How the Midterms Will Change Political Ad Spending Forever

Illustration of coins with political party logos embossed on them
Cheyne Gateley/VIP+

The highly anticipated — and contentious — midterm elections are finally upon us. 

And with the amount of money spent on political advertisements this cycle, you would think it was a presidential election year. According to projections by ad intelligence company AdImpact, the 2022 political cycle is poised to be the most expensive on record, set to outpace the 2020 presidential election. 

Not only are these midterm elections set to be the most expensive on record, but they could also mark a major shift in long-term trends in political ad spending.  

While political ads across broadcast and cable represent the majority of the pie, digital advertising, particularly on Google and Facebook, has grown monumentally over the past few years. In its early days, digital political advertising grew in influence because of the ability to deliver targeted ads and reach younger voters. But it was the wild West, and the lack of regulation and proper monitoring caused widespread misinformation during the 2016 presidential election. 

The drama put a big target on the backs of Big Tech as government officials began digging into regulation of platforms. As a result, some Big Tech companies — TikTok, Twitter, LinkedIn, to name a few — decided to outright ban political ads on their platforms.  

Google and Facebook became the default destination among social media platforms in the aftermath. Despite Facebook’s election misinformation scandal, political campaigns still opted to advertise on its family of apps due to their reach, and Facebook comfortably collected the money.

While Google and Meta do allow political ads on their platforms, Google announced in late 2019 it would be limiting the political ad targeting to specific criteria across Google and YouTube, and in 2021 Facebook announced similar restrictions. 

According to AdImpact, digital political ad spend in October was on pace to possibly double October 2021’s peak of $26 million on Facebook and $10 million on Google. However, Facebook’s dominance as the leading destination for political ad spend is slipping and could be the start of a downward trend for the social media giant. 

In August, political ad spend on Google surpassed Facebook for the first time and was the largest source of digital spending since AdImpact began tracking the data. Spending on Google totaled $26.43 million in August and $25.65 million on Facebook. Then in September, spending on Facebook plateaued, while Google added another $16 million, bringing its monthly total to $46 million. 

All this is not to say the benefit of being the leading source of digital political ads was because it made a meaningful impact on a company’s topline. It’s hardly a big contributor to revenue, but it illustrates the overall influence and relevance of an app or platform in society. Much to CEO Zuck’s dismay, Meta's relevance has been on the decline thanks to competition from apps like TikTok.  

If this midterm election cycle is any indication of the broader trends in digital advertising, the future opportunity lies in connected TV. With all the difficulties with social media, connected TV is still in major growth mode, with all the same benefits as social such as the ability to target audiences and reach younger audiences. And most compelling of all, CTV is largely unregulated, unlike social media and search engines. 

Data analytics firm Kantar estimated political advertisements on connected TV would reach $1.4 billion this election cycle, compared with $1.2 billion across Facebook and Google. 

The divergence will likely persist, and Facebook is poised to be the biggest loser. Google could very well face a similar fate, but for now, it appears to be stealing share from its rival.  

But that doesn’t mean there aren’t consequences to acquiring that much political advertising power. Much like what happened with Big Tech, streaming and specifically CTV could ultimately become a regulation target if its influence continues to ratchet higher.