TNS Media Intelligence/ Campaign Media Analysis Group March 27, 2008 The “Business” of Politics The 2008 Election Forecast Update

2 Located in Arlington, VA Providing insights on political ad spending since 1997 Track, analyze and forecast political public affairs and issue-advocacy advertising Experienced political researchers assemble the most reliable comprehensive research and reporting Help clients better manage their media strategy, media buys, public relations and communications efforts TNS Media Intelligence/CMAG

3 Elections and the Media Economy Campaign 2008 Election Spending Forecast The political marketplace The spending drivers The Forecast by the Numbers The race for the White House The House and Senate State and local The Role New Media Not a banner year Ask Chuck

4 Campaign 2008 Election Spending Forecast: The Political Marketplace

5 The Uniqueness of the Marketplace Four year business cycle - Majority of ad spending in final 60 days before an election Upward growth in ad spending - Multi-level messaging - Changes to campaign finance laws - More campaigns using TV advertising Event driven “The Democrats' project is being considered a new benchmark in the trend toward ‘permanent campaigns,’ which specialists said is transforming the political culture.” - The Boston Globe The Changing “Business” of Politics: The Political Marketplace

6 The Changing “Business” of Politics: Total Spend in Comparison ( ) $ billions % from % from 2004 $1.0 $1.7 $2.6 Total Ad Spend Total TV Spend $2.4 $.2 Total All Other Media*

7 Campaign 2008 Election Spending Drivers CMAG Forecast: $3 Billion on Campaign Ads 12 percent of total and climbing Spending Drivers: Historic presidential race State and federal races Well-funded special interest groups $ million on issue advocacy

Forecast By The Numbers Presidential Other Federal State and Local

9 Campaign 2008 Election Spending Forecast: By the Numbers Breakdown of 2008 Forecast vs. Actual 2008 Presidential Race: Candidate $ million$89 million* Party$ million $106,000 Groups$ million $14 million * January-March 18 th 2008

10 Campaign 2008 Election Spending Forecast: By the Numbers 2008 Race for the White House Primary Overview: Over $210m on TV since February 2007 Democrats combined spending $106m vs. $57m for the GOP Majority of “group” spending on issues Ad spending focused on early states - $87m spent on TV ads in IA, NH and SC - Contests by contest focused

The Democrats: The Strategy Barack Obama Spending: $52m on TV - Outspent Clinton in 35 out of 41 states - 41 percent of recent ad spending in prime time Strategy: - Go on the air first in key states - Focus buys into population centers - Use local and national surrogates in some ads - Using niche media to fortify Hillary Clinton Spending: $35m on TV Strategy - Heaviest in the “must win” state - First to use negative ads

The Republicans: John McCain Spending: - $9.5m on TV - Minimal spending post-Florida Strategy: - “All in” in New Hampshire - Ride the momentum Message Strategy: - Disciplined - Biography and service

The Others Candidate No Bloomberg Yes Nader Maybe others? Groups $50m in primary Groups pledged $700m Typically used for issue awareness Recent ads more tactical General election ads beginning from groups on the left

14 Campaign 2008 Election Spending Forecast By the Numbers Breakdown of 2008 Forecast vs. Actual 2008 US Senate: Candidate$ million $1.8 million Party$ million $0 IE$10-20 million $100K US House: Candidate$ million$10 million Party$ million$1.3 million IE$20-50 million$2.4 million

15 Campaign 2008 Election Spending Forecast: By the Numbers US Senate - Sea of red - GOP on defense - Groups engaged US House - Historic number of competitive seats - Retirements adding primaries

16 Campaign 2008 Election Spending Forecast: By the Numbers Breakdown of 2008 Forecast vs. Actual 2008 State and Local Governors$ million$3.1 million Ballots$ million$114 million Judges/AG$50-60 million$3 million Other$ million$11 million Issue:$ million$77 million

17 Campaign 2008 Election Spending Forecast: By the Numbers Governors - 11 states holding governor elections Ballot Measures - 28 States - Affirmative action, abortion, healthcare, gaming, gay rights, taxes immigration and unions - Over $100m in CA on round 1 of 3 Issue Ad Spending - Energy, environment, and telecom

18 Campaign 2008 Election Spending Forecast: The Perfect Storm States of 2008

19 The Role of the New Media

20 Top tier presidential campaigns Online ads mostly used for fundraising and grassroots $3-4 million total spent Top sites – local and national news, ideology, demographic, sports and election Mistakes and perception Campaign 2008 Election Spending Forecast: The Role of the Internet in the 2008 Election

21 Looking Ahead: 2009 Start of a new political business cycle Winning strategies will show the way Make-up of US House and Senate 2008 issues drive 2009 issue ad spending: Economy China and NAFTA trade Healthcare Energy Iraq 2010 redistricting Rethink primary process

22 Ask Chuck

23 Past, Present, Future