return on investments in iowa caucus tv advertising
it must have been truly painful to watch the 10 o'clock news in des moines this year. according to a cnn report of campaign media analysis group data, most of the major presidential candidates spent in excess of one million dollars on iowa television advertising alone. when the smoke cleared after the caucuses, mike huckabee appeared to get the greatest bang for his ad buck.
i'm certainly no expert in campaign spending research, but i thought it would be fun to plot the bivariate association between advertising dollars and caucus election results. i only found six CMAG data points for the figure above and a linear relationship seems implausible. still, after creating a scatterplot, i couldn't resist peeking at the correlation (r=.45) between a candidate's iowa television spending and the percentage of iowa voters who selected that candidate.
that leaves a lot of unexplained variation, of course, which means that the candidates got wildly varying rates of return on their advertising investments. whereas mike huckabee paid about $41,000 per percentage point, it cost willard "mitt" romney about $280,000 in advertising dollars per point. senators obama and clinton were only slightly more efficient in turning advertising dollars into a relative vote gain.
candidates who accept federal matching funds cannot spend more than $45 million on total primary expenditures, which i'm sure accounts for the more modest iowa advertising budgets of john edwards and john mccain. nevertheless, spending on the early primaries can quite literally be characterized as an investment. according to the washington post, a good showing in iowa yields both political momentum and a "deluge of money" from new donors. in at least two senses of the phrase, campaign financing thus appears to be state-dependent.
one hopes that elections are about much more than advertising dollars, but i can imagine that advertising agencies might view the second chart as an indicator of ad effectiveness or quality. the admakers for winning candidates will no doubt claim at least some of the glory, while admakers for the also-rans must offer some sort of lipstick-on-a-pig defense. my advice? hire the creative geniuses behind this one.