YouTube Tries to Wrest Campaign Ad Dollars From Facebook and Local TV

A screen capture from a campaign ad for President Trump that appeared recently on YouTube.

Around 3 a.m. on a recent Tuesday, campaign staffers for several Democratic presidential candidates powered up their computers in an effort to beat out rivals and book crucial ad space for the weeks before the Iowa caucuses and the New Hampshire primary.

The reason for the early-morning rush: A new tool from YouTube had just gone live. For the first time it gave political buyers and others an automated way to reserve ad slots on the popular video platform, and many rushed to lock in time as far ahead as the end of February.

“People acted quickly with what was available,” said a staffer for one of the Democratic front-runners, who added that the campaign snatched up slots in early voting states such as Iowa and South Carolina.

Already a big destination for digital ads, YouTube—a unit of Alphabet Inc. GOOG -0.11% ’s Google—is stepping up its efforts to snag more political-ad dollars away from local television and Facebook Inc. The YouTube initiatives aim to take advantage of the growing sums being spent on advertising by a historically large field of presidential candidates.

YouTube’s new Instant Reserve tool borrows a tactic from the traditional TV business, where advertisers can often book ad time months in advance to lock in slots in the best programming at discounted rates. Before the tool was launched on Sept. 3, campaigns had to coordinate with salespeople to book ad slots, a more cumbersome process.

YouTube is expected to take in about $11.38 billion in global ad revenue this year, according to a forecast by research firm eMarketer, a 20% increase from a year earlier. Google doesn’t say how much YouTube contributes to its total ad revenue, which was $116.3 billion last year.

A Google spokeswoman said the company is currently testing the tool with political advertisers as well as hundreds of others, including media and consumer-goods companies. Political ads are subject to additional scrutiny, from verifying the buyer’s identity to embedding a disclosure in the spot stating who paid for the ad, the spokeswoman said.

A screen capture from a campaign ad for Massachusetts Sen. Elizabeth Warren that appeared recently on YouTube.

Local TV ads have long been an important way to reach voters in crucial states—and still are. Political TV ad spending is expected to reach $4.78 billion in 2020, compared with $2.85 billion for online and digital political ads, according to recent forecasts from Borrell Associates Inc., a marketing research firm.

YouTube allows far more targeted advertising than traditional TV. A YouTube ad can, for instance, be made to appear exclusively ahead of videos viewed by people identified as left-leaning voters in Polk County, Iowa, days before the Feb. 3 caucuses, media buyers said.

At the same time, YouTube’s history of controversies in which advertisements run alongside violent or otherwise objectionable content has been a concern for political-ad buyers.

President Trump and the nearly 20 Democrats running for president have so far spent $21.8 million on Google and $43.5 million on Facebook, according to the most recent data analyzed by Acronym, a progressive nonprofit that tracks digital spending.

Presidential hopefuls’ campaigns have been pouring dollars into Facebook ads designed to spur viewers to donate or join campaigns’ email lists. As the actual voting gets nearer, campaigns tend to shift their advertising to video spots, which are seen as a better tool to persuade voters and get out the vote, media buyers said.

Google has been eager to show political advertisers it can target audiences more effectively on YouTube than TV can. During the 2018 election season, it hired Democrat and Republican digital consultants and pollsters to analyze YouTube’s targeting of specific demographic segments or affinity groups, a person familiar with the efforts said.

YouTube shared that research and targeting with big buyers weeks before the 2018 midterms to show how granular the information could be. For instance, documents reviewed by The Wall Street Journal described several groups of people that the research had identified as persuadable voters, including “bargain hunters” and “30-minute chefs.”

In December, after the election, YouTube convened around 200 Democratic and Republican political consultants in Washington to tout its effectiveness further, including citing its work promoting the movie “The Greatest Showman.”

The message was, “spend as much money with us as possible and it’ll go far,” one attendee said.

Mr. Trump and Democratic presidential hopefuls including California Sen. Kamala Harris, Massachusetts Sen. Elizabeth Warren, Vermont Sen. Bernie Sanders and South Bend, Ind., Mayor Pete Buttigieg purchased YouTube ads after the new tool made its debut last month, according to digital ad research firm Pathmatics.

The 2020 election season officially kicks off in February, with contests in Iowa, New Hampshire, Nevada and South Carolina. No presidential candidate since Bill Clinton in 1992 has managed to clinch the nomination without having won at least one of the first four states that election cycle.

A screen capture from a campaign ad for Vermont Sen. Bernie Sanders that appeared recently on YouTube.

On Nov. 15, Google plans to let ad buyers reserve slots on YouTube for the entirety of 2020, a presidential campaign digital buyer said.

They also can buy ads live using YouTube’s auction mechanism, but that often proves more costly. On top of automating the process, the new system removes the minimum amount of spending YouTube used to require for reservations.

Users of YouTube’s new tool can reserve slots but won’t have to pay until the ads actually appear, media buyers said.

The company warned users not to see this as a license to overbook.

“If we see advertisers abusing the system, we reserve the right to strip external reservation privileges for the remainder of the 2020 cycle,” according to an email Google sent to ad buyers in recent weeks that was reviewed by the Journal.

A screen capture from a campaign ad for California Sen. Kamala Harris that appeared recently on YouTube.

Write to Emily Glazer at [email protected] and Patience Haggin at [email protected]

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