How the upcoming election season will impact Australia’s media spend

Does election season really have an impact on ad spend and consumer behaviour? If so, what should media buyers do about it? The Media Store's Alison White digs into the numbers.

You don’t need to be in the race to be affected by the upcoming Federal election. Throw a budget and a state election into the mix and that’s a crazy few months for the Australian media industry.

What impact does a Federal election have on consumer spending?

A study conducted during the 2016 federal election by QUT concludes that, although it has traditionally been suggested that uncertainty surrounding an election might slow consumer (retail) spending, there is little evidence both in Australia and globally to support this. Rather, retailers often look for a scapegoat for lower than forecast sales and often pin it on an election as an external factor. This research was corroborated by the University of Chicago and Princeton in the US which both found that elections have minimal impact on how consumers actually spend.

There may be more impact, however, when looking specifically at big ticket items like real estate and cars. Consumers may take a “wait-and-see” approach until they understand the impact of the election and then spending typically bounces back. The property market may see longer lasting impact based on the scale of the purchase.
On the other hand, some sectors of the population actually increase spending when they anticipate a favourable result in the polls.

Overview of the policies of the two main parties:

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Overall, how do political events affect consumer confidence?

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How does an election impact brands?

With dips in confidence, should you halt spending? Broadly speaking, no, whilst confidence is temporarily affected, spending continues to climb seemingly unaffected by the confidence drop.

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Brands, however, will be affected by the upcoming budget and Federal election, just not in the consumer space. Impact will be felt most significantly in the commercial media space with an increase in government spending blocking out inventory therefore forcing brands into leftover, inefficient placements.

During the 2016 election the majority of spending was in the three weeks leading up to the election, with 75% of all ad spending in the final two weeks and we would expect this to play out again this year with parties wanting to impact voters just before they head to the polls.

It’s important to note that election blackouts are in place from the end of Wednesday before polling to the close of the polls. The blackout, however, does not extend to online and print advertising, so expect to see a heavy digital presence in the last few days before polling.

It’s not just the government that are spending though. In June 2016 during the last Federal election in we saw a small drop in overall spending by non-government categories, the overall market, however was up due to the increased political spending.

The biggest spending drops were in automotive brand and food/produce/dairy, however, even with a drop they still were #2 and #5 in total television spend for June 2016.

So how can you election proof your media spend?

Plan ahead and buy early to secure premium placements

Once the Federal election is called, there will be a surge in bookings. Leaving your buy too late will result in cost inefficiencies due to the additional demand and limited supply. Planning early will ensure you can pick up premium placements to capitalise on the hype or align with your strategy.

Optimise retargeting tactics to cut through the noise

With more noise, a targeted approach is more important than ever. Minimise wastage by getting the right customer at the right time. Also ensure your owned channels are working hard for you during this time.

Plan content and channels carefully to cut through during peak times

Timing and strategy will be the recipe for success here. Historical campaigns, plus the nature of political media budgets tell us there will be a surge of advertising in the two to three weeks leading up to the Federal election. All signs are pointing toward a late May election, so bear this in mind when planning. Take into account the blackout dates where live news will be delivering engagement and ensure your message is relevant and impactful.

Alison White is The Media Store’s research and insights manager.


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