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Jan. 18, 2020

OOH Insider - Episode 008 - Election Year Economy and the Impact on YOUR Business!

OOH Insider - Episode 008 - Election Year Economy and the Impact on YOUR Business!

LINK TO THE YOUTUBE RECORDING: https://youtu.be/JfPvoJkf9A4

Wondering how the 2020 Election is going to impact YOUR business?

If so, you can't afford to miss this episode.

We take a historical look at the economy during election years, unpack what it means, and give you actionable insight on how to approach this tremendous opportunity in your business.

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Okay. Maybe I was just talking to myself there for a second, but, uh, we are live on Facebook. We are officially recording and welcome to. Out-of-home inside. We're bringing you tips, tricks and insider insights, and not only how to maximize your advertising investment would make it more efficient. Anytime we can get more results, spend the same or less money.

That's a good thing. I'm Cinderella. I'm your host. And we're going to be talking today all about how the election, your economy is going to impact. Your business, regardless of what kind of business you run, the election, your economy is going to impact you in one way or another. It's either going to help lift your business.

It could impact the way that you go to market. What sort of advertising you do? I mean, there's a very real possibility that as we get later into the. If you're on TV, if you're on radio, you are getting bumped from your advertising in place of the, uh, uh, the political ad campaigns. So it's something to be aware of with platforms like Twitter and Spotify outright eliminating political advertising.

That means there are fewer places. For politicians and campaigns and superpacs to advertise to spend their money, that's going to impact your business. But ultimately we're here to talk about the economy. We'll bring it full circle with the advertising at the end. But if you've been wondering about how the economy of an election year is going to affect your business, you're not the only one, a few weeks ago.

I was having a conversation with the president of a very large company. And he said, ah, Tim, we're gonna, we're going to stay consistent going into the election year with our advertising, but we want to moderate throughout the year because, uh, you know, there's obviously the. Of how will the economy do and that's that, that sparked me to really start diving into it and looking historically at the economy, uh, what you may or may not know about me is that my degree is actually in finance, on the advertising enthusiasts, who has put his passion to work, but I have that finance brain behind me.

So I said, let's look into it. And, uh, what I'm going to do here is I'm gonna share my screen. So that you can see what I'm looking at and we're going to do that. So if you're listening to this, um, in the podcast version, you're going to want to go check the show notes, get back to the YouTube link, take a look at this stuff.

If you want to see what it looks like on a screen. Um, otherwise we're going to just break apart the numbers. Hey, if at any point. If at any point you say, Tim, this is really valuable information. This has been really helpful. Thanks for bringing it to the forefront of the conversation and dissecting it in a way that makes sense.

If you find yourself thinking that I want you to send me a message right here on Facebook, so that we can set up a time to take this conversation to the next piece. And that's understanding the market data of your specific industry, your business, how this, what we're talking about here in election year economy.

Truly impacts your vertical. So we're going to talk big, big sort of, you know, a broad stroke here about the economy in an election year. We're going to start that by talking about the gross domestic gross domestic product. So what is gross domestic product? You've probably heard it referred to as the GDP.

What that is, is a measure of the products and services produced by a country, a state, a county, a municipality. We're looking at the products and services per. By the United States. And we're going to look at that over the last 20 years or so. Um, and that's going to give us a pretty good snapshot of what the economy looks like going into an election year.

So we can tell that 2018, 1716 was our last election year. When you see this little percentage, you see a change in a, as I'm scrolling over here, that's the average amount of GDP growth. In that time period. Now, obviously we know 2008 great recession. I'm going to make the argument to you that had it not been an election year.

It actually would have been much worse than. The year after 2009, just how bad it was. I would tell you that in my opinion, the opinion of others, 2008 would have been much, much worse. Had it not been an election year. That's a good reason to be excited about your opportunity in 2018, uh, I'm sorry, 2018. I'm looking at the screen.

Freudian slip 2020, the 2020 election year could be a great opportunity for you and your business to grow while others take a more passive approach to say, Hey, Hangouts, you have the economy shakes out. Cause you're going to have actionable intelligence at the end of this episode. So let's go all the way back.

So we got 16, 12, 8, 4, 2096. Let's go all the way back to 92. So 92 in election year, I believe that was still a George Herbert Walker Bush. If, if I'm not mistaken, uh, 92, might've been. The Clinton when, uh, we had to have to go back and check that I'm not a political, pundant just an advertising guy. But if you see here though, the years leading up to the 92 election, 1.9, we fell 0.1, uh, significant.

When you compare the growth of 92, then a, uh, a reversal correction, if you will, in 91, but 92 strong 93. 94 95, 96, another election year. You can see up significantly up almost 50%. The election year of 96 GDP growth was up almost 50, 50% year over 97, 98, 99, 2000. You can see here record growth through these, uh, the Clinton administration here.

4.4 4.54 point. 4.1, super strong, consistent all the way across the board. When you look at this 4.1 of 2000, comparing it to a decade before you've almost doubled the GDP growth in less than a decade consistent. Election year production, no concerns yet. We're going to, we see where data close to the 2008 1 2, 3 and four.

You can see for the best year in that election cycle, 1, 2, 3, and four election year best. Now there are a number of factors why we had the recession 2008. That's not an area that I'm an expert in, but it has to do with manipulation of derivative. An unstable market behind the whole, obviously the mortgage backed securities industry.

There are a lot of things going on behind the scenes that weren't directly affected by the actual production of the country. Some, uh, some lending practices for a different day. But again, I would submit to you that based on what we've seen the 18 years, uh, leading up to that you've consistently seen strong GDP growth in election years, 2008 would have been a lot worse.

Had it not been elected. 2012 election year, you can see it's up over 11. 13 14, 15, 16, 16, an interesting election. Obviously, again, we're not going to get into the political stuff, but it was an interesting election because there was so much uncertainty. You've got a newcomer to the stage. You sort of had a head, all the things baked in with, with the democratic candidate.

That's the story had already been told, and there were concerns within the markets. We didn't know how it was. 1718. Then the number for 19 is up again. And I would tell you that 20 is going to be a strong GDP growth here. So when we look at the picture across the board, GDP has been pretty consistent in election years, but here's really the thing that we care about.

How much are people spending, right. That consumer. And people spending money or not. And we've seen consistently every single year, people are just spending more and more money. Now that's debatable. Is that a good or a bad thing, but 2016 record spending 2012 record spending and you just look at the years leading up to it.

Right? So 2008 election year peak falls falls rises again a year before the election. And we see it peak again, every single year. In this chart here. When you look at the election year, it is a peak for the election cycle. Let's just look at 2001, 2002, 2003, 2004. Look at that job. All right, let's go all the way back.

2090 9, 98, 97. Look at this every single year. The peak is in the election year. It's a great opportunity. Now, if you're local to the Lehigh, Valley's from Pennsylvania, saw this great release from the Lehigh valley economic development center. The other day that, uh, the GDP of the Lehigh valley. Over $41 billion equivalent to the entire states of Wyoming and Vermont.

So the local economy is strong. We have more jobs than we can fill. People are spending more money than ever. It would be an absolute mistake for you to look at the election year as a threat to your business. It would be an absolute mistake to pull back on your advertising because I'm just going to stop the share here.

Um, Because it's an election. What we just saw is that consistent growth through the economy, consistent spending records in every single election year. Now it's up to you to determine how do I best reach my market. And that starts with a concept that I call the 80 20 rule. Some people know it more formally as the Pareto principle, but it's really just under.

Where do 80% of my customers come from, where do they live? Where do they work? Where do they play? What is the product line that 80% of my revenue comes from? Is it with this specific product? 80% of my sales are on this specific product. And 80% of those sales come from these 10 zip codes. That's how granular you need to look at this because the opportunity that you have right now is that there are a lot of business owners that don't have the information that we just talked about.

I just shared on the screen here. Hey, what's. Have you guys met Yankee Yankees, the blind border Collie. That's leaving me toys right here. We've got the rubber, squishy donut. So we'll throw that for him. Uh, and so he comes back in just a minute, but a lot of business owners don't know how to one find the data that we just looked at.

Two. They're not having this conversation that we're having right now. And three, if. They wouldn't know how to apply it. So we're going to take, now that information, we just talked about the 80 20 rule burritos principle, understanding where the majority of your sales are coming from from a very intentional basis.

Because once you know, Hey, 80% of my night, my new business comes on this product line or this service 80% of my new business comes from here. 80% of my repeat business comes from. What are other ways that you can monetize your existing customers? Is it offering additional services? Is it packaging it together?

How can you do that? And then let's look at the advertising platforms available to us. Newspaper, email, direct mail, television, radio, outdoor advertising, obviously, you know, where my bias lies, but here's the thing about all of those items is that they all work. That's it, period. They all work it's to what degree for your audience, once you determine who your perfect audience is, then you can really get smart about how am I going to match up my audience to the medium newspaper.

If I have an older demo, it could be a great, great play. Direct mail still continues to be a powerhouse. Check your mailbox around the holidays. Who'd you get a lot of mail from every store you've shopped from online over the last 12 months. So direct mail is still open. Television radio. It's just different.

They're all just different mediums. So we know that Twitter and Spotify, Spotify are both not accepting political advertising. So if those are platforms, um, for you in 2020, that are really great for connecting with your core. Awesome. You're not going to have too much competition there in way of political advertising.

You may still have competition other people in your space, but you're not going to have competition there for political space. And that's really important again, because the advertisers that are on TV and radio, once it gets close to November, those last 60 days do not be surprised when your schedule gets bumped and isle runs and make good in December.

But it's going to be too late at that point. You're going to miss too much. Of your advertising around the busiest shopping time of the year. That's not a time you want to want to be able to get in bumped from TV and radio. So you need to really look at it and say, okay, where is my audience? How do I best reach them?

Maybe it's social media, maybe it's Facebook and Instagram. Interesting thing about Facebook and Instagram is Facebook just came out with a study that said, Facebook ads work better when you combine it without out of home advertising. That's right. Facebook put together an entire case study that said, we want to test outdoor alone, Facebook and Instagram.

And then the combination of the two and what they found was that their results, their actual conversion of getting people to take the action that they wanted to. And there were a few different businesses that they, that they tried this with was 30 to 40% higher. Now, why is that so exciting? Because in 2017 Nielsen did a study about out-of-home.

Oh, we might, we might be getting the Yankee appearance. Yay. All he was, he was just jumped up right here. Let's see. That's awesome. 2017 Nielsen did a study, comparing television, radio, print, advertising, and outdoor advertising in each of their respective abilities to drive more people on to Google, to look you up more people on the Facebook and Instagram to interact with your brand, look up your brand.

See what you're all about. Interact with Twitter, tweeting about the actual creative. If you go onto to Twitter right now and just go into the explore function, search billboard ads. So one of my favorite things to do, if I'm feeling a little bit bored, because there's all sorts of people having conversations about billboards that they've seen, they're not billboard advertisers.

They're just Joe Schmoe, walking down the street going, Hey, that billboard, it resonates with me. Political. It, it is an opportunity for politicians to get into, if somebody at this point is watching it. Um, and as a candidate or knows a candidate, tremendous opportunity because of the targeting, but specifically for small businesses, it's one area where there's not as much competition from political advertising.

And the really cool part is there's no, there's no policy that says, Hey, campaign X came in and they're demanding that they buy this much inventory. You need to take off. Um, Bill's body shop down the street or Tina's salon, uh, from across town. There's nothing like that. So once you're on that space, it's yours, it's protected.

You don't have anything to worry about. Now, the really cool thing back to that Nielsen study that that Nielsen study found was that outdoor advertising drives more people to search on Google being asked those types of search engine sites. It drives more people to look you up online than TV, radio, and print combined.

On a dollar for dollar basis, Tim, what the heck does all that mean? The simplify? It really. If you're spending 5,000 on television, 5,000 on radio and 5,000 on new newspaper, $15,000. If you spend $5,000, cut your budget by 10 grand. If you spent just $5,000 on outdoor advertising. You would drive as many people online to look up your business.

So if you've got a great website, if you're spending money on search engine marketing, if you're spending money on search engine optimization, which are all based on people looking you up, then this is a component of your media mix that you have to consider, right? So a few advantages, it's more efficient on a dollar for dollar basis than all three of those mediums.

You're never going to get bumped. You're never going to get bumped your spaces pretend. Lastly with the technology available today, you can behaviorly target outdoor locations, billboard locations that match with your best customers. If you are looking for somebody who has a, a typical buying behavior, if you're a coffee shop and you're looking to, to get more people that are most likely to stop and pick up a coffee on their way to work each day.

There are specific targeting mechanisms in place. So you don't need to spend 30, $40,000. You can get away with spending five to $7,500 a month. Be very targeted, having an incredible message. It's funny that, you know, ads on this thing are about 10 to $12 to reach a thousand impressions. So 10 to $12 CPM outdoor runs in a three to $5 range.

That means you're getting twice as much. In terms of actual impressions. So you're getting twice as much share of voice for your dollar. And you know, that it's three times as effective on a dollar per dollar basis than all your other mediums. So if you're spending any money on advertising at all, you got to think about out of home in 2020 it's an election year.

It's a way to take advantage of a growing. Growing consumer confidence. Uh, in fact, there's a, there's a bill that's in the process of, of being pushed through right now, a stimulus package to help stabilize and support the 2020 economy, because it is so important that we do that for our small business owners.

We've seen it traditionally, it's going to be consistent across the board, but you're getting some additional support to ensure that. So don't be afraid of the economy in 2020. There's a real opportunity for you to take advantage of. Increased consumer confidence increased spending in election years, and a lot of business owners who are afraid.

Don't have the information that we've talked about here today and are going to miss out on that opportunity because they're going to pull back on the reins a little bit. So if you're looking to grow your company in 2020, all you've got to do is send me a message here. If this information has been held.