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

Selling Mitt Romney won’t be easy. Republican primary voters got a look at the product four years ago, when Romney spent $30.7 million on TV ads out of a total of $107 million he burned through ($44 million of which came from his own fortune). And since then, Romney’s signature accomplishment from his time as governor of Massachusetts, a universal health insurance plan, has become an anchor around his neck.

Those working on Mitt 2.0 are ready to try, though. And Romney raised $10.2 million in one day in May, so it looks as if he’ll have plenty of money for commercials. The sprawling group of consultants who worked on his 2008 bid is gone, leaving just the Silver Spring, Md.-based Stevens & Schriefer Group to do TV ads and Arlington, Va.-based Targeted Victory (founded by a former Republican National Committee turnout wiz, Michael Beach) to work on new media.

Stevens & Schriefer principals Stuart Stevens and Russ Schriefer worked for Romney four years ago, too. But back then they were just one of many voices with some control over Romney’s TV strategy. “In 2008, the idea of the expanded media team was to inject a lot of creativity and collaboration. But instead, it injected competition,” says one GOP strategist who has worked for Romney. “Stuart and Russ emerged as having a greater rapport with the candidate.”

The firm made some of George W. Bush’s most effective ads in 2004, including a notorious spot featuring John Kerry windsurfing, flipping and flopping across the screen to the tune of “The Blue Danube” as contradictory positions he’d taken scrolled by. “If I were a front-runner trying to cement my position, I’d hire Stuart and Russ,” says McKinnon, who worked with the pair on Bush’s ads.

Michele Bachmann

There was no particular reason Minnesota Congresswoman Michele Bachmann had to spend nearly $4 million on advertising for her reelection race last year; she won by 13 points. But she’d raised $13 million from fans around the country, so why not? She’s stayed on a hot fundraising pace this year, bringing in $2.2 million in the first quarter, more than Romney did in the same period. Bachmann’s longtime media consultant, D.C.-based Ed Brookover, was behind the blitz, and he’ll continue to shape her image as Bachmann tries to vault from her spot as exurban Twin Cities congresswoman/national voice of the Tea Party id to a higher post.

Though Bachmann sometimes alienates her GOP allies, Brookover never does—he’s close to House Speaker John Boehner, who brought him in to help the Republicans’ national House campaign in 2008. His firm, Greener and Hook, does specialize in the right flank of the House caucus; other clients include Florida’s Allen West, North Carolina’s Virginia Foxx, and Ohio’s Jean Schmidt, none of whom would ever be accused of moderation, either in their politics or in their rhetorical style. But even with such outspoken candidates, Brookover’s ads can be fairly tame.

Jon Huntsman

While former Utah Gov. Jon Huntsman was still serving in the Obama administration as ambassador to China, some veterans of John McCain’s 2008 campaign put together an organization-in-waiting for him, hoping he could be the guy to liven up a potentially drab field. To make hypothetical TV ads, they enlisted Fred Davis, who was responsible for the McCain campaign’s general election advertising.

Thanks to Davis, Huntsman’s ads are likely to be memorable. Think of an ad or Web video from a Republican candidate over the last few years, one you can remember offhand. Chances are, Davis made it. The McCain ad that compared Barack Obama to Paris Hilton and Britney Spears, calling him “the biggest celebrity in the world?” Davis. The “demon sheep” Web video for former HP executive Carly Fiorina’s Senate campaign, which portrayed other GOP candidates as red-eyed wolves lurking amidst the Republican flock? Davis. The most famous spot Davis has been responsible for lately, though, may be the misfire from last year: Delaware Senate candidate Christine O’Donnell reassuring voters, “I’m not a witch.”

Republicans say no one in the business comes up with ideas like Davis: “Great creativity, visual sense, excellent production values. Easy to work with, too,” says McCain ‘08 advisor Mark Salter. Davis told Time last year that he aims for his work to go viral; it cuts down on the airtime his candidates need to buy. But that creative impulse comes with a downside: Flops can go viral just as quickly as hits, as the O’Donnell spot showed. “I’m not sure that it’s a badge of honor to be known for one of the most ill-conceived ads of 2010,” says a Democratic ad maker.

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