Politics & Policy

In Politics, Money Still Talks, but It Keeps Its Voice Down


Last summer, it looked like Newt Gingrich’s White House bid might be finished. In June, several top aides resigned amid the campaign’s money woes, and since then the former House speaker has pursued the Republican nomination on a shoestring budget. With his campaign $1.2 million in debt at the end of September, Gingrich has run almost no TV ads.

And yet on Dec. 3, Gingrich led the GOP field in a Des Moines Register poll. He was supported by 25 percent of likely voters in the state’s January caucuses and trailed by U.S. Representative Ron Paul and former Massachusetts Governor Mitt Romney. “Newt’s resurgence has proven that you can get by on very little money for a long time,” says Alex Vogel, a Republican strategist and lobbyist not affiliated with any candidate.

Gingrich’s improbable rise is evidence of a strategic shift by Republican candidates, who are skimping on television advertising to conserve whatever cash they have. As of Sept. 30, the close of the most recent campaign financial reporting period, the top nine GOP candidates had spent $53 million, 60 percent less than the top nine Republicans had at the same point in the 2008 primary. This year’s number is lower even than early expenditures in the 2004 and 2000 contests, when most candidates abided by spending limits entitling them to matching federal money.

As of Dec. 5, the candidates and their allied political action committees had purchased only $3.1 million worth of television ads in Iowa and New Hampshire, 76 percent less than the $13.1 million spent by Republicans at the same point in 2007, according to the Campaign Media Analysis Group, a researcher in Arlington, Va. Instead, the candidates have promoted themselves by milking free television exposure from the campaign’s numerous debates and amplifying their message online. “New Media is more significant than four years ago,” says Tobe Berkovitz, a communication professor at Boston University who has worked on more than 50 political campaigns. “It has an imperative, a life of its own.”

With Democrats united behind President Barack Obama, the GOP debates are the only spectator sport in town. And with moments such as Texas Governor Rick Perry promising to eliminate three federal government departments but only remembering two, they’re a good show. “The debates and the daily drama of the Republican Presidential primary are the new early primary TV ads,” says Ken Goldstein, president of Campaign Media Analysis Group.

Gingrich posts to YouTube almost daily, with his videos pulling in anywhere from a few hundred to tens of thousands of views. They range from lectures on Medicare to a discussion of his favorite founding father (George Washington) to highlights of him in the debates. Perry has uploaded dozens of clips to YouTube, including an ad that shows a video of his memory lapse and makes light of the moment that may well have ended his chances of winning. Berkovitz says such fare gets a “gazillion views” online. Both Romney and Perry have poked fun at themselves on the Late Show with David Letterman, and Paul has attacked Gingrich in a YouTube video that shows the former speaker chatting amiably with House Minority Leader Nancy Pelosi about the dangers of global warming.

The candidates have also stepped up their use of social media and search advertising. Cain, for instance, used Twitter to defend himself against allegations of sexual harassment. “Those who know Mr. Cain the best also know the suspiciously timed allegations are completely FALSE!” his staff wrote in one tweet. After Cain suspended his campaign on Dec. 3, Gingrich bought Google (GOOG) search terms relating to Cain. Displayed next to search results about the former candidate were Gingrich ads saying “Cain is Out Support Newt.” Cain earlier paid to place ads next to Google searches for “Ginger White” after a woman by that name said she had had a 13-year affair with him. Perry is running Facebook ads targeting Cain supporters.

All this is a lot cheaper than TV spots and is a boon for candidates with money worries. Gingrich has kept himself in the race on the strength of the debates, in which he has stayed largely positive and reserved his sharpest criticism for Obama, not his GOP rivals. “The speaker’s good showing in the debates kept gas in his tank,” says Republican strategist Greg Mueller, who has advised Steve Forbes, Pat Buchanan, and other Presidential candidates in the past. “The debates were the big surprise of the primary so far. First, they made the Herman Cain candidacy, and now they are making Newt’s.” Of course, Gingrich has also benefited from the distrust that many Republican primary voters have for Romney, whom they don’t consider to be a true conservative.

Now, as the race heats up in Iowa, a TV ad war is in the offing. In early December, Romney unleashed his first spot in the state, in which he touts his credentials as a “conservative businessman.” Gingrich responded with his first Iowa TV commercial, promising to restore America to its former glory. To keep it up, he will need cash, and fast. In early December, his campaign manager, Michael Krull, e-mailed supporters extolling his boss’s “masterful debate performances.” Send money, Krull pleaded, “whether it’s $5 or $2,500.” Anthony Corrado, a campaign-finance expert at Colby College in Waterville, Me., says the race has been very unsettled and that “a lot of contributors are sitting on the sidelines waiting for the mists to clear.” Until they do, Gingrich might be well advised to keep uploading those YouTube videos.

The bottom line: As of Dec. 5, GOP candidates and their PACs spent $3.1 million on TV ads in Iowa and New Hampshire, down from $13.1 million in 2007.

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Leonard is a staff writer for Bloomberg Businessweek in New York.
Jensen is a reporter for Bloomberg News.
Salant is a reporter for Bloomberg News in Washington.

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