During the last midterm elections, a record $3.4 billion was spent on political advertising. That was before the election of Barack Obama, the recession and the healthcare reform legislation that's now winding its way through Congress, and all three of those will have an impact on spending for the 2010 midterm election. Political spending this year will hit $1 billion, with a third of that going to healthcare issues. Next year spending will spike with the continuation of the healthcare issue and heavier spending by Obama's political opponents, who will be looking to take advantage of his sagging approval ratings to sweep Republicans into office. Still, the recession may result in fewer campaign donations and smaller coffers than politicians have seen in years past. Evan Tracey, chief operating officer of TNS Media Intelligence’s campaign media analysis group, talks to Media Life about 2009 spending, what's expected in 2010, and where much of that money will be concentrated.
How will 2010 spending compare to the 2006 midterm elections? What is your forecast at this point?
Well, I think it’s always hard to compare elections, it’s never apples to apples. You have the same mix of races, but the political factors change.
One of the biggest changes is ballot measures. California will probably not have the repeat of 2006, where it had health care, tobacco tax, off-shore drilling, etc. They will have some--the gay marriage thing could come back and there could be something on tap that gets the insurance industry’s interest--but it is a bit too early to know what that landscape will be.
But there are 35-plus governors races next year, and a lot have primaries that will lead to early spending. Also, it’s a census year, so re-districting will be an issue.
And you’ve got political factors. You’ve still got a nation in a bad financial state and states in bad positions as far as their own budgets go.
You always have to look at fundraising on a couple of different levels. Will the voters be engaged, will the activists be engaged?
I think the economy is certainly something you have to look at and some of the traditional giving that was there might not be there.
How many hotly contested states do you see around the country at this point? Or put another way, will media spending be targeted to just a few markets or to a whole slew of them? Are there any races in particular that you are keeping an eye on?
I think there’s going to be a number of very competitive states. Take a state like Arkansas, which will have a competitive senate race and two competitive House races. It sets up to be one of those perfect storm-type states. Illinois and Kentucky could be hotbeds, and also a place like Ohio also has very active local races, which attract a lot of spending.
Also, in California you have billionaires squaring off in the governor’s race and one getting into the senate race—they’re self-funders.
So, I mean, there will be an awful lot of states seeing a lot of these dollars, and more will see them than not see them. It’ll be a very active landscape in terms of competitiveness and races that have political high stakes. The more competitive the races are, the more money gets spent.
How is 2009 spending shaping up in terms of dollars? How much of that is issue spending versus candidates? Of the issue spending, is the bulk of it health care? Can you put a percentage on it?
If you sort of combine issue and political spending, it’ll be close to $1 billion. About two-thirds of that is issue spending, and there have been a number of state issues this year, mainly about state budgets.
Healthcare is probably going to be a bit more than a third of total issue spending this year, and the thing behind that is stuff related to the cap-and-trade bill, those have been the two biggest by far.
How, if at all, did the recession affect political spending this year? Will there be continuing effects next year?
You know, I don’t think there’s anything you can point to that said it impacted spending as much as one might think.
There may be less spending on some mayor’s races this year, but some of that is they weren’t as competitive this year as they were in 2005. Bloomberg spent more this year than he did in 2005, so there are things balancing it out, but it’s hard to say if it’s all recession-related or if it’s political factors.
But what you are seeing is 2010 candidates going up on the air now, they’re not waiting for the calendar to change.
Looking ahead to 2010, how strong will health care issue spending be? Is it evenly divided pro and con? Or is it mostly funding by the insurance industry?
I think it will be very strong whether it passes or fails. It will certainly be the kind of thing that bleeds into next year. There was a decided advantage before the summer on the sides in favor of health care reform, and that has changed since August.
What you’re starting to see is that spending is ramped up and it's liable to stay that way. It’ll go from the policy into the politics next year. Every member of the House and Senate in tough districts will take votes that hurt or help one side or the other, and so some will try to unseat those who didn’t vote with their particular point of view.
President Obama's approval ratings have fallen off since his inauguration, and some interpreted the Republican victories in New Jersey and Virginia gubernatorial races as referendum on his presidency. Will that perhaps pump more money into next year's midterm elections, if Republicans sense that there's a chance at unseating more Democrats with people less enamored with Obama?
I think it certainly will play into this incumbent insecurity. To the extent that those races were a referendum on Obama, it’s probably not that as much as the voters liking the brake-and-accelerator model. If it had an effect, it was that it had independents looking at healthcare, bailouts, etc., and thinking one party controlling things isn’t the best thing.
This year could be a preview that some independent voters think it’s better to have gridlock rather than it being all about Obama.
Spot TV will get the bulk of 2010 election spending, as it always has. Do you see the internet, or any other media, starting to siphon off more dollars? If not, will we see that more down the line?
I think more money means more money for more things rather than one taking from the other. Spot TV is still the dominant vehicle, but local cable is well situated for some of the local races. You’ll probably see more of them relying on local cable as an economics thing. They can be more zeroed in to their local districts, etc.
The internet as an ad vehicle isn’t taking any money away; it’s certainly getting more money from the campaigns, but I think it’s more about acquiring activists and raising money than it is for persuasion.
The inventory in some of these states that have multiple campaigns competing for the same time will lead to a spillover effect in which people will look for places to spend their dollars. Radio’s probably in a good position in a lot of states because of that factor.
As campaigns kind of saturate local TV and find diminishing returns factor in, they’ll look for other places to message. Broadcasters probably don’t need to fear the internet, because it’s good for raising money, and then once they do, they turn around and spend it on TV.
