Biden's campaign has more money than Trump. But will it make it a difference at the polls?
RICK NEWMAN: From Yahoo Finance, this is "Electionomics." I'm Rick Newman.
ALEXIS CHRISTOFOROUS: And I'm Alexis Christoforous. Thanks so much for joining us. For the first time during this election campaign, Joe Biden is sitting on the biggest pile of cash, and he's using some of it to outspend President Trump 2 to 1 when it comes to political ads in some markets. Here to talk about it is Ben Taber with Advertising Analytics. Ben, thanks for being with us.
So here we are, the final stretch of this general election, and it looks like, according to some accounts, Biden has got more than $140 million more in the bank than Trump. You think about where we were just a few months ago, and Biden was struggling to raise money. What happened here?
BEN TABER: Well, over the course of the last couple months, we've seen a major change in the cash on hand situation, and consequently, the TV and digital advertising budgets. In June and July, President Trump was really outspending Joe Biden, and now that the tables have kind of turned over the last couple weeks, we've seen Joe Biden outspending Donald Trump, almost 2 to 1 in some markets in some key states.
And it seems like that's a trend that's going to continue.
RICK NEWMAN: Hey Ben, can you just set the stage for us here and tell us, how important is advertising for political candidates? There's this idea that money is so important in presidential elections, and there's so much of it in presidential elections. But then you say, well, what does money actually buy? And does the guy who-- or person who raises the most money automatically win? And of course, one of the things all that money buys is advertising. How important is all that advertising?
BEN TABER: Well, Rick, I think it's very important, but it's not everything. If you look back at 2016, Donald Trump spent only about $70 million on ads, compared to almost three times that from Hillary. So if you compare that from then to now, sure, he's getting outspent. But he was outspent by much more in 2016, and as we all know, he pulled off the victory there. So it's not the end all, be all, but it is really important.
When you're a voter in swing states, you really want to-- and you're a campaign targeting those voters-- you really want to put ads in front of them. Whether it's a positive ad or a negative ad, you really want put an ad in front of them so they're not able to respond. You want to put as many messages in front of voters as you can.
And they're not all the same message, right? You can run one ad on taxes, you run one ad on health care, you run one positive bio spot about yourself. And you're targeting different voters with these ads. So that amount of money gives you the opportunity to target different segments in different states, which is really key in a presidential race.
RICK NEWMAN: So you have some excellent data. I hope I'm going to get this right. So ad spending so far for Joe Biden and the Joe Biden and super PACs are-- all PACs associated with Joe Biden-- your total for that, added up, is $454 million. And then advertising for Trump so far-- and this includes advertising that's booked all the way into November-- $380 million. But can you explain where that advertising is taking place, and what the latest trends are?
BEN TABER: For sure. So there's kind of two tiers of presidential swing states right now, in terms of an advertising budget, and where that money is being allocated. The top six are really the old blue wall-- so you've got Michigan, Wisconsin, Pennsylvania, Florida-- obviously the largest swing state-- North Carolina, and Arizona is really the top tier that both candidates have been spending in pretty much since the beginning of the general election.
After that, you have a few more states that are seeing money, but aren't quite as saturated with ads, maybe. Where you've got your Georgias and your Ohio and your Iowas, and states like that, where there is some money, but it's not quite at the point of saturation, like we're seeing in those real top six states, Florida especially.
RICK NEWMAN: Are they going for the same states? Are they just trying to counter each other in the same states, and even in the same metro areas? Or do you see differences in strategy among where the spending is happening?
BEN TABER: Well generally, we've seen pretty much the groups try to match each other in the top six states. Recently, we're seeing some difference in strategy. Both campaigns had pre-booked a whole bunch of ads in the summer to run in these markets in those six states, plus Ohio, Iowa, Georgia, some others. And recently, we've seen some shifting of money from both of the campaigns.
The Joe Biden campaign is pretty much adding money everywhere. They're really playing in just about every potential swing state. They're adding money in Ohio and Iowa. Some of those longer shot races-- longer shot states with them. Whereas the Trump campaign is starting to come back--
RICK NEWMAN: Does that tell you the Biden campaign is flush with cash?
BEN TABER: It's a pretty good sign for them. They've gradually expanded their states over the course of the election. At the beginning of the summer, they were really, really focused on what I think of as those core six states. And then over time, they've expanded it out. So it's definitely a good sign for them that they're able to play in more and more states.
As we saw in 2016, it's really important to expand the battleground as much as possible. You can't chalk up certain states as a victory. It's important to play defense in Minnesota and Nevada, if you're Biden, and then potentially go on the offensive in Ohio and Iowa and some states like that.
RICK NEWMAN: And then the Trump campaign?
ALEXIS CHRISTOFOROUS: --Trump's strategy is-- advertising strategy-- because I see that he's pulling back in a lot of these battleground states-- a lot of swing states-- that he desperately needs to carry here, like Pennsylvania, like Ohio, Michigan. Why not spend at least what you've got in those key swing states?
BEN TABER: Well, he's not pulling out of all of those states entirely. Some of them, he's just cutting back. So he is cutting back in Pennsylvania and Michigan and Wisconsin. He's pulled out all of his money for at least this week in Ohio and Iowa. But he's reallocating that money interestingly. So it's going to Florida and Arizona and North Carolina, primarily. So he seems to be targeting a bit of a sunbelt strategy with the additional money.
And pulling some money out of Iowa and Ohio is not necessarily surprising. He is pulling in the lead in those states, and at some point as a campaign, it makes sense to allocate your resources to the very, very top states. Sure, you want to play everywhere, but you really have to win Florida if you're the Trump campaign, and Arizona and North Carolina are also crucial. So sometimes you have to make hard calls.
And they are still up in Pennsylvania and Michigan, Minnesota, Wisconsin. So they are still contesting those states very heatedly. It's Ohio and Iowa where we're seeing them totally cut back on a week by week basis, and those are states that they probably think they're going to win. They seem to be pulling in the lead at least in publicly available polling.
RICK NEWMAN: Hey Ben, so you guys track spending commitments in the future. So you've got numbers for spending in October and November for each of the candidates, and a breakdown by state. Does that mean that is money they have pledged to spend, or is that money-- have they already written the checks to the TV stations and things like that?
BEN TABER: That's a great question. So that's money they pledged to spend, but they haven't written the checks yet. So they can pull that money, and that's basically what we're seeing on a week by week basis for both of the campaigns. They're either adding or pulling in money, they've kind of got this baseline of spending, where both of them have reserved about $20 million, roughly, going forward on a week by week basis.
But over the last couple of weeks, we've seen the Trump campaign pull out of some states and reallocate to others, and the Biden campaign adding across the board. So they aren't yet committed. They haven't yet signed those checks.
RICK NEWMAN: So if you're looking for numbers for October, for example, that would tell you what their strategy is at the moment, but that's not necessarily how it's going to end up?
BEN TABER: That's exactly right. So like we've seen-- we saw yesterday, basically on Monday-- political flights usually run on a Tuesday to Monday basis, so we're seeing every Monday the campaigns are reassessing their buys, and they're either adding money in some states and subtracting in others.
So while it does look like parity on paper right now in October, the current trend is that the Biden campaign is adding a lot of money, and the Trump campaign is reallocating and pruning on the edges.
Now, that's not to say that they can't add a whole bunch of money in those states as well. Maybe they're saving back for a barrage right at the end, but that's kind of how the race looks on paper right now.
RICK NEWMAN: So I'm looking at the Biden commitments-- or the plans, at least-- for October. So ad spending for October. And you guys have a plan to spend about $11.8 million on ads in Florida. But what interests me is North Carolina is right behind, with 10 million ads. So about 12 million in ads for Florida, which is a huge, important state that has a lot more electoral votes than North Carolina, but almost as much spending slated for North Carolina. So what does that tell you about how the Biden campaign assesses the relative importance of North Carolina?
BEN TABER: It says that it's a pretty important state, and I don't think it's Florida, and I don't think anyone would say it's as important as Florida, but they are kind of putting their money there. If we look at where they're adding their money by week-- so yesterday, for this week, the Biden campaign added about $2 and 1/2 million in Florida, and then about $300K in North Carolina. So it does seem that they think that Florida is relatively more important, and they are adding much more money there. But that's a pretty considerable commitment for North Carolina.
ALEXIS CHRISTOFOROUS: Ben, is advertising likely to be a deciding factor for voters? I'm actually spending a lot of time in New York and Pennsylvania. New York, I'm not seeing as many political ads. Pennsylvania, I am, which I think goes to show how these candidates realize that Pennsylvania is an important swing state for them. But at the end of the day, what kind of impact does that really have on voters? We haven't had a debate yet, the first one's coming up. But how big a role does advertising really play?
BEN TABER: It does play a pretty major role, and in 2020, when you can't go out and knock on doors-- the Biden campaign said they're not going to knock on doors-- it's one of the primary ways of reaching voters, and putting a message in front of them. And it probably isn't going to persuade most people, but you don't need to persuade most people. If you look at 2016-- 100,000 votes across three states, which is a pretty small percentage of overall votes cast-- if you change a couple thousand votes in each county, you're looking at a pretty major swing. 2000 was decided by 500 votes.
A presidential election tends to come down way to the margins, and any marginal change you'd have around the edges, even if it's just a couple percentage points you're playing with in each state, that's enough to swing the election one way or the other.
RICK NEWMAN: Alexis, I'm not lucky enough to travel to a swing state like Pennsylvania on a regular basis, and sometimes I wish I saw what goes on in the advertising climate in one of these swing states, but then other times, I'm glad I don't have to deal with it, because it seems, Ben, like it just becomes saturation coverage with ads as you get into the last couple of weeks in these swing states we're talking about. It used to be Ohio, I guess it's not so much Ohio. But clearly, Pennsylvania, the others we're talking about, North Carolina, Florida, Michigan, Wisconsin, and even Minnesota, very important, and Arizona.
ALEXIS CHRISTOFOROUS: You're not missing much. In the beginning, it was sort of entertaining. And remember, I'm always looking at these things through the lens of a journalist, but these ads are running ad nauseum. I can verbate what they're going to say. And sometimes, it's just comical. Especially when they run opposing ads next to each other, it's a lot to take in. I think we've spared you, Rick.
RICK NEWMAN: Well, so Ben, the question is, there has to be sort of a diminishing return on some of these ads. And you made an important point earlier, that look, if it comes down to a few hundred or a few thousand voters, those ads are still important. But what do we know about the effectiveness of ads late in the campaign, when people have just been bombarded with them for weeks? Do they still work?
BEN TABER: Well, I think they do work. And there's a certain factor that a lot of people do get sick of them. A lot of people know they're going to vote either way. And it's not so much about convincing voters, a lot of the time. There's this idea that there's swing voters in the middle, and you want to pull them to the left or to the right. But a lot of the campaigns aren't operating like that. They're operating in the sense that there are certain voters you need to turn out based on certain issues. So you might run an immigration ad or a health care ad or a taxes ad.
And it's just about turning out a certain segment that cares about an issue. So there is some ROY on turning out certain voters, and running a whole lot of different issues to hit on issues that'll really matter to certain subsets of voters.
RICK NEWMAN: So it's like those late ads, like even the day before the election, or two days before, there might be some instances where that makes a difference and actually persuades somebody-- oh, I wasn't really planning to vote, but yeah, now I've got to get out and vote?
BEN TABER: Yeah, I mean that's what the numbers say. It's kind of hard to believe. I think a lot of people-- a lot of journalists, a lot of people in the industry think everybody is going to vote, and everybody's super plugged in all the time. But there are a lot of people who are inconsistent voters, or who don't vote every election. And really playing to them, and really talking to them about what matters to them, is really important for getting people out to vote. And that can be the difference in an election.
I think a lot of people think that President Trump turned out voters that maybe Hillary Clinton wasn't even talking to in 2016, and that was key to winning some of those Midwestern states in particular. So I do think it does make a difference, even if most people do get sick of them.
ALEXIS CHRISTOFOROUS: Should President Trump's ads be more focused on, perhaps, Black voters or Latino voters? I know that I've seen some Spanish language Biden ads on TV. Or does Trump-- basically, does the Trump camp think, we haven't wrapped up that demographic, and we're not going to, so let's not waste our time there?
BEN TABER: They're actually advertising pretty heavily to Spanish speaking voters, especially in Florida and Arizona. They're actually running pretty heavily there, and it seems like it's being somewhat successful. I've seen some polling showing that he's actually doing better amongst those voters than he did in 2016.
And sure, it's not about necessarily winning the segment, but if you can hold down your opponent's margin with certain key demographics, then it does help you. You don't have to win all of them, but if you can peel off 5% from a couple of different demographics, that can really make a big swing in a state like Florida, where you have a whole bunch of different groups that you're really talking to. So I do actually think they're running a lot of those ads, and they've been pretty successful with them, from what I've seen.
RICK NEWMAN: Ben, you also track money spent advertising nationally, I believe. And what I'm noticing here is, for October and November-- so the Biden campaign is planning about $18 million in national ads in October, and another $4 million in November. And Trump, there is no figure for Trump to do national advertising in October or November. Is that just a reporting thing, or does the Trump campaign-- have they actually decided they don't need to do national advertising at this point?
BEN TABER: That's more of just a reporting thing, I think. I think they will certainly be playing in those spaces. We saw them run some ads during football last week, and I think we can probably expect that to continue. We did see the Biden campaign book that all at once, but I think that is definitely a space the Trump campaign will be competing in.
RICK NEWMAN: So back in 2016, Trump-- and Trump knows this-- he got tons of what they call free media, just because he's such a bomb thrower and he generates so much controversy, and the media can't stop covering. And now he's doing the same thing, and he's president. Is there any way to calculate the value of the free media, relative to the actual spending on paid ads that you track?
BEN TABER: Well, Rick, that's not something we really track. But one of the interesting things about there-- and that free media is tremendously important. It's one of the advantages of being an incumbent, and he really generated that through his own personality and the interest he's able to generate around himself in 2016. And he continues to do so, obviously, as president.
But one of the advantages of paid media is that you can put it in front of the voters who you want to put it in front of. If you're talking on-- if you have CNN covering you, and you're the president, that doesn't really necessarily-- even if it's in a negative light, that doesn't necessarily help as much as key ads, placed in front of swing voters in key states.
So there is a big advantage to having free advertising around you. But there's really more value to putting the message you want to put in front of voters, that you want to talk to.
ALEXIS CHRISTOFOROUS: Talk to me about digital advertising, and who's outspending whom there. How important is that presence on social media? I'd imagine that's the campaigns targeting a younger demographic.
BEN TABER: Well, it's interesting. So over the summer, President Trump was spending a ton of money on Facebook and Google, which is what we're able to track digitally. Recently, that gap has narrowed a bit. But overall, President Trump has outspent Joe Biden digitally.
One of the interesting things, though, about Facebook and Google advertising is it tends to differ from TV in that, on Facebook and Google, you're generally talking to your base. A lot of that is more fundraising, it's sign my newsletter, sign up, give me a donation, that kind of thing, versus TV ads that are more long form, persuasive ads. So we find that a lot of digital advertising-- almost 3/4 of it, 2/3 of it at least-- is a direct response, fundraising type of advertising, which differs a little bit.
And also, there's an idea that Facebook and Google is really targeted towards young people, and in a lot of ways it is, but my grandparents are on Facebook, and they use it pretty frequently, so I think Facebook is a good way of talking to everyone, not just young people anymore.
--response, fundraising type of advertising, which differs a little bit. And also, there's an idea that Facebook and Google is really targeted towards young people, and in a lot of ways it is, but my grandparents are on Facebook, and they use it pretty frequently. So I think Facebook is a good way of talking to everyone, not just young people anymore.
RICK NEWMAN: How pronounced is the shift over to digital ads? I'm sure there's been a trend line, as with everything in the media, over to digital. Do you see a point at which digital ads online will be more important than TV and radio ads?
BEN TABER: I actually think it's almost a positive feedback loop for both of them, where money going into digital is primarily fundraising, which then, sure, allows you to spend more on digital persuasion ads, but also allows you to run more TV and radio ads. So I actually really think that they work hand-in-hand. It's not so much either or so much as digital is a really good fundraising tool for these campaigns. It almost replaces mail in certain ways. It's really a fundraising tool, more than anything.
RICK NEWMAN: And Ben, doesn't it happen that in key markets, they just run out of ads to sell? There actually is a finite amount of TV and radio advertising. I don't know if-- I'm trying to think, could there be a finite amount of Facebook advertising, and maybe not exactly the same, but in some markets, the ad inventory just sells out, doesn't it?
BEN TABER: You can pretty much always get your ad on air if you're willing to pay enough. The problem is, the rates go up really high, and that's why we see them pre-booking a lot early on to kind of lock in those lower rates, so you're at least guaranteed a certain amount of inventory at a lower rate. Because you then have to pay more. When you're going into Tampa and Orlando and Phoenix right now, you're going to have to pay a lot of money for it. So it is advantageous to book early, and that's why we see the campaigns kind of lay those in early.
ALEXIS CHRISTOFOROUS: You know what I'm wondering, guys? What's going to be the next catalyst for raising money for these-- I get that there's a timeline, and the closer we get, maybe that will invigorate some deep pocketed folks to give more money, but does the death of Ruth Bader Ginsburg mean that Joe Biden's coffers may get a boost from that?
RICK NEWMAN: Yes. Apparently, that's already happening. Democrats are already saying that in the first three days after RBG died, they were saying they pulled in $100 million in new donations. So I guess it's going to probably be higher than that.
Ben-- I don't think this is in Ben's wheelhouse, but comment if you want, Ben-- but we're apparently going to have a Supreme Court justice nomination process in the Senate in September and October. It looks as if that's going to go through. And probably both sides are going to be pushing to use that as as a fundraising catalyst.
At the moment, that might-- it seems like that might benefit Democrats and the Biden campaign, but I'm not 100% confident, but we'll find out. It's never really quite happened like this. We'll find out as--
ALEXIS CHRISTOFOROUS: I'm also curious if that's going to come up in any of their ads. Will the content of the ads be around who's going to replace RBG?
RICK NEWMAN: Ben, have you noticed whether that's come up in any ads yet?
BEN TABER: Well, I was actually looking at that this morning. And it is still very early to cut an ad and get it on air, and we haven't seen anything on the presidential level. But in the Senate, Sarah Gideon is already running an ad, saying that Collins will be a rubber stamp.
RICK NEWMAN: She's running against Susan Collins-- the incumbent Susan Collins of Maine.
BEN TABER: That's correct. And Susan Collins has said she won't vote on the replacement, but Gideon is already up with an ad saying that you need to replace Mitch McConnell as majority leader. Judicial Crisis Network is running an ad on network cable saying that they need to vote to replace Justice Ginsburg as soon as possible. So there's already some advertising around it. We haven't seen it explicitly--
RICK NEWMAN: On both sides.
BEN TABER: On both sides, yes. We haven't seen explicitly in the presidential yet, but I wouldn't be surprised if that becomes a topic of conversation.
RICK NEWMAN: Ben, I want to get to this before we run out of time here. So what we've been talking about is spending by the campaigns themselves. The Trump campaign and the Biden campaign. You also track spending by outside groups-- those are political action committees and super PACs-- it looks to me like that's on the order of about 1/3 the amount of spending that the campaigns themselves are doing, at least so far. How important are ads by run by PACs and super PACs, and are they getting more important, less important, about the same as in 2016, or what?
BEN TABER: Well, they always have their place. They are very important. You can see these groups are very active in coming in and filling holes. When President Trump went off the air in, say, Pennsylvania in August, America First Action came in and filled that hole, which is a really good use of a super PAC, to come in, and if the candidate is saving money in a place that the PAC can fill that hole.
So PACs are definitely important. The advantage of spending through a candidate is that the candidate is guaranteed the lowest rate. So PACs actually spend more to run the same amount of ads. So it's more efficient to have as much of your fundraising as possible going through the candidate and going through the committees rather than being spent by PACs. So there's certainly value there, and they provide a tremendous value for the campaigns to come in and fill holes, and maybe run some ads that the campaigns don't really want associated with them, maybe so much explicitly, but they really do play a lot of value in kind of supplementing the campaign. But the campaigns do have an advantage in the rates they get for TV ads, so you can get more bang for your buck with them.
RICK NEWMAN: Just a quick one here. One of the rules for Super PACs is they are not supposed to coordinate with the campaign they support, and I think a lot of people feel they do it anyway. It's kind of a wink and nod, even if there's some way to do it without exactly having a meeting at campaign headquarters. Could a super PAC simply look at the ad spending schedule of a campaign and deduce, on its own, that there is a hole that they could step in and fill?
BEN TABER: Yeah, exactly. And that's exactly what they do, and that's entirely legal, and it's a smart use of data resources to fill in, to go in and see they don't have any ads booked here, in say, Pennsylvania, and we're going to go in and fill that hole while they're off the air. That's not coordination at all. That doesn't require any communication between them. That's a good use of data, to come in and kind of supplement the campaign from an outside perspective without any coordination.
ALEXIS CHRISTOFOROUS: I don't know about you guys, I am bracing for more of those ads. We will be inundated, depending on the state you're in, you will be inundated. Ben Taber of Advertising Analytics. Thanks for being with us on the "Electionomics" podcast.
BEN TABER: Thanks a bunch, guys. Have a good one.
ALEXIS CHRISTOFOROUS: All right, you too. And be sure to rate and review what you just heard and saw. You can always follow me at @AlexisTVNews.
RICK NEWMAN: And me at @RickJNewman.
ALEXIS CHRISTOFOROUS: All right, everybody. We'll see you next time.
RICK NEWMAN: Bye!