No Vacancy: The Web Is About to Run Out of Room for Political Ads

by InvestorPlace Staff | August 2, 2012 11:13 am

[1]The Internet may seem like a vast, almost infinite galaxy of cute cat pictures, Facebook messages, and breaking news. In one area of the Internet, though, space is at a premium.

What area is that? Political advertising. More specifically, political advertising tacked onto videos[2] from certain web sites.

Why is there limited space for political ads on YouTube and its video brethren? It’s a simple case of supply and demand. Demand for video ads, which typically run for 15 or 30 seconds before the video a user actually wants to see is shown, is higher than supply. In particular, these sites let advertisers buy spots that target users by zip code or category. That means ads aimed at users in swing states, or for users interested in news and politics, are harder to come by.

The end result is campaigns are buying chunks of time on these sites months in advance, at lower rates. Some sites will only sell so much advertising time, locking out campaigns that didn’t plan ahead. Others will sell advertising as it becomes available in real time, which is more expensive. Experts predict the cost for running online video ads in late October in swing states could be three times the normal rate.

The scarcity in video advertising is another side effect of the estimated $3 billion[3] being poured in campaigns this fall. TV advertising inventory is essentially depleted, and only so much direct mail can be sent out, so online video ads became the next best thing for campaigns to spend on.

For more information, check out this Politico blog post[4].

— Benjamin Nanamaker, InvestorPlace Money & Politics Editor

The opinions contained in this column are solely those of the writer.

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