It is hard to believe the media when they say the Great Recession is no more. If you have a hard time believing so due to soaring gas prices, the unemployment rate, or number of bankruptcies you are informed of, you are not alone. According to USA Today, a recent poll shows that 63% of Americans believe the U.S. is still in a recession and 55% thinks the economy won’t fully recover until 2013 or later. Can the media blame them? The lack of healthy economical signs support this reasoning and validates Americans’ low consumer confidence. However, 2012 is the year of the ‘Quadrennial Effect’; that’s not another term for the end of the world, it’s a sign of positive change.
The Quadrennial Effect is a series of significant events that occur every four years. These events occurring in 2012 include the Presidential and Congressional elections, Summer Olympics, and European Soccer Championships. The monetary and economical impact from these events brings a little peace of mind to policy makers as this affect is a stimulus package in the form of advertising. These events that make up the Quadrennial Effect encourage significantly more advertising spending, which is put back into the economy and creates a nice financial cushion that the governments can’t provide.
Even as the U.S. is recovering, the Quadrennial Effect has perfect timing. The European Union is still in a period of reduced economic activity that this great coincidence is sure to neutralize. Experts feel positive about the Euro Crisis because they are predicting that global ad spending will reach nearly $5 billion by the end of the year, a 5% increase from last year. Without the Quadrennial Effect, global ad expenditure for 2012 would see a 5% decrease.
Another positive sign that things are defusing in Europe is that developing markets overseas are the biggest contributors to the impending momentum. According to ZenithOptimedia forecasts, between 2011 and 2014, 60% of all of the world’s growth in ad spending will come from developing markets. Brazil, Russia, India, and China are predicted to account for 33% of growth, while Indonesia, Argentina, South Africa, South Korea, Mexico, and Turkey will contribute another 16% of growth.
Here in the homeland, we are already seeing a portion of the Quadrennial Effect take effect. In this case, political campaigns are contributing to the economy in two ways. First, political coverage surrounding their campaigns provides valuable inventory for advertisers to buy. On the other hand, they are the consumers buying up inventory in TV, radio and online. To date, presidential campaigns have already spent $95 million on TV and radio advertising this year, and roughly another $6 million in internet advertising. That does not include Senate and Congressional races. Plus, it’s only March and this year’s presidential campaigns are predicted to execute the highest amount of spending in history. So next time you start to complain about political ads cluttering your TV, think of all the money it’s generating for the economy.
As advertising budgets grow, so should consumer’s confidence. If you would like to follow ad spending for a peace of mind, there are many online resources that offer this type of insight, like Ad Age and Media Post. For the best insight into political ad spending, follow Smart Media Group on Twitter or like us on Facebook.