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    The Myth Of Exploding TV Advertising Costs

    By Dwight L. Morris
    September 17, 1996

    The myth simply will not die. Despite a mountain of readily available evidence to the contrary, most journalists and Sunday morning talking heads desperately cling to the notion that television advertising is the primary culprit behind ever-rising campaign costs. If they would spend the time to examine even a minuscule, representative cross-section of the 1,305 House races waged between 1990 and 1994, or the 107 Senate contests decided over that same period (including special elections), or even the current presidential election, journalists would discover that they've been misleading the public for years.

    After reading more than 1.4 million expenditures made by every House and Senate candidate contesting the 1990, 1992, and 1994 general elections, after conducting more than 2,500 interviews with campaign managers and consultants to ensure that we correctly classified each of these outlays into 1 of 143 spending categories, and after analyzing the resulting database, my colleagues and I discovered that television advertising is the straw man of the American electoral process.

    In 1990, House incumbents seeking reelection dispensed a total of $156,454,183 from their campaign treasuries. Of that total, $30,519,832 – or just 20 percent – was spent to conceptualize, produce, and air television and radio commercials. For various reasons, nearly one-quarter of those seeking reelection spent absolutely nothing on television or radio advertising.

    These same incumbents spent $43,327,520 over the two-year election cycle to maintain their permanent campaign operations, or 42 percent more than they invested in television and radio advertising. They paid a total of $2,666,506 to rent campaign offices, most of which remained open throughout the entire two-year cycle. Permanent offices require permanent staffs, and campaign salaries totaled $13,994,258. Incumbents spent $6,515,231 on travel, $4,584,646 on payroll and income taxes, $3,691,532 on office furniture and supplies, $3,388,649 on legal and accounting fees, $2,700,007 on computers and other office equipment, and $2,643,806 for telephone service. They tapped their campaign treasuries for $1,398,643 to pay for meals that were not connected to their fund-raising efforts, constituent entertainment, or volunteer stroking. A hefty $1,342,100 of the money donated to incumbents was spent on their "campaign" cars, many of which were leased (or purchased), insured, and maintained in Washington, DC and its surrounding suburbs.

    Fund-raising costs for House incumbents seeking reelection in 1990 amounted to $27,690,336. Persuasion mail and other campaign literature cost $15,167,953. Grass-roots activities, including campaign rallies, phonebanking, precinct canvassing, and filing fees cost $11,267,076. Incumbents spent $4,469,030 on other forms of advertising, including newspaper ads, billboards, car-top signs, and ads on the sides of buses. So many incumbents were either unopposed or had easy races that they simply gave away $10,623,128 – $4,591,703 to various Democratic and Republican party committees, $3,829,908 to other local, state, and federal candidates, and $2,201,518 to charities and civic groups. Another $2,703,323 was invested in constituent gifts and entertainment.

    1992

    Spurred on by redistricting, which gave many incumbents substantially new constituencies, and by the rising tide of anti-incumbent sentiment in the electorate, House incumbents seeking reelection in 1992 spent $199,310,139. But while their average investment in broadcast advertising jumped from $76,109 in 1990 to $141,791 in 1992 – an 86 percent increase – the cost of producing and airing television and radio commercials accounted for only 25 percent of the typical incumbent's spending. Put simply, incumbents spent more, much more, on everything. Average spending shot up from $390,387 in 1990 to $571,089, an increase of 46 percent. The average investment in overhead climbed from $108,049 to $141,848. Fund-raising outlays rose from $69,053 to $88,348. The typical incumbent spent $70,198 on persuasion mail and leaflets in 1992, an 86 percent increase over the $37,825 they had spent just two years earlier.

    1994

    In 1994, virtually nothing changed. Of the more than $200 million spent by House incumbents seeking reelection, 25 percent was invested in television and radio advertising. Once again, that included all payments to consultants for their creative input, all production costs, and the money spent to air the commercials. If one restricts the analytic microscope to the final six months of the campaign, only 38 percent of the typical incumbent's outlays during that period were devoted to television and radio commercials. If you want to find races where the majority of the money was spent on such advertising – as many reformers would love to believe is the case in all races – you have to limit your investigation to the two or three dozen most hotly contested House races in any given election cycle.

    One might expect that challengers' campaign outlays would look substantially different, since they tend to be less well known and have less access to free media than the incumbents they are trying to dethrone. In fact, challengers allocate their resources in much the same way as incumbents. In 1990, challengers spent a total of $36,105,722 to win their party's nomination and wage their general election campaigns. Of that total, $9,801,518, or 27 percent, was invested in television and radio commercials. Even though most of them were in the race for less than one year, their collective overhead payments for such items as rent, salaries, office supplies, equipment, travel, telephone service and accounting fees totaled $9,922,368. Persuasion mail and various grass-roots activities accounted for another $9,475,187 of their spending.

    In 1992, challengers managed to spend an average of $173,354, a 30 percent increase over 1990. However, like incumbents, they did not come close to funneling all of that additional money into broadcast advertising. Overall, the typical challenger's investment in such ads rose from $36,168 to $57,145, a hefty 58 percent increase. Even so, television and radio advertising accounted for only 33 percent of their total spending. Overhead costs rose by nearly 10 percent; fund-raising costs shot up by 27 percent. The average investment in campaign literature and persuasion mail climbed from $18,395 in 1990 to $28,324 in 1992, a 54 percent increase.

    Over the final six months of the 1994 campaign, challengers managed to spend roughly $55 million. Thirty-five percent of that was invested in television and radio ads, while 65 percent went to pay for basic overhead, fund-raising, persuasion mail, various grass-roots activities designed to turn out the vote, and polling.

    Arguably the toughest campaigns to wage are those for open seats, since they tend to involve financially well matched candidates who by definition are not as well known to voters as the retiring incumbent. While outlays for broadcast advertising accounted for $12,634,241 (36%) of the $34,937,744 these candidates spent in 1990, that hardly begins to explain how the pundits have gotten the story so wrong for so long.

    During the 1992 campaign, open seat candidates spent an average of $406,611 jockeying to become members of Congress, but only 30 percent of that total was invested in broadcast ads. Over the final six months of the 1994 campaign, candidates in open-seat contests spent 45 percent of their money on television and radio spots, but with only 48 of the 435 House contests falling into this category (not counting four races where the incumbent lost in the primary), it's hard to describe them as "typical" of anything.

    One might also expect that the average Senate candidate would spend a far greater proportion of his or her budget on broadcast advertising, since Senate races require communication with voters spread across an entire state. However, the difference is far less than many people might expect.

    In 1990, the average Senate incumbent spent $4,101,338, with $1,336,206, or 33 percent, going to broadcast advertising. North Carolina Senator Jesse Helms spent $17,957,151 on his 1990 campaign, but "just" $5,023,452 of that prodigious total, or 27 percent, was spent to produce and air his television and radio commercials. Helms sank more than twice that amount – $10,957,563 – into his direct-mail fund-raising effort. New Jersey Senator Bill Bradley spent $12,434,164 on his reelection campaign but invested only 27 percent of that total ($3,314,628) in television and radio commercials. Overhead consumed $3,878,383 of his budget; fund-raising costs amounted to $3,339,735.

    Two years later, with high profile races in California, New York, and Pennsylvania, the 28 incumbents who sought reelection and won their party's nomination spent an average of $4,149,198, investing 40 percent of that total in television and radio advertising. Overhead expenses for those same campaigns amounted to $1,034,377, accounting for 25 percent of total spending. The typical incumbent spent 21 cents out of every dollar on fund-raising.

    If one tosses out the $28 million Republican Michael Huffington spent from his own check book to pay his advertising consultants and time-buyers, the 1994 Senate numbers look almost identical to 1992. For example, while Republican Oliver North spent more than $20 million on his unsuccessful bid to unseat Virginia Senator Charles Robb, only about one-quarter of that total was invested in broadcast ads.

    Then there is the 1996 presidential campaign. Through the end of July, former Kansas Senator Bob Dole spent $40,451,981 to secure the Republican presidential nomination. Only $7,023,039, or 17 percent of that total, was invested in television and radio advertising. As of July 31, Dole's primary campaign payroll expenses, including federal and state withholding taxes, amounted to $6,003,223. His fund-raising outlays totaled $10,123,827, or $3,100,788 more than he spent on broadcast advertising.

    Through the end of July, President Clinton had spent $30,387,983 to position himself for his bid for a second term. Only after spending more than $4 million on television in June did his broadcast advertising outlays rise to $8,741,437, accounting for 29 percent of his total spending. More than $14 million of Clinton's primary campaign spending was consumed by basic overhead, including $5,322,736 for staff salaries and payroll taxes.

    Advertising is one reason modern campaigns cost so much, but it is certainly not the only reason. The process of reducing the cost of modern campaigns, if that is one's goal, is considerably more complex than the Sunday morning talk shows and reformers would have you believe. If people really care about the issue, it's time to stop looking for scapegoats and easy solutions. If journalists really care about informing their readers and viewers, it's time to let go of the myth.

    This article originally appeared on the PoliticsNow Web site.

    © Copyright 1998 The Washington Post Company

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