How to Make a Ton of Money in Politics
The Romney campaign says it's raised $10 million in the week since the announcement of U.S. Representative Paul Ryan as the GOP vice presidential nominee.
That's a good chunk of change, and it got me thinking: When campaigns spend money, who gets rich?
I spent a little time digging for more data on how much the campaigns have spent in total. Check out some of the amazing numbers so far this year:
- $6 billion: Amount the Center for Responsive Politics estimated this week will be spent, in total, on the 2012 U.S. presidential election. Another group estimated it could reach $9.8 billion.) If voter turnout is the same as in 2008, that would work out to about $75 per vote in the general election.
- $490 million: Total amount raised by Democrats in support of President Obama's campaign, as of the end of June.
- $497 million: Total amount raised by Republicans in support of Governor Romney's campaign in the same period, plus Super PAC spending. (Almost all Super PAC money was pro-Romney and against Obama, according to The New York Times.)
- $100 million: Amount that casino mogul Sheldon Adelson has pledged to spend from his personal fortune to defeat Obama.
- $61 million: Amount that Linda McMahon, the GOP nominee for Senate in Connecticut, has spent on her two campaigns so far: a 2010 losing effort against Democrat Richard Blumenthal, and her primary victory earlier this week, which allows her to face off against Democrat Chris Murphy. (Murphy and I are not related, by the way.)
So, where's all that money going? And where are the entrepreneurial opportunities in U.S. political campaigns?
Overall, political television advertising should reach $2.6 billion in 2012, a full 45% more than in 2008, according to a January report by Barclays Capital.
The average prime-time nationwide 30-second ad cost $110,000 last year, although the vast majority of campaign ads are targeted in swing states. About 85% of ad buys benefit local television stations.
Among the data I found, campaigns four years ago spent roughly a million dollars each on employee salaries in the first three months of 2008. There were a total of at least six serious candidates at the time, and the cost didn't include taxes and benefits, which probably doubled the amount.
Speaking of 2008, remember Samuel Joseph Wurzelbacher, also known as, "Joe the Plumber?" He's a Republican candidate for Congress now, and he was reported earlier this year to be paying himself a $5,000-a-month salary from campaign donations just for running.
Forget about it. In the first two months of this year, long before the general election, Obama, Romney, former U.S. Senator Rick Santorum, and other candidates had spent at least $23 million on political, media, and fundraising consultants.
Who are the beneficiaries of that largess exactly? Well, in some cases, according to the Capitol Hill newspaper Roll Call last year, it's the candidates' families. At least five members of Congress had their spouses as their highest-paid campaign employees or consultants last year.
This might be the first year in which campaign spending on digital media rivals spending on television advertising. Numbers aren't in yet, of course, but as of the first few months of the presidential campaigns had spent about $20.5 million.
Bottom line, there's tons of money to be made in American politics. There are millions upon millions of dollars more than what I've listed here, of course--spending on everything from direct mail and telemarketing to travel and food for campaign workers and volunteers. There's even a giant line item for, "other."
Like any other entrepreneurial opportunity, the key is to identify what problems candidates face, find better solutions than anyone else and--as always--execute.
BILL MURPHY JR. | Columnist
Bill Murphy Jr. is a journalist, ghostwriter, and entrepreneur. He is the author of Breakthrough Entrepreneurship (with Jon Burgstone) and is a former reporter for The Washington Post.