Cord cutters prepare for political ad blitz as campaigns flood Roku, Hulu ahead of election
Vice President Kamala Harris, left, and former President Donald Trump
Reuters
Consumers who cut their cable cord in recent years are finding that there’s one thing about linear TV they can’t escape: political ads.
With the U.S. presidential election less than 70 days away, campaigns are swarming streaming services like Roku and Hulu to such a degree that connected TVs are seeing more ad spending than internet platforms such as Facebook and Google.
That’s according to data provided to CNBC by political ad analytics firm AdImpact, which started tracking the connected TV (CTV) category in 2022. AdImpact projected that the CTV market brought in about $236 million in ad sales related to the presidential race this year through Aug. 23. The digital category brought in just under $235 million during the same time, AdImpact said, with Facebook and Google accounting for almost all of it.
“CTV is where there is more engagement,” said Jaime Vasil Winkelfoos, the group vice president of candidates and causes at ad tech firm Basis Technologies. “When voters say they are watching TV, they don’t’ say ‘I’m watching broadcast.”
That trend, Winkelfoos said, is “important for political campaigns when allocating budgets.”
Still, while more money is flowing to streaming services, the total amount is dwarfed by traditional broadcast television.
AdImpact currently projects that overall political ad spending for the 2024 election cycle will be as high as $10.7 billion. Broadcast will account for roughly half, followed by CTV at around 14% and digital at close to 12%. According to a report last week from eMarketer, CTV’s share of spending this election will surge to 13% from 2.7% in the last presidential cycle.
Broadcast brought in about $473 million from early January through Aug. 23. That’s down from $875 million during the same time period of 2020, underscoring CTV’s rapid rise.
Meanwhile, overall election-related spending on Facebook and Google has declined by more than half from 2020, when political ads on those two platforms hit $480 million from Jan. 1 through Aug. 23. The steep drop is mostly because that election featured a competitive Democratic primary with one particular candidate — Mike Bloomberg — spending an enormous amount of money on ads.
“That flowed to direct ads and it benefited Meta and Google specifically,” said Eric Haggstrom, vice president of business intelligence at Advertiser Perceptions.
Streaming services have not only become increasingly popular for consumers in the last few years, but they’ve also opened up new ad-based services. Netflix, for example, first introduced its ad-supported subscription plan in late 2022 as part of a wider effort to drive revenue amid slowing subscriber growth. Netflix doesn’t yet accept political ads.
Winkelfoos said there’s now more available advertising inventory available on CTV than ever, coinciding with the market’s growth. One nuance in the AdImpact data is that Google’s YouTube video service is in the digital category, while YouTube TV is part of CTV.
AdImpact noted that it provides estimates for the amount of political ad spending on CTV, because those platforms aren’t subject to the Federal Communications Commission’s rules that require traditional TV operators to report certain political ad information. Facebook and Google, like CTV platforms, aren’t subject to the FCC rules, but they disclose some political ad data.
A Meta spokesperson declined to comment, but pointed to remarks made by CFO Susan Li in February, when she said political advertising is “not really a material contributor to revenue growth for us.”
“Even during our last U.S. presidential election cycle in 2020, the government and politics vertical was not among our top 10 verticals either globally or in the U.S.,” Li said at the time.
For CTV users, especially in swing states, the ad blitz is about to hit hard. Robin Porter, the head of political for ad company LoopMe, said that 60% to 70% of spending typically comes after Labor Day, which is this coming Monday.
Prospective voters can expect to see a lot of ads for Vice President Kamala Harris. Earlier this month, the Democratic nominee announced plans to spend $370 million in a fall advertising rush. The campaign reserved $200 million worth of ad space across streaming platforms like Hulu, Roku and Pandora as part of its strategy to reach U.S. consumers.
“There is more upfront spend, especially in CTV, to secure the inventory upfront, even compared to 2022,” Porter said.
In her home state of Georgia, Porter said there’s been a big push by both presidential campaigns to secure post-Labor Day ad space on both CTV and linear broadcasting. With its 16 electoral votes, Georgia is viewed as a critical battleground in the race to secure the 270 electoral votes needed to win the election.
Winkelfoos said the Harris campaign’s announcement regarding its ad plans, which landed just days before this month’s Democratic National Convention, was huge for the industry.
“We haven’t had that big national moment related to big spending until Kamala,” said Winkelfoos.
WATCH: Mark Zuckerberg says White House ‘pressured’ Meta to ‘censor’ Covid-19 content.
Technology
Amazon was questioned by House China committee over ‘dangerous and unwise’ TikTok partnership
Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
— CNBC’s Jonathan Vanian contributed to this report.
Technology
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Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.
Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.
Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.
“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.
“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.
“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”
Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal.
Horacio Villalobos | Getty Images News | Getty Images
Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.
“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.
‘No longer secrecy versus transparency’
Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.
She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.
Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”
She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”
Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.
“It’s no longer secrecy versus transparency,” she added.
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