Obama has more control of campaign cash, and with it an edge in ad rates

September 26, 2012

As the presidential campaigns step up the pace of their multimillion-dollar spending sprees, President Obama has a little-noticed strategic advantage that gives him more control over the money he has raised.

While Mitt Romney relies heavily on massive amounts of cash held by the Republican Party and interest groups, Obama has more funds in his own campaign coffers. That allows him to make decisions about where and how to spend the money and to take better advantage of discounted ad rates, which candidates receive under federal law.

In one Ohio ad buy slated to run just before the election, for example, Obama is paying $125 for a spot that is costing a conservative super PAC $900.

The imbalance could prove crucial over the next six weeks, when the candidates and their allies are expected to burn through about $1 billion worth of advertising in battleground states and deploy thousands of staffers and volunteers to drum up votes. With $1.5 billion already spent on the White House race, the final barrage will help determine whether Romney can turn around his fortunes and defeat the incumbent.

Republicans, who have more cash overall, say they expect to dominate the airwaves through November despite Obama’s advantage in ad rates and grass-roots organizing. They also say they hope to combat the president’s vaunted ground game through the efforts of the Republican National Committee and independent groups.

“I think we’re in a strong place message-wise with the economy still struggling, with 26 million still struggling for work and with world events looking more and more uncertain,” Romney strategist Russ Schriefer said. “I’m confident that we will be able to get our message out.”

Romney’s White House bid is being handled largely outside his official campaign, from attack ads run by friendly super PACs to the RNC’s get-out-the-vote push. The campaign is legally forbidden from coordinating with independent groups, leaving it at a potential disadvantage at a time when the candidate is trailing in the polls.

The result is that Romney and his allies may have fewer resources than it appears, since much of what they do from here will be more expensive. The lack of direct control by Romney also raises the possibility, however remote, that his allies could abandon him if his chances continue to fade, as happened to Robert J. Dole in October 1996, when the party shifted its efforts to congressional races.

“The difference in ad rates alone could end up being very important,” said Michael Franz, an associate professor at Bowdoin College and a co-director of the Wesleyan Media Project, which tracks and analyzes political ad spending. “It’s a critical issue in determining how far each side’s money goes. It looks to be a huge benefit for Obama in the long run.”

Clashing messages

A lack of coordination may have contributed to Romney’s problems in recent months: American Crossroads, Restore Our Future and other pro-Romney groups have bombarded swing states with tens of millions of dollars in ads, with little apparent effect on Obama’s trajectory. And the RNC has used up nearly all of the $21.6 million it is allowed to spend under law on coordinated advertising with the Romney campaign, records show.

Most of the ads aired by Republican groups since the spring have been scattershot in location and theme, often clashing with the messages pushed by the Romney campaign. During the last week of August, for example, there were at least eight pro-Romney television commercials running in battlegrounds on topics including Medicare, welfare policy, jobs, debt and Obama’s “hope and change” message from 2008.

The Obama camp, meanwhile, has drowned Ohio, Virginia and other swing states with commercials focused on defining Romney as an out-of-touch plutocrat and has spread its ad purchases widely among time slots to lower costs.

During the two weeks encompassing the Republican and Democratic conventions, for example, the Obama campaign alone aired 37,230 ads — twice as many as Romney and all his allies put together, according to data from the Wesleyan group. Obama paid an average of about $526 per spot, compared with more than $700 per spot for the GOP side, the data show.

The Obama campaign declined to comment on its media strategy.

Part of the disparity stems from differing strategies, as Republicans tend to favor pricier news and sports programs for their ads while Obama chooses a more varied mix. On KUSA in Denver, Obama paid as little as $100 per spot for some recent daytime slots, while the RNC spent as much as $17,000 for a pair of commercials during a Denver Broncos preseason game, according to Federal Communications Commission records.

‘Lowest unit rate’

Starting several weeks ago, both campaigns gained the ability to obtain radio and TV advertising at the “lowest unit rate,” which is guaranteed to federal candidates within 60 days of an election. The legal requirement means that campaigns — but not parties, nonprofits or super PACs — can commandeer airtime at the cheapest prices.

At the start of September, Romney had about $50 million in his campaign account compared with about $90 million for Obama, who has brought in much of his money in small-dollar contributions. Romney, by contrast, has relied heavily on donors giving up to $75,000, most of which must go to the Republican Party because of legal limits on how much a donor can give to a candidate’s campaign committee.

Outside groups and parties typically pay at least 50 percent more for advertising than candidates do in the final weeks of a national campaign, according to media buyers. Sometimes the gap is wider: One GOP ad buyer said a 30-second slot on “Good Morning America” in Washington will cost a candidate about $2,000, compared with twice that much for an interest group.

Federal candidates also legally receive priority over other clients, meaning they can force regular commercials aside, and they cannot be refused airtime by radio or television stations, regardless of the content.

“When everyone talks about what the media buy is, it’s often very misleading,” said Ken Goldstein, president of Campaign Media Analysis Group, which tracks political advertising. “Not all dollars are created equal.”

There have been other signs of inflated costs in the Romney operation, which fell behind the Obama campaign in fundraising last month and has significantly higher staff and consulting expenses. Romney doled out more than $200,000 in bonuses to senior staff members in August even as the campaign took out a $20 million loan to get through the month.

Republicans say they will have plenty of resources to compete, both on the air through the Romney campaign and its allies, and in voter-engagement efforts by the RNC.

“We have implemented the gold standard of ground games for this cycle, drawing on the enthusiasm for the Romney-Ryan ticket,” said RNC communications director Sean Spicer. “The RNC’s number one priority this cycle is to put a top-notch army on the ground that will propel us to victory.”

T.W. Farnam and Ed O’Keefe contributed to this report.

Deputy editor, National politics
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