Jan 25

Written by: Insights Account
1/25/2012 7:36 PM

By Cary Hatch, MDB Communications

With the 2012 presidential election, the summer Olympics and emerging positive economic growth on the horizon, the advertising industry is expected to experience exponential growth. Importantly, these events bring new advertising opportunities, which many advertisers are bound to capitalize on now. Today, the economy is in a much healthier state than it was back in 2008 and 2009, and companies are reinvesting in their advertising efforts. These developments will undoubtedly give rise to increased advertising spending, which will positively affect the local economy in Washington, DC, and the nation at large.

Many of us will soon be seeking shelter from the throng of repetitive presidential ads – there’s also the silver lining of political spending that will favorably impact many a media outlet’s bottom line in 2012. Given the 2010 Supreme Court ruling, allowing Super PACs (Political Action Committees), to spend an unrestricted amount of money for political campaigns there is a virtually unlimited flow of media investments to be made. By the end of December 2011, USA Today reported that candidate-specific PACs spent more than $6.8 million already.

Spending for the 2012 presidential election is forecasted to be higher than ever before; today, spending for the 2012 presidential election has already reached $23 million, and is expected to grow to $4.9 billion, with $2.8 billion of that total being spent on broadcast advertising alone. Compared to the 2008 election, that is a 522 percent increase in dollars spent on broadcast media for political advertising.

While the election will have a major impact on advertising spending in the U.S., this summer’s Olympic Games will also be a large contributing factor. According to Brian Wieser, senior research analyst at Pivotal Research Group, advertising will grow one percent in the U.S., separate from the election and the Olympics. Because these special events are occurring this year, spending is actually predicted to grow 2.5 percent in 2012.

Many brands have already rolled out marketing campaigns for the 2012 Summer Olympics in London, in anticipation of the heightened brand exposure. Back in September 2011, Coca-Cola launched a global marketing campaign that centered on the Olympics. British Airways, the official airline of the Olympics, started their campaign in May 2011 to promote their $64 million sponsorship. These unusually long campaigns target events leading up to the Olympics in addition to the actual Olympic Games.

While television remains the most prominent advertising channel of choice, eMarketer predicts that online advertising will surpass print advertising in 2012. According to the company, online ad spending rose 23 percent in 2011 to $32 billion, and should grow another 23 percent to $39.5 billion this year. In addition, television is expected to increase 6.8 percent from 2011 to $64.8 billion. eMarketers expect that these drastic upticks are, "driven [by] the Olympics and elections -- while remaining resilient from worries about the soft economy."

Based on the projected increase in revenue for 2012, stemming from the election and the Olympics, DC stands to benefit quite a bit. “We expect the political spend in this market to be about $35-40M, lifting the overall market by 8-10%” stated Jackie Bradford, president and general manager, NBC4. The upcoming election alone will cause a trickle-down-effect starting with the increased revenue to local stations and production houses to post-election 2013 inaugural plans which will increase traffic to local retailers, restaurants, hotels, and tourism. These events are bound to make 2012 an exciting and profitable year for advertising, and Washington, DC will be one of the beneficiaries. Finally.

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