Political Ads Does $7 Billion Buy? We’re About to Find Out. (Kantar)
🔶 Campaign Ad Spending 2020: What’s Your Number? (Inside Elections with Nathan L. Gonzales) 
🔶  Cost Of Election (Center for Responsive Politics)  
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