US & Canada

US elections 2010: Where does Whitman's money go?

Meg Whitman at the NASCAR rally
Image caption Former eBay CEO Meg Whitman, who recently appeared at a Nascar rally, is running the most expensive non-presidential campaign in history

November's mid-term elections in the US are shaping up to be the most expensive congressional races in history. Candidates are raising and spending record amounts - so where does all that money go?

The politician on the most extreme spending spree this year is Republican Meg Whitman, the former eBay CEO who is running for governor of California.

She has set a record, running the most expensive non-presidential campaign in history. With a substantial personal fortune, she has ploughed $140m (£89m) of her own money into her campaign, vastly outspending her rivals in both the primary and the general election.

For comparison, the entire Australian federal election in August cost just $52m. In the UK, the maximum a political party can spend on a national election is $31m.

So what does $140m buy you?

For one thing, it doesn't necessarily guarantee you a key to the governor's mansion.

The latest polls show Ms Whitman trailing the Democratic candidate, Jerry Brown - a former California governor from a well-known political family - even though she has outspent him almost 10 times over.

The remaining weeks of the campaign will be an uphill battle for Ms Whitman. Although Californians have elected high profile Republican governors in the past - including Ronald Reagan and Arnold Schwarzenegger - the state is liberal-leaning, which helps give Mr Brown an edge.

With that in mind, Ms Whitman's campaign strategy is apparently to be ever-present on television and radio, and in the mailboxes of Californians.

Costly California

According to her campaign finance reports, by far the biggest chunk of her spending - almost $95m - has been on advertising, mostly television.

Like most campaigns, she's engaged advertising firms to work with campaign staff, pollsters and other paid consultants to develop concepts, write scripts, produce spots, advise on strategies to get ads seen by the target audience - and buy the television time to screen the ad.

Ms Whitman has paid one firm, a previously tiny outfit in Virginia called the Smart Media Group, more than $83m to produce and place her ads. Other firms have been paid to advise Ms Whitman on communicating with particular groups or on specific issues.

California, America's most populous state, has 13 separate media markets and for a candidate to reach across the entire state, he or she must purchase ad time in each one.

These markets are some of the most expensive in the country. Brad Adgate, senior vice president of media research company Horizon Media, says a 30-second spot during prime time in Los Angeles, reaching about 20% of the population, might cost $67,000.

That is significantly costlier than in smaller states. For example, according to Mr Adgate's research, in the small city of Bowling Green, Kentucky, airing the same ad would cost less than $1,000.

At this stage in the campaign, Ms Whitman is estimated to be running 1,300 television ads each day.

Micro-targeting

Across the US, spending on political ads is expected to reach $3.3bn this year. Mr Adgate says this has provided a much-needed "shot in the arm" for the television advertising industry.

The influx of political ads has been particularly valuable for local stations, who normally rely on local business - like car dealerships and retail stores, which have been particularly hard-hit by the recession - for their advertising dollars.

"There is a huge demand for local political ads right now. You cannot watch a local TV station and not see a political ad," Mr Adgate says.

Tom Edmonds, president of Edmonds Associates political consultants says radio can also be a particularly attractive medium for political campaigns.

It is significantly cheaper, averaging around $1,500-2,000 for a 60-second spot on a popular LA station. In a rural market in a poorer state, Mr Edmonds says ad time can be bought for $10.

Radio can also make it easier to target certain groups - older voters tend to listen to golden oldies stations, Latinos may listen to Spanish language stations, active Republicans may listen to conservative talk back radio and so on.

But to figure out which voters you need to target - which groups are receptive to your message, which ones not to bother with and what issues matter most to key groups - campaigns tend to hire additional consultants.

Spanish and Mandarin

Ms Whitman has spent around $1.5m on pollsters to conduct both telephone polling and focus groups.

These firms aren't paid to provide the sort of head-to-head comparisons of each candidate's appeal produced by firms like Gallup - campaigns can read about those in the newspaper.

Campaign pollsters tend to provide detailed information on how likely particular groups are to vote for the candidate, and what messages resonate most effectively.

That information is used to develop printed campaign material - on which Ms Whitman has spent more than $8m.

These days, high-profile campaigns like Ms Whitman's use sophisticated micro-targeting and printing techniques to categorise voters and send very specific mailings.

"Each piece of direct mail on your block could be different. Campaigns send specific information," says Mr Edmonds, adding they can even sometimes identify the nearest polling station to direct a voter to.

Ms Whitman has also paid an internet firm founded by former eBay colleagues more than $4m to manage her website and online communications.

She has spent enormous amounts ($5.7m) on adviser salaries and set up over 90 campaign offices around the state. She's also targeted particular ethnic groups with multilingual phone calls and ad spots in languages including Spanish, Mandarin, Farsi and Korean.

Campaigns like Ms Whitman's also hire consultants for a range of specific tasks - to book speaking engagements, throw fundraising events (different planners are usually employed for each major city a candidate raises money in) and even advise on wardrobe.

Ms Whitman has spent a staggering $11.7 m on such consultants - which is more that Senate Majority Leader Harry Reid has spent on his entire campaign so far.

Not only that but by June she had spent more on private planes ($675,000) than her Democratic rival Mr Brown had spent on his entire campaign.