Presidential campaigns aren't spending like they used to in N.H.
Presidential campaigns aren't spending like they used to in N.H.
The voting results won't be in until January, but so far this presidential primary has been a bust for businesses in New Hampshire.As of Sept. 30, the Republican candidates have spent a total of $4.6 million directly in New Hampshire -- about 36 percent of the amount spent by candidates in 2008. Yes, there were races in both parties that year, with 13 major primary candidates, but this year there are 10 major GOP candidates -- or eight, if you go by the deciders of debate participants. And that should mean at least more than half of the amount spent four years ago. Final spending figures won't be available until after the primary.In 2008, when all was said and done, candidates in both parties spent $21.1 million in the state. Republicans alone spent $12.1 million, but almost all of that is spent on consultants, fundraising and staff."It hasn't started out going as well as in the past," said Marie Ishac-Hanna, an owner of the Washington Street Café, one of the top primary caterers. "Even they are watching their budget.""Corporations don't haggle. These people do," said Tom O'Gorman, director of sales and marketing at The Exeter Inn, which got almost $10,000 as Jon Huntsman's campaign huddled for a week in preparation for, ironically, a speech in Iowa.Of course, things are supposed to start off slowly. Most of the spending in the primary comes about now, in the last quarter of the year. Besides, that money is mostly spent on big media buys, which according to 2000 study account for 85 percent of "direct expenditures" in the primary.But much of what the candidates spend on ad buys wouldn't be reflected in their New Hampshire expenditure reports anyway, since many of the spots appear on Boston TV stations, and even the ad spots seen on WMUR-TV are purchased through out-of-state consultants, which means those figures don't accurately reflect total media spending by the primary candidates.Nevertheless, during the first three quarters of the year, the primary is a ground game, and it is that spending that is reflected in candidates' filings.Indeed, if 2008 is any indication, half of that ground game money is spent before the World Series is under way. And -- to mix sports metaphors -- this year that ground game has been stalled on the 20-yard line.Why the drop-off?In the 2000 study of New Hampshire primary spending -- penned by Ross Gittell, an economist at the University of New Hampshire, and Brian Gottlob, an economist and president of PolEcon Research Inc. -- candidates spent about $12.6 million in the state. Add media expenditures, and the figure grew to $83 million. Add in induced expenditures and the multiplier effect, and throw in the dubious cash value that the state gets in tourism because of the image enhancement, and it all added up to $264 million in 2000.That expanded figure is about 0.6 of a percent of the state's gross state product, or "not much more than for the Laconia Motorcycle Race Week," according to Gottlob.Or to put it this way, direct spending by tourists in the summer of 2010 -- an off year, thanks to the recession -- was $1.66 billion. And that's without any multiplier or image enhancement effect."I hope maybe we dispelled the myth that the primary was some huge economic engine," Gottlob told NHBR about the decade-old report. "Its real value is that the primary shines a light on the state. That doesn't mean it doesn't mean a lot to certain businesses."Why the drop-off this year?Perhaps it is because several candidates have ceded the state to Mitt Romney, the former Massachusetts governor who has a summer home in Wolfeboro. Perhaps it was because some candidates -- i.e. Rick Perry -- skipped the first nine months of the campaign, and others decided that it would be better to be seen on a CNN debate than greeting people at the town dump or giving that stump speech amid the trees up north. And perhaps candidates are doing more talking to people through Facebook, rather than face-to-face. Whatever the reason, it is unlikely the $4.6 million spent so far will grow to be anywhere near the $21.1 million spent in 2008.For comparison purposes, the figures being used so far exclude the candidates' political action committee spending. The 2011 total of PAC spending thus far is $5 million.But a good chunk of that won't be going to your local Dunkin' Donuts. All but $200,000 of it has been gobbled up by fundraising, consultants and staffing. Indeed, one company alone -- SCM Associates, a direct mail marketing firm in Dublin -- got $3.6 million of the $5 million, all of it coming from Romney. The president of SCM Associates is Steve Meyers, winner of the American Association of Political Consultants' "Pollie Award." Meyers was the finance director for the Massachusetts Republican Party in 2004 to 2007, when Romney was governor, and he was Romney's direct response consultant for his failed 2008 presidential campaign. While SCM is located in New Hampshire, the money isn't primarily spent on the first-in-the-nation primary. While it's not clear how much of that money remained in New Hampshire itself (SCM referred questions to the Romney campaign, which could not answer questions about the spending), at least some of that money does.Similarly, another top-paid consultant group ($65,000) is Liberty Political Solutions, headed by Andrew Demers, who -- in his words -- "just happens to live in New Hampshire." Demers is Ron Paul's national voter contact director. Food and lodgingWhen it comes to hotels and the like, all of the campaigns spent a total of no more than $72,560 -- though it is possible that the $54,000 listed under as "travel" spending might have gone for hotels. The Romney campaign paid Wentworth by the Sea Hotel in New Castle some $15,000 back in September -- more than any other hotel received, but that's not a huge amount for the luxury resort, said marketing director Stephanie Seacord."We have a variety of events, so it's hard to say the primary is a major component of our business," Seacord said. The Exeter Inn actually reached out to the candidates to stay, said O'Gorman, but not because they expect it to fill the hotels. "It's an extra revenue source, but not big money," he said. "But it does get the inn to the forefront."Much of the business, he said, usually goes to Concord and Manchester, especially during the last months when the candidates "hunker down in the bigger cities."Restaurants supposedly get a boost in primary spending, but this year so far, candidates spent a scant $25,000 strictly on food and beverage (though another $29,000 in travel expenses might have been used for food and beverage).Whatever spending there has been apparently hasn't been noticeable. For instance, the Red Arrow Diner in Manchester wasn't even aware that the Huntsman campaign has spent $2,800 on meals and drink there."Wow, that's cool," said Carol Sheehan, owner of the landmark diner. "The only one we had met was (former Pennsylvania Sen. Rick) Santorum."Has she noticed any spending boost? "Nothing obvious. It stays pretty consistent throughout the year," she said.And what about all that coffee at Dunkin' Donuts, all those Big Macs? Well, the candidates either don't bother putting that on their expense reports, or they are eating a bit healthier than that. Domino's dominates the pizza buys -- $1,400 to feed the hungry troops, and D'Angelo trumps both McDonald's and Dunkin' Donuts.But none of the franchises got more than small change. Less than $250 has been spent at each chain by all of the campaigns throughout the state for nine months.Indeed, small change might be the best way to describe what the hallowed presidential primary means to small business."I wouldn't say it is big," said Ishac-Hanna of the $4,600 spent at the Washington Street Café. "But it's an addition, and the more, the merrier."But there has been more spending in years past, she remembered. But as she reminisced, it wasn't the cash that she seemed to miss."We served a lot of people going to the White House. Daddy Bush coming to the deli. Bill Clinton. We did Obama quite a few times. They came to us. It was word of mouth because of our service and our food."
This article appears in the December 2 2011 issue of New Hampshire Business Review