Researchers: Political ads could test limits of online capabilities

Politicians--and even better, their advisors--have found online advertising. That's good news and perhaps bad news for both candidates and online sites as the oncoming political season heats up.

The good news is that online platforms like Hulu and Google's (Nasdaq: GOOG) YouTube will be rolling in the dough as politicos make last-ditch efforts to persuade those who can still be persuaded; the bad news is that there actually might be more demand than the online networks can handle so that some political dollars will have to be turned away at the gate.

Online video advertising technology company Mixpro predicts that 30 percent of political ad demand in 11 states, including New Hampshire, Montana, Virginia, Missouri, Washington, Massachusetts, Indiana, Wisconsin, New Mexico, Florida and Nevada, won't be met in the last month before the November elections because demand will outpace supply by "80 million impressions," a story in Advertising Age said.

Matthew Feeney, Mixpro's senior product manager, said demand was calculated by looking at broadband penetration and correlating it to online video consumption.

"Anecdotally we know from our partners and the advertisers we work with that prices are obviously going to go up," Feeney waas quoted in the Advertising Age story as saying. "What we also hear is that the smarter (advertisers) are thinking about locking down the right inventory sources now, so they're not in the situation where inventory's not available and the prices are so high that it doesn't make sense for them."

Using television as the historic indicator, the articles said most TV inventory is purchased by Labor Day. When that happens, online would be a second choice for 30-second ads even though "it's not necessarily an ideal alternative considering the smaller audience and the fact that online video buys can trickle out over a course of days instead of landing like a sledgehammer, as TV ads do," the magazine said.

YouTube's already starting to feel a pinch in Florida, Ohio and Virginia where Mitt Romney and Barack Obama are in tight races, Google's political advertising sales guru Rob Saliterman told the magazine.

"We're absolutely certain that inventory will be incredibly tight in certain states and right now there are certain states where there is virtually no (reserve) inventory left in particular categories," Saliterman told the magazine.

"Reserve" inventory costs a minimum of $35,000 but targets audience segments that YouTube can select using filters such as age, gender and viewing history.

For more:
 - see the Advertising Age story

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