Midterm-Election Ad Spending Poised to Soar as Streaming TV Attracts Campaigns

AdImpact, a firm based just outside Washington, says in a report first shared with The Wall Street Journal that it expects ad spending to at least match the record amount spent during the 2019-20 election cycle, even though there will be no presidential contest on the ballot.

The higher spending is expected to be fueled by online fundraising that has made more dollars accessible to more candidates.

“ Facebook, when used as a fundraising tool, has allowed campaigns to quickly and easily reach a highly polarized electorate,” the report says. “This, combined with the rise of easy online donation tools such as ActBlue and WinRed, has allowed candidates and issue groups to fundraise with greater ease than ever before.”

AdImpact’s estimates were generated by building a projected spending model for each race that factored in the competitiveness of a seat, past spending levels and the varying costs of different media markets. The firm’s totals don’t include some other forms of political communication, such as direct mail and campaign voice calls via telephone.

“These projections will also likely change as the landscape changes,” the report says. “Unexpected retirements, strong fundraising, redistricting, and changes in the political winds can and will cause the landscape to shift.”

AdImpact says it expects connected TV platforms will host almost $1.5 billion in political ads between now and November 2022, representing roughly one in six dollars spent.

Campaigns are increasingly gravitating to the streaming platforms because ad placement there is more efficient than on traditional broadcast TV and specific voter groups and geographic areas are more easily targeted. “It has the benefit of microtargeting, and it still appears on the big screen,” said Kyle Roberts, AdImpact’s chief executive.

AdImpact predicts more than $4 billion will be spent on House and Senate races, while $2.3 billion will go to elections for governor in the 38 states holding contests this year and next. A further $2.5 billion is expected to be spent on down-ballot races.

The expected surge in spending reflects the large number of races for governor as well as the high stakes faced by both parties and special interests trying to influence the first midterm election of Democrat Joe Biden’s presidency. Republicans will be able to bring his agenda to a dead stop if they can win control of at least one chamber of Congress.

Members of the GOP are optimistic because the party that doesn’t control the White House typically makes gains in midterm elections. The Senate is currently split 50-50, with Democratic Vice President Kamala Harris casting the tiebreaking vote, while Democrats hold a razor-thin, four-seat majority in the House.

The Senate race in Georgia, where incumbent Democrat Raphael Warnock faces re-election in 2022, is expected to account for close to a quarter-billion dollars in ad spending, AdImpact said. Open seats in Pennsylvania and North Carolina are also forecast to attract significant spending.

Georgia will also host a high-profile race for governor in 2022, with GOP Gov. Brian Kemp seeking another term in a state Mr. Biden narrowly won in November. Mr. Kemp has drawn the ire of Donald Trump for what the former president has argued was insufficient help in trying to overturn the election results. AdImpact projects $235 million will be spent on the race.

Even with the growth of digital advertising, broadcast TV remains the dominant platform for political ads. The almost $4.6 billion projected by AdImpact for local TV stations in the 2021-22 cycle would represent an almost 54% increase from the last midterm election cycle.

“Campaigns still find it effective,” Mr. Roberts said. “It’s good for the broadcast industry, there is no question about it.”

Write to John McCormick at [email protected]