Photo via Joshua Earle on unsplash.com
published on September 5, 2024 – 2:41 PM
Written by Frank Lopez
With just about two months to go until the presidential election — and all the noise that comes with it — small business owners might be hanging on to their advertising money during the election cycle.
While the business landscape has been shaken by COVID-19 pandemic, every four years, there is a more political disruption through every facet of society, including business.
Paired with inflation, rising insurance rates and economic and political uncertainty, the advertising space taken over by political campaigns doesn’t necessarily drive consumer behavior. Business owners take notice.
Eric McCormick, president of McCormick Marketing in Fresno, said that the political window and uncertainty about which party will get elected doesn’t completely stop sales, but it softens, and that’s all it takes for small business owners to pull back on spending for advertising.
“People feel uncertainty, and sales start going only one direction, and they are starting to see a trend and then they just start to pull back,” McCormick said.
He said Baby Boomers are most susceptible to elections — with their income, taxes and Social Security on the line. They tend to cut spending first.
However, the pent-up demand leads to a bump in consumer spending right after the election, especially during the holiday season, leaving business owners more confident to spend on marketing.
Business owners might not just cut back on their advertising spending, but also on employee hours and other business investments.
During an uncertain political window, consumers start spending less on luxury goods, going out to restaurants, and other unnecessary items, McCormick said.
Because political campaigns bombard the online space, as well as television, the advertising rates increase, and since business owners don’t want to compete, they cut back on their spending, he said.
The proliferation of social media has led business owners to understand that people are on their phones for considerable lengths of time, and that they have to a good social media content strategy, which is not easy or inexpensive for small businesses.
“Most businesses who see the value there have to hire a full-time content creator, which takes a special skill. It has to be either someone in house or they’re having to outsource to another agency, and that work takes a lot of hours,” McCormick said.
He said that advertising and media have become so fragmented, with the media options of the past either television or radio. Now business owners now have at least five platforms to maintain a presence in.
McCormick said that over the last year he has seen many advertisers question how much they are putting into their social media, and if they are getting their return, which many feel they aren’t.
He has noticed a trend back to advertising in radio and billboards, especially as more people are cancelling their subscription services such as SiriusXm.
While McCormick advises business owners to have their own advertising agents creating and posting content consistently, the businesses should be involved in the process.
He added that advertising in the year after an election is always a good idea, as ad rates go down and consumer spending increases.
PREM-PR & Social CEO and Creative Director Marilyn Cowley said that during the election cycle, costs for online clicks and impressions skyrocket, leading clients to asks why their ad rates are going up.
“I tell them there are billions of more dollars being spent right now, and they are going after your target audience, they are blanketing the whole U.S.,” Cowley said.
She said businesses will tend to cut their spending on all fronts, but she’s seeing more budget trimming on social media ads, Google ads and television advertising.
Since ad spending goes down, there is more emphasis on email marketing, or spending more on digital fronts, or trying to get creative to prepare to launch right after the election season.
She has noticed clients cutting back their spending on marketing in around May, earlier than the previous election.
While it may be a down economic year, Cowley advises her clients to not completely stop spending on advertising because consumers will forget about their businesses when the economy picks up.
“Your customers will remember you, and if you were smart with your money in the last three or four good years we had before this downturn, you’ll have money to spend,” she said.
To help their clients remember their presence in the market, business owners might be marketing about a month before the election is over to be the first thing that people think of, including in the real estate industry.
Brandon Gonzales, broker/owner of Iron Key Real Estate in Fresno, said that he likes to have some foresight and advertise when homebuyers are ready to decide.
“That message has been going out there and when they need to make a decision, they see it and you come to the top of their mind,” Gonzales said.
