However, what you can't forecast are the impacts of unexpected events on elections. In 2006 there were many events that affected ad spending, but one in particular stands out to me as being the most significant. This was Connecticut Senator Joe Lieberman losing his party's primary to cable mogul Ned Lamont. Now we all know the story ends with Joe running as an independent and winning his seat, but what I believe happened when Joe Lieberman lost his own Democratic primary is that most members of congress took note. This event created "incumbent insecurity." If Lieberman could lose then no seat was safe. What followed in the rest of the summer and fall of 2006 was record House and Senate spending ($760 million). Many members of Congress, even those with historically safe seats, were not willing to take a chance that they would suffer the same fate as Lieberman and began to empty campaign coffers to spend heavily on ads reminding their constituents of their seniority and experience.
The most recent event that is likely to change our forecast for 2008 was the June 25 Supreme Court decision to lessen restrictions on the timing of issue ads. Basically, what the courts did was allow unions, corporations, interest groups and others to run ads during campaigns with only a few modest restrictions. This is significant because interest groups have been a major force in political campaign spending dating back to the early 1990s when labor unions and businesses squared off with ad wars directed towards House races. What followed was an escalation of ad spending by several unions, a handful of groups and the two political parties that lasted until 2003 when the McCain-Feingold law changed the rules and took away corporate and union "soft money" from the parties and triggered a proliferation of smaller groups called 527s funded largely by wealthy individuals. In 2004 there were 145 groups that spent a whopping $167 million followed up in 2006 by 131 groups spending $95 million.
What the Supreme Court has done is open the door for a lot of new ad spending. With fewer restrictions, groups are free now to play an even bigger role in 2008. An early indicator will come this winter as we near the early primaries in Iowa, New Hampshire, South Carolina and Florida. I fully anticipate that groups on the left and right will start to direct ad campaigns into these early primary states in an effort to make the campaigns use up resources defending themselves from being "swift boated." After the first round of primaries, these groups could then start to spend in a few of the key February 5th states or media markets, which no campaign will have the money to defend against.
The other place this ruling could have a considerable impact on the amount of ad spending is on 2008 US House and Senate races. Assume that, for the sake of argument, the Democratic nominee for President is running away in the polls next September, and based on the current map of Senate seats the prospects for Republican retaking the Senate are slim. Then what? Well, if this is the case look for groups on both the left and right to pour money into House races. Groups on the right will view the House as the only hope or "firewall" to prevent Democrats from controlling the White House and both houses of the Congress, while groups on the left will be equally motivated to hit the grand slam in 2008. This dynamic together with less legal restrictions might set off an arms race in ad spending to tip the closest House race to one party or the other, a perfect storm.
Putting the strategic value of these campaigns aside, the dollars could potentially be enough to generate several hundred million dollars of new ad spending into what already looks like a record setting campaign cycle. So pay close attention to events and understand that seemingly small events like a loss in a primary and big events like Supreme Court decisions could have significant impacts of how much or how little money will be spent in 2007 and 2008.
By the way, in the case of 2008, we think $2.5 billion will be the floor for TV ad spending. But what do we know -- our crystal ball is solar powered.
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Evan Tracey is the founder and chief operating officer of Campaign Media Analysis Group, a TNS Media Intelligence company. See his complete bio.