3rd quarter campaign spending increased, a sign of things to come

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PHOTO
Republican presidential hopefuls former Massachusetts Gov. Mitt Romney and former New York City Mayor Rudy Giuliani talk to each other after the GOP Presidential candidates debate at Ford Community and Performing Arts Center Tuesday, Oct. 9, 2007, in Dearborn, Mich.
(AP Photo/Carlos Osorio)

WASHINGTON - Fergus Cullen, New Hampshire's youthful Republican Party chairman, takes notice of these things: The ninth piece of mail from Rudy Giuliani, the second missive from Mitt Romney in two weeks, a new campaign staffer for one of the presidential campaigns

John McCain is renewing his television ads in the state. Romney is airing a new commercial. Barack Obama is up with his second ad. Hillary Rodham Clinton is on the air and Ron Paul is on the radio.

In Iowa, Democratic presidential candidates have already spent as much time in the state in the past two weeks as they did the entire month of September.

Presidential candidates, some flush with money in the bank, are ramping up their mail and media and travel in Iowa and New Hampshire, continuing a trend that began in earnest last month. Clinton and Obama are especially well-positioned to spend, ending the third quarter with nearly $35 million and $32 million. That's more than twice what Giuliani, who led the money race for Republicans, had in hand.

Overall, the campaigns spent $123 million in the third quarter, compared to $107.4 million in the second quarter and $51.5 million in the first three months of the year.

Campaign finance reports filed Monday with the Federal Election Commission show a post-Labor Day spending increase in several of the campaigns as they headed into the fall stretch the final push before the early contests that can make or break a presidential bid.

"This is the time when the money is going to go out the door very quickly," said Tad Devine, a top adviser in Al Gore's and John Kerry's presidential campaigns. "In large part that's because the process is so front-loaded."

Several campaigns spent more than they raised in the July-September period, a function of dry summer fundraising and a need to use paid media television, radio, mail sooner than ever before. Of the leading candidates in both parties, only Clinton and Republican Fred Thompson raised more than they spent.

McCain also raised more than he spent, but that amount included paying off a hefty debt.

Obama hit the Iowa airwaves in July and spent $3.5 million on media buys and production during the quarter. Clinton, who went on the air in Iowa in September, spent $1.7 million on media during the quarter. Romney, who has been airing ads in Iowa since January and has also been frequently on the air in New Hampshire, spent $6 million for the quarter on media, his biggest single expense.

"There is more money being spent," said former Iowa Democratic chairman Gordon Fischer, an Obama backer. "There are more ads than we've seen in the past."

Giuliani, who spent $13 million in the quarter, has yet to spend on television commercials, concentrating instead on radio and print advertising and an aggressive direct mail campaign. He reported paying more than $1.2 million to Republican direct marketing consultants Olsen & Shuvalov from July through September.

Giuliani is bound to hit the television airwaves at some point, but so far his campaign seems satisfied with the inroads he is making reaching voters with radio ads he has more radio spots than any other candidate and with his mailings. He is the front-runner in national polls and is competitive with Romney in New Hampshire.

Of the leading Republicans, McCain, running a reconstituted campaign after shaking up his staff, was in the weakest financial posture. He had more than $1.6 million cash on hand for the primaries and an outstanding debt of more than $1.7 million. McCain aides said the campaign negotiated with various vendors to pay them back in 2008. Among those vendors is an Internet consulting company, 3EDC, that is co-owned by McCain campaign manager Rick Davis and is owed $585,000 by the campaign.

"We have a debt that is a long-term debt, but we have cash on hand in order to fund the advertising we need to fund," McCain said in an interview with The Associated Press on Tuesday.

He also cast doubt on the possibility of taking public matching funds, though the campaign structured his FEC report so that he would be in a position to accept the federal money.

Poised or not to spent ad money in the weeks ahead, the campaigns have yet to begin securing air time, in part, because the dates of the Iowa caucuses and the New Hampshire primaries have not been set officially.

"Right now everyone is waiting to see when the caucus is going to be," said Anne Marie Caudron, the national sales manager for Des Moines KCCI-TV.

The thirtysomething Cullen said the uncertainty about the New Hampshire primary has also kept the campaigns in a state of suspended animation.

"I haven't seen a sudden shift in spending here yet," he said.

Devine predicted that the amount of money candidates have to spend and the compressed primary schedule will alter media strategies, encouraging some candidates to spend early in expensive markets in big states that are having their primaries Feb. 5.

"Because the calendar is so early and congested and, I guess, still somewhat unsettled," he said, "People are going to make investment in some of these later states even before the verdict is in Iowa and New Hampshire."




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