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The Latest Campaign Spending Increases and What They Mean for the Race

With just nine days to go until the presidential election, new data from the National Journal shows ad spending surging in the so-called “Firewall” states as the Romney campaign tries to find paths to 270 and Obama tries to guard against Romney’s increased spending.

The Romney campaign and their allied Super PACs (Team Romney) doubled spending in Iowa, Nevada, and Wisconsin—three states that figure prominently in any path to the presidency without the critical states of Ohio or Virginia. In those two states, Team Romney increased spending by an additional 60 and 70 percent—an incredible sum for two expensive states already heavily saturated by ads. In a telling indicator of Virginia and Ohio’s importance, Team Obama matched Team Romney’s increase percentage point for percentage point—something he didn't do in Iowa, Nevada, or Wisconsin. And despite substantial increases, Team Romney is not concentrating a relatively large share of their resources in New Hampshire and Nevada, at least in comparison to Team Obama. In Iowa and Wisconsin, on the other hand, Team Romney’s big spending increase was enough to give them a wide advantage over Team Obama. In both states, Team Romney is outspending Team Obama by more than 80 percent—nearly 2-to-1.

As mentioned last week, reading too much into ad spending strategy can be a perilous exercise, since it can often be interpreted both ways. Increased spending in Wisconsin and Iowa can either be read as a sign that Romney is on the offensive or as a desperate attempt to circumvent Ohio or Virginia. For a historical comparison, consider McCain’s all-in move in Pennsylvania and Obama’s spending in North Carolina four years ago. Those two moves looked similar on paper, but they took on fundamentally different meaning in the context of the race. Unfortunately, the state of the race is not as clear in ’12 as it was four years ago. The battleground state polling is consistent with something akin to the “circumvention” explanation, but Romney’s improvements nationally make the “offensive” explanation plausible, as well.

But while Romney is outspending Team Obama in every battleground state, news reports and CMAG ad data suggest that inefficient ad placement and higher purchasing rates for outside groups have allowed Obama to air ads at a similar pace to the Romney campaign. Nonetheless, Team Romney is now outspending Team Obama by a greater than 50 percent margin in North Carolina, Florida, Iowa, and Wisconsin, and it seems hard to imagine that such a large discrepancy wouldn’t start to outweigh losses in efficiency, at least at a certain point. The Obama campaign’s decision to let Romney maintain such a large advantage in those three states may be a sign that they consider them less important to the ultimate electoral count than Ohio, Virginia, or Colorado.

Interestingly, spending increases were more modest (on a percentage basis) in Colorado and Florida. Given that Florida is such an expensive state, small percentage increases in Florida aren’t especially surprising. Colorado, however, seems like the type of state where the campaigns would have escalated spending. Polls show a close race, there are plenty of persuadable voters, and the state is cheap enough to allow for large spending increases on a percentage basis. If the Obama campaign believed they were behind in Colorado, they would presumably have increased their spending in Colorado by a larger amount. Relative stability in Colorado would require both campaigns to feel relatively confident in their position in the state, either due to a disagreement in each side’s view of the race, or in relative terms. If, for instance, the race was tight in Colorado but Romney trailed in other states worth 270 electoral votes, then Team Romney might feel compelled to concentrate their ad spending increases in the other states, even though they would be taking something of a risk in Colorado. 

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