Election ad spending caused prices to surge, forcing brands elsewhere

The news: The glut of ad spending from the 2024 US election has caused CPMs (the cost to reach 1,000 viewers) to surge on ad channels like TV, forcing some advertisers to seek alternatives to avoid high prices and being drowned out.

• The Wall Street Journal interviewed six brands, some of whom said ad costs on Facebook and Instagram doubled or tripled in the final weeks of the election as candidates spent millions to reach voters.
• TV ad costs in swing states also surged, causing some brands to target areas that weren’t in contention. Others have diverted spending to Amazon, which they said is a reliable channel when costs get too high elsewhere.
• Others, like a home fitness brand that largely advertises on connected TVs, stuck with the competitive channels and instead tweaked their brand messaging to cut through the noise of election advertising.

Roundabout gains: The US election is expected to contribute a record $12 billion to the US ad market this year. Much of the focus has been on which platforms will benefit from the sharp spending increase, but rising competition for ad space is also causing brands to experiment with their strategies.

• Amazon and other retail media networks are not hubs for election ad spending, but the high costs on other channels could encourage advertisers to test unfamiliar ad ecosystems. That dynamic could help forge relationships that extend beyond the election season and make these secondary platforms more consistent parts of ad budgets.
• But as the election winds down, spending is likely to return to Instagram, Facebook, and other ad channels affected by the campaign ad surge due to their proven results and, in the case of Meta’s platforms, unparalleled reach.

Our take: Final votes in the 2024 election will be cast tomorrow, bringing an end to a season that brought unprecedented billions to the ad industry. Digital ad channels will see some return to normalcy, but election spending also mirrored broader shifts in the ad industry, such as linear TV ceding more ground to connected TVs.