Inside the Campaign Ad Machine

A small group of savvy political operatives will control how billions will be spent in next year’s election

Talk to enough political consultants, and sooner or later you’ll hear some variation on the same story: the one about the tiny, small-market TV stations that, come the year after a big election, suddenly find themselves with enough money to buy new furniture, remodel their studios, and give out big bonuses to their staff. Cash doesn’t just flow into TV and radio stations during presidential elections—it gushes. In 2008, TV commercials ate up at least $2.8 billion in campaign funds nationwide, according to the Campaign Media Analysis Group. About $2 billion of that went to local broadcast ads. Barack Obama’s campaign spent about $310 million of the total, and John McCain’s kicked in another $136 million, with the rest spent by other presidential  candidates during the primaries and by political parties, independent groups, and candidates for other offices.

The 2012 election is expected to set new spending records, which is why most of the would-be GOP nominees are spending the majority of their time right now raising money. But presidential campaigns turn the logic of TV advertising on its head, anyway. Most candidates get tons of what political operatives call “earned media,” thanks to the 24-hour news cycle—if you’re running for president, your name is going to get out there, even if you don’t spend a dime publicizing it.

“So much of presidential advertising is wasted money,” says Mark McKinnon, who made ads for George W. Bush in 2000 and 2004, and worked for McCain in the 2008 primaries before withdrawing because he didn’t want to work against Obama. “The ads become just background to a broad architecture the campaigns are trying to create. . . . Easily half of the money spent on TV ads in presidential campaigns is a complete waste and would be better spent online or on other activities.”

In many races, there’s often a built-in incentive to waste that money, though: Media consultants are frequently paid on commission, so the more ads that run, the more they make. Standard commissions for House or Senate races run between 10 and 15 percent, but the higher volume in a presidential race means lower rates. Republican presidential candidates typically pay a flat fee, or cap the amount of commission they’ll pay, in part because many GOP ad makers also get lucrative contracts for public affairs campaigns for corporate clients. Democratic candidates began shifting to that model four years ago, too. (In 2008, Obama still paid media consultants $2.7 million, according to the Center for Responsive Politics.)

Some of the most famous ads in past campaigns came out of big mainstream firms—Ronald Reagan’s “Bear in the Woods” and “Morning in America” spots, for instance, were made by Hal Riney when he was at Ogilvy & Mather (BBDO was also represented on Reagan’s “Tuesday Team,” an ad hoc group of admen who worked on his 1984 reelection). But as campaign budgets grew over the last few decades, politics has gotten increasingly specialized; now it’s not uncommon for pollsters and general consultants to recommend political media strategists to candidates.

This may be one of the last election cycles where TV dominates candidates’ budgets the way it has over the past few decades. The share of political advertising dollars that goes to interactive remains quite small, but it’s growing, and many of the would-be presidents announced their official entry into the race online. But don’t tell that to some of McKinnon’s colleagues, who—six months before the Iowa caucus—are already on board with the Republicans hoping to take Obama’s job. Here’s a look at who will rake in the cash making commercials for the GOP—and the president—next year and, as well, help make history.

Mitt Romney

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