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Are Elections Too Expensive?

            In the wake of the 2012 elections, where there seemed to be no shortage of campaign funds, people are asking whether political campaign spending has exceeded reason.  If one lives in a town or county targeted as a “swing” or “toss-up” location, TV and radio ads saturated the airwaves, tons of direct mail pieces hit your mailbox, and yard signs were everywhere.  However, on a national basis, spending on political campaigns is actually pretty modest.

 

Cost Per Vote/Cost Per Voter

 

            Barack Obama and Mitt Romney received about 120½ million votes in the 2012 presidential election.  Estimates from OpenSecrets.org indicate that the two campaigns, plus unaffiliated groups spending money in support or opposition to either candidate, spent about $2 billion on the Presidential race, with about 52.5% of the total spent by or for Mitt Romney and 47.5% spent by or for Barack Obama. 

 

            Dividing the total spent by the number of votes results in about $16.60 per vote cast in the 2012 Presidential election[1].  Of course, not everyone eligible to vote actually voted, so the amount per eligible voter spent by the two campaigns would be about $9.60[2].  Even if one assumed the Presidential campaigns were only trying to reach registered voters and not attempting to influence non-registered adults of voting age, adults ineligible to vote (due to citizenship status, criminal convictions etc.), or children under 18 on Election Day, the amount spent per registered voter would be somewhere around $12. 

 

            Whether we argue that the figure is $9, $12, or $17, it’s clear that the amount spent per voter is insignificant when compared to a typical person’s budget - somewhere between a fast-food meal and a large pizza or two movie tickets. 

 

Cost of Governmental Services

 

            But $2 billion is still $2 billion.  A lot of money to an individual, family, or even a typical business.  Interestingly, however, it’s also the amount Mayor Michael Bloomberg asked New York City agencies to cut from their budgets over the next 18 months.  It’s the same amount of money the US government spends every five hours, assuming the government is spending money at the same rate 24 hours a day, 7 days a week.

 

Cost of Advertising & Marketing

 

            Another way to look at $2 billion is to think of it as an advertising budget.  After all, political candidates are a “product” that need to be introduced to the public, have awareness built, foster affinity, and build a call to action, culminating with a “purchase” by the vote at the ballot box.  Good advertisers know there are keys to successful advertising, which include targeting the right potential buyers, reinforcing the message through repetition and appearances in different media, etc. 

 

            Presidential candidates, however, have a more difficult time with advertising than most national products and brands because their campaign is time-limited (Coca-Cola has generations to cultivate brand awareness; a candidate has a matter of months).  In addition, candidates have to tell their story against a backdrop of not only their competition, but also the traditional and new media (TV, newspapers, radio, web sites, blogs, etc.) whose messages about the candidates often conflict with the candidates’ own messages. 

 

            One US-based corporation, Procter & Gamble, has 24 “billion-dollar brands” in its portfolio of products which generates $80 billion in revenue each year.  Corporations spend between 1% and 10% of gross sales on advertising & marketing; a modest 1% ad budget would cost P&G $800 million a year, according to this metric.  It can be argued that each of the billion-dollar brands would support an ad budget of $10 million to $100 million, far less than the cost of a Presidential campaign; however, the Presidential candidates have a shorter time to run their campaign and they face active interference with their message from third parties as well as their competitors.

 

            McDonald’s is an international brand which spends over $2 billion on advertising each year, or about 7.5% of annual revenues.  It’s unclear how much of that total is: 1) spent in the US; and 2) is spent on the hamburger chain and not its other restaurant properties, but even assuming a significant adjustment for those two factors, McDonald’s is a single corporation with a large US advertising budget.

 

            Of course, not all advertising is equal, and political ads come in for a lot of criticism as being juvenile, misleading, simplistic, and even offensive.  While this can be said of ads for all kinds of products, it’s all the more difficult to accept when we hope and expect that candidates take the process, and we, the voters, seriously.  There’s a temptation to say voters don’t get much value from political advertising.  Two points: 1) sometimes a bad campaign unintentionally reveals the shortcomings of a candidate or campaign.  That conveys information value to the electorate, albeit a message unintended by the campaign; and 2) people are rarely advised to buy a product, especially a major purchase or a durable item, based solely on ads.  Ads are one step in the decision-making process; they also go to the store, talk to their friends, read product reviews, etc.  Similarly, political advertising conveys messages that should be examined by voters before election day.  There is a wealth of additional information, both biased and unbiased, available to the voter to evaluate the candidates’ advertising message.

 

Salaries of Officeholders

 

            In fairness, there are some ratios which make almost all political campaign costs seem ridiculous. Perhaps the most extreme is comparing campaign costs with political salaries.  Spending $1 billion to get a job that pays $400,000 plus benefits for four years is a poor return on investment, even if some of the benefits are exceptional (mansion, vacation homes, use of multiple private aircraft, office space and staff for life, pension, etc.).  The same ratios are applicable to state and local offices, where a candidate may spend thousands of dollars to win an office which doesn’t pay much more than travel expenses, and, in many cases, pays less than a typical full-time managerial position in a mid-sized company.

 

            Few people seriously value a political office by its paycheck, because the potential of the office is in its ability to assert influence or control over government systems and, indirectly, the public.  The value of assuring that the right candidate is elected - or that the wrong candidate is defeated - is far greater than the salary offered to the office holder.  A corollary to this argument is the widely-held suspicion that anyone seeking office as a way of increasing their income or improving their economic status is somehow unworthy of consideration.

 

Conclusion

 

            There are a lot of ways to break down political campaign costs, but most of them result in the same conclusion: for something as important as the Presidency of the United States, $9 or $12 or even $17 per voter or vote is not too much to pay to get and keep my attention, tell your story, and inspire me to support you with my vote on Election Day.  We spend far more on far less in this country all the time.



[1]It’s unclear whether the spending estimates include: 1) primary election costs;  or 2) “related expenditures” by labor unions which are reported to the US Department of Labor but which are not reported to the Federal Election Commission. 

[2]US Census estimates 207,643,594 eligible voters as of July, 2012