How the Election is expected to impacts advertising costs

Q4 will be a significant time for many of our advertisers. This Q4 is going to look a little different given the U.S Presidential Election will be occurring at the start of November, 3 weeks before the biggest shopping period in the US. 

Based on an in-depth analysis and past Meta data, here’s what we can expect and how we're preparing our advertisers to navigate this particular period. 

What to Expect

Election Year Impact on CPMs - 2020 Historical Performance 

To understand what we might see during this election period, we looked at 2020 data for our clients. Understandably, 2020 was a unique year for many reasons, we still wanted to utilize this data to get a sense of how advertising costs (CPMs) and intent (CTR & CR) could look. 

In 2020, there was a slight increase in CPM leading up to the week of the election, which aligns with 2020 data of political advertisers spending the most 30 days before the election. However, the increase was not markedly significant (around 13%). During the week of the election, our advertisers saw CPMs decrease by 18%, with ad spend for our clients reducing by 29%. During this period, CTR & CR also experienced a downturn, particularly in the week before the election and decreased further the week of the election. 

After the election, CPMs are expected to rebound swiftly, with a projected 25% increase as advertisers re-enter the market. This surge will continue into the BFCM period, a critical time for advertisers. In 2020, CPMs spiked significantly during this period, and a similar trend is expected this year, with heightened competition for consumer attention driving up costs.

Election Year Impact on CPMs - 2024 Analysis 

Based on 2020’s data, we modeled what 2024 CPMs could look like by taking 2020’s trend line & YTD CPMs. From this, we expect CPMs to decrease by 19% going into the week of the election, and increase by 25% for BFCM. Cyber Monday will also be in December, making this a shorter holiday shopping season post-Thanksgiving. 

Potential Ad Disapprovals and Policy Flags

An additional challenge during this election season relates to ad disapprovals and policy flags, particularly for advertisers in sensitive sectors. During the last election, healthcare advertisers and those focusing on sustainability and environmental issues experienced higher rates of ad disapprovals and policy flags. This was primarily due to Meta’s policies around “social issues” advertising. In 2024, we anticipate a similar scrutiny, which could impact advertisers in these categories.

How to Prepare

1. Prepare for the Post-Election Rebound

Once the election is over, CPMs are expected to rise rapidly. Advertisers should be ready to adjust their budgets and strategies to account for this increase, with a focus on filling their funnel for the upcoming promotional period. Monitoring performance closely and optimizing campaigns in real-time will be crucial to maintaining efficiency. 

2. Strategize for BFCM Success

The BFCM period is critical for most businesses, regardless of whether or not it’s an election year. However, given the election is anticipated to slow down intent, and the shorter holiday period following Cyber Monday, strategize a sales cadence that’ll help you hit your targets. Consider starting sales earlier, and avoid sales fatigue by utilizing diversified sales tactics, leading up to the biggest promotion when shopping intent will be the highest (aka BFCM weekend).

3. Address Ad Disapprovals and Policy Flags

Double-check whether or not you’ll be flagged for “social issues” even if your content isn’t political. Meta categorizes certain topics, including healthcare and environmental messaging, as social issues, which may require additional steps to ensure compliance (linking Meta’s social issue resource). This might include verifying your identity, understanding policy guidelines, and obtaining the necessary authorizations to run ads. Reach out to your Meta representative to figure out the best next steps for your individual accounts.

4. Control Where Your Ads Are Placed

For those concerned about ad placement, Meta offers various options to control where ads appear. It’s advisable to discuss these options directly with your clients, ensuring their brand’s safety and aligning placements with their values.

Linking the following resources to learn more about Brand Suitability controls:

• Inventory Filter: Allows you to control the sensitivity level of the content that your ads appear within or adjacent to. 
• Publisher Allow Lists: Allows you to provide a list of publishers you’ve approved to display your ads on for Audience Network & Facebook in-stream video.
• Block List: Stop your ads from appearing on Pages, profiles, and apps you don’t consider suitable for your brand or campaign.
• Topic Exclusion: Allow your Facebook in-stream video ads to not show up under certain topics.

Conclusion

2024 presents a complex landscape for digital advertisers, with the U.S. election and BFCM season likely to create fluctuations in CPMs and demand. By anticipating these changes and preparing accordingly, advertisers can navigate these challenges effectively, ensuring that their campaigns continue to deliver strong results. Staying informed, agile, and proactive will be key to success in this dynamic environment.

Linking additional resources we’ve found helpful in planning for Q4.