The Archive

IN THIS EDITION

Political ads shift to streaming as cord-cutting surges

McConnell, Tillis lead charge against Republican leadership overhaul

Industry, not government, should enshrine AI safety, says Google official

The Vault: Torres preps bill to open FedNow to nonbank remittance firms

THE TOP

Political ads shift to streaming as cord-cutting surges

Happy Thursday morning. There are 12 days until Election Day.

With traditional TV on a slow death march, it’s not just broadcast media that’s scrambling to adapt to the changing new environment.

Political campaigns, candidates and organizations that historically rely heavily on standard TV to get their messages on the airwaves have also been disrupted by the growing trend of Americans cutting their cords in favor of streaming services. And we’re getting some fresh clues about how political groups have been forced to adjust where they’re investing their resources.

This cycle, the top super PACs associated with both House Republicans and Democrats are spending historic sums — roughly nearly $70 million combined — to place political ads on streaming services, according to a review conducted by Punchbowl News. The respective campaign committees are also increasingly pouring money into this space.

By the numbers: House Majority PAC, which is aligned with House Minority Leader Hakeem Jeffries and the Democratic leadership, has invested more than $30 million on ads on streaming services this cycle. Meanwhile, the Congressional Leadership Fund, which is linked to Speaker Mike Johnson, has spent nearly $37 million on streaming so far — double what the organization spent the previous cycle.

With all this said, advertisements on broadcast and cable TV still account for the lion’s share of the organizations’ investments. The goal is to pump their messaging through a diverse media mix that acts as a sort of “surround sound” for targeted audiences, ​​CLF President Dan Conston told us.

Yet it’s not hard to imagine a day when streaming dollars are on par with or even overtake traditional TV spending. Of course, that depends on how successful the streamer strategy is this cycle and whether and how Americans’ viewing habits continue to evolve. But Conston says they’ve already seen signs of impact.

Here’s more of what Conston told us about streaming ads:

The benefits: The most obvious upside is that political groups can better reach voters in cluttered media markets. Consumer viewing trends have significantly shifted in recent years among key demographics, including younger voters.

Streaming also gets them more bang for their buck. Buying ad time on traditional TV becomes increasingly expensive, especially later in the cycle. So streaming can be a cost-effective alternative, particularly for last-minute maneuvering.

It also allows for a more targeted approach. In most cases, the groups can’t get as granular as picking specific shows to advertise on. But after selecting the streaming service, they can target the ads to certain households.

One exception is YouTube. While organizations can’t target potential voters based on data or political affinity, they can choose to place ads with content that they think swing voters might be consuming.

Tailoring the content: In order to have maximum impact, both parties have started to tailor their content for streaming. An ad that may work for traditional TV might not always be a good fit for streaming.

CLF has dedicated more of its advertising budget to 15-second spots since viewing habits are different on streaming. Voters may have shorter attention spans while scrolling on their phones. But sources involved in the digital strategy said the ads also need to pass the eye test. For example, does the ad still make sense without sound?

Democrats, meanwhile, have created entirely new content to advertise on steaming, at least in some cases. The HMP has tapped influencers to make several TikTok-style political ads. Here are a few examples.

Traditional TV is still a big factor: There are still plenty of political ads being placed on old-school cable and broadcast TV. Live sports, which account for the majority of the top 100 shows on television, are a key part of CLF’s buying strategy, for instance. That’s especially true in the fall, when NFL football, college football, NHL hockey and playoff MLB baseball games are all airing.

And with the World Series this year a classic showdown between the Los Angeles Dodgers and New York Yankees, there’s even more of an opportunity to reach voters in markets with key House races this cycle.

While those are expensive ad buys, the viewership is also likely to represent some key demographics. But even live sporting events are increasingly being shown on streaming.

— Melanie Zanona

October Event Alert! Join us next week on Thursday, Oct. 31 at 9:30 a.m. ET for a conversation with Sen. Mark Warner (D-Va.). We’ll discuss the news of the day and how 5G supports America’s global competitiveness.

Afterward, Punchbowl News founder Jake Sherman and Punchbowl News reporters Max Cohen, Andrew Desiderio and Mica Soellner will discuss the political landscape ahead of the 2024 elections and the busy lame-duck calendar. RSVP here!

THE SENATE

McConnell, Tillis lead charge against Republican leadership overhaul

One of Mitch McConnell’s final tasks as Senate GOP leader will be to try to prevent what he sees as a dangerous weakening of the job he’s held for nearly 18 years.

McConnell has done this mostly in private. But in our most recent interview with the Kentucky Republican, he addressed one of the ongoing debates head-on — the majority leader’s ability to shut down an open amendment process on the floor.

We wanted to bring you those comments now that this has emerged as a central issue in the race to succeed McConnell, with his ally Sen. Thom Tillis (R-N.C.) firing off a letter last week taking aim at conservative hardliners’ bid for more influence.

McConnell’s view: There’s general agreement that the amendment process for the Senate floor is broken. But Republicans disagree on the reasons why.

Tillis argued it’s Republicans themselves who often prevent an open process, citing last year’s month-long slog to clear GOP objections on amendment votes for a funding bill.

McConnell noted that individual senators already have a lot of power because the Senate operates on unanimous consent, often leaving the majority leader with no choice but to shut down amendments in order to keep legislation moving forward.

Here’s more from McConnell:

McConnell implicitly warned the GOP leader candidates against making concessions in order to win votes, referencing former Speaker Kevin McCarthy’s downfall.

“I want whoever has this job to have some clout,” McConnell said. “When you have narrow majorities, you’ve seen in the House what could happen. Take all the power away from the leader and what happens? Chaos.”

Where they stand: The three Senate Republicans bidding to succeed McConnell are all proposing varying degrees of changes to the leadership structure that would empower rank-and-file senators.

Sen. Rick Scott (R-Fla.) is proposing the most drastic weakening of the GOP leader position among the three candidates, but he isn’t likely to win.

Sen. John Cornyn (R-Texas) has suggested term limits for the Republican leader — there aren’t any now — and some general changes catered to the rank-and-file. Senate Minority Whip John Thune has promised to “democratize” the Republican Conference in part by empowering committees.

But Thune, as we wrote last week, is keeping his powder dry on some of the more specific proposals being put forward by conservatives like Sen. Mike Lee (R-Utah). Thune told us many of the concerns expressed by Lee and others can be resolved simply by the South Dakota Republican’s own “style of leadership.” Thune and Lee have met multiple times, it’s worth noting, but Thune isn’t making any public commitments on Lee’s demands.

There’s always the possibility that a dark-horse candidate jumps into the race. But barring a last-minute surprise, it’s not clear who the conference’s most conservative members will gravitate toward if Scott loses on the first ballot and they’re forced to choose between Thune and Cornyn. Both have been meeting privately with members of this key voting bloc.

Tillis told us recently he’s torn between the two and doesn’t want either to be forced to make concessions to hardliners in order to win votes.

“You could flip a coin and build an argument for either one,” Tillis said. “I’ve got to make a tough decision.”

— Andrew Desiderio

TECH TALK

Industry, not government, should enshrine AI safety, says Google official

Consumers should expect vendors producing artificial intelligence systems to put in place safety and security measures rather than have them prescribed by the government, the CEO of Google Cloud’s public sector division said.

Mandates defining how to reach particular targets are not appropriate, said the CEO, Karen Dahut.

“You have to expect that the model providers are ensuring that safety and security,” Dahut told Punchbowl News.

President Joe Biden’s approach, laid out last year with support from several top commercial AI providers, including Google, emphasizes security testing and a wide conception of the harms and biases AI should avoid. The administration has also relied on collaboration between companies, government and academia.

“What the administration has done around ensuring security of AI algorithms and all, that’s really good language that we all can live by,” Dahut said.

The sector isn’t ready for lawmakers and regulators to put in place a “step-by-step process for how to” ensure safety, though, Dahut added.

Dahut’s comments underscore that AI companies mostly don’t want Congress or regulators breathing down their necks about nascent technology.

But these tech companies also don’t love the idea of having wasted the voluntary work they did with the Biden administration to lay the groundwork for future light-touch regulation.

Dahut’s Hill agenda: Dahut, whose division sells cloud services to government agencies, said she visits Congress quarterly to meet with appropriators, defense policy committees and others. Her top priorities are security, procurement strategies that bring in multiple cloud vendors and accreditation of technology for government use.

“The… rules that are in place today for how technologies and emerging technologies get accredited are outdated,” Dahut said.

The competition: Dahut said she and Thomas Kurian, the CEO of Google Cloud, still have to reassure government officials that the company is committed to working with the Pentagon and the intelligence community. Back in 2018, due to employee pressure, Google pulled out of Project Maven, a Defense Department program using AI to help target drones.

“Our competitors like to say, ‘Google’s not really committed,’” Dahut said. “We hear that from customers.”

Since Dahut joined two years ago, she and Kurian have frequently “made the point to say, ‘We are in; we are all in.’” Dahut said that she does find herself reiterating the issue less and less.

One topic Dahut says she doesn’t hear about is the Justice Department’s two antitrust cases against Google, which focus on search and ads rather than cloud.

“The antitrust suit has never come up in a client conversation with me,” Dahut declared. “I think that says something.”

— Ben Brody

THE CAMPAIGN

First in Punchbowl News: The political arm of the Blue Dogs is endorsing three new candidates: Jonathan Nez in Arizona’s 2nd District, Janelle Stelson in Pennsylvania’s 10th District and Jennifer Adams in Florida’s 7th District.

Nez, the former president of the Navajo Nation, is challenging freshman Rep. Eli Crane (R-Ariz.) and a recent poll showed the two candidates tied. Stelson is challenging Rep. Scott Perry (R-Pa.) and has run a vigorous campaign that has caused national Republicans to divert significant resources to save Perry. Adams is a far bigger underdog in her race against Rep. Cory Mills (R-Fla.).

— Max Cohen

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