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Presidential election boosts US adspend

News, 12 September 2016

NEW YORK: Advertising expenditure linked to the presidential election promises to inject an extra $7.5bn into the US ad market this year, a new study suggests.

Carat – the media agency owned by Dentsu Aegis Network – believes that total adspend in the United States should hit $204.8bn in 2016, an increase of 5% compared with the previous 12 months.

More specifically, Carat revised growth expectations upwards from the 4.7% it predicted in a similar piece of research published during March 2016.

And the company attributed this favourable trend in no small part to the presidential showdown culminating in a contest between Hillary Clinton and Donald Trump at the ballot box.

"Growth in the US is fuelled by the upcoming US presidential elections, accounting for approximately US$7.5bn of additional spend," its report said.

Television, particularly at the local level, is likely to benefit from this process, claiming roughly 70% of the extra funds invested in ads during the battle for the White House.

More broadly, the US ad market has been boosted by the Olympics and Paralympics in Brazil, although the incremental revenue resulting from these events stood at a more modest $1.3bn.

Television adspend is anticipated to improve by 4% on an annual basis in 2016 overall, while digital is projected to witness a 16.7% increase, driven by demand for video, mobile and social-media advertising.

Looking further ahead, Carat predicts that – "despite the lack of major media events" – the US advertising market as a whole will register an uptick of 3.8% in 2017, with TV revenues expanding by 2%, a figure reaching 14% for digital.

In its latest forecast, Warc predicted that US adspend will rise by 5.8% this year, but grow by less than half that amount in 2017.

Data sourced from Carat; additional content by Warc staff