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Aug

05


2010

The New Media Mix: 76% TV & Radio, 24% Online

Patrick Ruffini

Patrick Ruffini

You don’t have to be an aficionado of the Old Spice social media campaign to understand that online marketing moves numbers. Yet the question of how much a campaign or advocacy effort should devote to online advertising remains more art than science, with large digital campaigns in the political space still a relative rarity. In the 2008 election cycle, political advertisers spent 1.6% of their budgets online, according to a postelection report from the Institute for Politics, Democracy, and the Internet. Even the Obama campaign, known for its sophisticated use of digital tools, only committed 4% of its media pie to online ads (granted, it was a large pie). Lately, the trendsetters have been on the Republican side, with Bob McDonnell’s campaign committing 7% of their media budget to digital efforts (see Engage’s case study) and Scott Brown’s winning effort earlier this year devoting 10%.

Right off the bat, skeptics might point out that these candidates were online rockstars with flush budgets who could afford to advertise online, which itself betrays another myth of online media: that it’s only for big campaigns that can afford it.

If that were so, only the most expensive luxury brands would advertise online. But in fact, online as a share of all advertising in the United States just cracked 10% this year (it’s estimated to be 10.5% in 2010). That includes both the Old Spices of the world and the mom-and-pop shops who depend on search ads to drive sales leads. This chart on online ad spending by medium published late last year by the Business Insider is an eye-opener, and we’ve visualized it below:

<img src=”http://farm5.static.flickr.com/4101/4863341224_b4b64ae4ac.jpg”>

Unpack these numbers a bit more, and you realize that 10% is just the start.

Many advertising mediums above — think the yellow pages, billboards, magazines, and (by and large) newspapers — haven’t traditionally been good fits for political campaigns. Other mediums, like direct mail, TV, radio, and now the Internet, have gained currency as the advertising mediums of choice for politics.

What does the pie look like with just these communications channels? Direct mail comes in first at 33.2%, followed by 23.4% for broadcast TV, 17.6% for cable TV, 16.1% for online, and 10.1% for radio.

Direct mail certainly has many uses in campaigns — from fundraising to voter contact — but many campaigns don’t consider it to be inside the typical “media budget” — the lion’s share of the campaign kitty reserved largely for TV and other electronic forms of communications at the end of the campaign. So, if mail is broken out, the breakdown of electronic media is 35% broadcast, 25.7% cable, 24.1% online, and 15.2% radio.

<img src=”http://farm5.static.flickr.com/4137/4862719343_3f3ddfe768.jpg”>

That’s 75.9% spent on traditional advertising formats, 24.1% spent online. For every $1 all advertisers in the United States are spending online in 2010, they spend $2.52 on television. In politics, that figure is anywhere from $30 to $50 spent on TV for every dollar spent online. That’s a 15-fold difference. Isn’t something out of whack here?

What do big advertisers with billions on the line know that political advertisers don’t? That digital advertising is remarkably cost-effective. You don’t need to spend as much to get the same reach, making the medium appealing to candidates for any office.

When deciding to make the leap to online, you need metrics you can easily understand. And in this respect, the terms commonly used by the online advertising industry — CPC, CPM, share of voice (SOV) — don’t do a very good job of answering the fundamental questions: how many voters does this let me reach and how many times will they see my ad?

At Engage, we use a metric we call Online Ratings Points so you can get a better sense of the cost-effectiveness and reach of online advertising relative to traditional media. The calculation behind it is pretty simple:

Online Ratings Points = ( Number of ad impressions / number of unique visitors on your target sites) x 100

When you’ve bought 1,000 “points” on TV, that means that the average viewer has seen at least part of your ad ten times. (Admittedly, it’s a fuzzy metric given the extent to which people channel surf during commercial breaks, tune out advertising, or just skip the ads using TiVo or other DVR platform, but the bottom line is that to make an impact, repetition is key.) Similarly, 1,000 points online ensures that your target audience will be exposed to your ad online an average of 10 times.

The beauty of online advertising, however, is in its unmatched ability to target. Not all online ads are created equal — from targeting specific websites frequented by political activists, to targeting those searching for you or visiting sites that talk about you (the Google approach), to going after individuals with specific interests or demographic characteristics in a geographic region (Facebook and behavioral targeting), to re-targeting those who have already visited your website, to a broad-based “network blast” of all sites in a network. And it’s not just demographic targeting, but geographic targeting: your ads can be targeted precisely inside a state or Congressional district with minimal bleed to people who can never vote for you.

To illustrate the point, let’s take the example of a hypothetical Congressional race in a district inside in the Denver, Colorado media market and ask what it would cost to get 2,000 “points” (or 20 impressions per voter) on the air or online? The difference, you’ll see, is pretty stark.

<iframe width=’560′ height=’400′ frameborder=’0′ src=’http://spreadsheets.google.com/pub?key=0AmrP4nEyF0AZdEhFaW9uNXpuaHhYUUsxWjFhNkpNekE&authkey=CKHWoawE&hl=en&output=html&widget=true’></iframe>

Not only are online ads four times cheaper than TV — a $4 CPM is actually on the high side of the range — but it takes one quarter of the impressions to reach a targeted voter 20 times because of the “bleed” into other areas of a district — a common problem in a country with 435 Congressional districts but only 210 media markets. That means it’s 15 times cheaper to get the same amount of impressions to targeted voters online as you would on TV. One might say that a banner ad is not as immersive and hard-hitting as video advertising delivered through the medium of television, but as free market capitalists, we can probably agree that the difference is fairly reflected in the price.

None of this is to diminish the enduring power of television. Even those of us who rarely watch television would agree that video advertising is powerful, even online — just look at the success of YouTube. But at the end of the day, this is 2010. The world is changing. Average Americans are already spending more time online than in front of the tube. It’s getting easier and easier to block out TV ads, and the Internet itself is changing how we spend time. If just 10% of the population are tuning out your ads because the technology makes it really easy for them to do, that’s 10% of voters you need to reach some other way. The shift doesn’t have to be all-or-nothing to be significant. Ask the record companies and Barnes and Noble what a shift of (maybe) 10% of their industry to digital has done to their business.

In light of all this, is it unreasonable to ask for a smart and balanced media strategy that reaches voters wherever they are — whether that’s their television, their computer, their cell phone, or their mailbox — and does so commensurate with the amount of time voters invest in each of these channels?

Here’s a real-life role-play: After 2,000 or 3,000 points of saturation advertising in the final two weeks, when you’ve likely hit a point of diminishing returns, would it be smarter to invest in 200 or 300 more points on TV — or saturate the online space with 2,000 or 3,000 points of advertising and own the medium before your opponent does?

But even this example is in-apt — you shouldn’t be doing online after you do TV. It should be ingrained in your media strategy, and baked into your budget at a fixed percentage so it rises and falls with the amount you have to spend on voter engagement.

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    2010-09-11 23:45:00

    Great article, very insightful

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  • Rich Masterson

    2010-08-06 16:35:37

    Great piece, insightful and well reasoned. We should be partnering more-