For the demonized industries, the sums spent on political attack
ads may be a blip compared to their own marketing budgets. But the
ads are aimed squarely at the politicians who, if elected, will
decide the companies' regulatory fates and the voters to whom those
politicians must answer. Most of the ads air around local news, not
exactly a favorable audience for big business. (If it's a
presidential year, some may even air during NBC's Summer Olympics
coverage, always the highest-rated pre-election programming with a
national reach.) Election cycle after cycle, the volume of such ads
is rising and the naming of names becoming more commonplace.
Add in the overall marked increase in ad spending in the 2012
elections, and the financial-services sector has a new risk to
evaluate -- its own continuing reputational and regulatory risk in
being the target of such advertising.
In 2002, it was Enron. Kantar Media's Campaign Media Analysis
Group (CMAG) captured north of $3 million in political and issue
ads critical of the energy company that cycle. Early in 2010, it
was Lehman Brothers--to the tune of almost $6 million in ads. In
both cases, by the time the ads aired, the companies were
shuttered. Then the 2010 target became the relatively healthy,
After the Deepwater Horizon oil rig exploded that April, the BP
sunflower bloomed in 2010 political advertising to a degree never
before seen for any company: $25 million spent to air 119 unique
spots, some in races as far from the Gulf as Boston and
In 2012, it's financial services' turn. More than one of every
10 political TV ad dollars spent between mid-April and
mid-September -- $91 million of $897 million -- went to ads
castigating the sector. That sum covers all advertising during the
first five months of the presidential general-election campaign and
any other political advertising during that stretch.
Congressional-race advertising typically doesn't ramp up until the
fall, so the negative ads are now proliferating beyond the
presidential swing states.
Within five months, Kantar Media tracked $65 million in
political TV ads excoriating the sector with references to
"bailouts," regulations and bonuses, corporate tax breaks, and
specific financial institutions by name or logo. The green Wall
Street sign is as ubiquitous in campaign spots as Starbucks is in
Manhattan. Even the "Charging Bull" statue gets a cameo.
On top of that $65 million, another $26 million in presidential
TV advertising focused on fewer than 10 swing states has demonized
Bain Capital and the business of private equity. Private equity's
challenge, of course, is being a little-understood service that
produced a hugely successful alumnus who says his private-equity
experience better equips him than the sitting president to manage
the economy. The moment Gov. Mitt Romney became the last man
standing in the GOP field, Bain and private equity were doomed to
the Democratic advertising woodshed.
Attention from America's C-suite
President Obama's own campaign has been the single-biggest
spender on ads critical of the financial-services sector, with a
little help from his friends. A spot jointly sponsored by Obama and
the Democratic National Committee, in which Obama asserts that
Romney would "roll back regulations on big banks," has the most
money behind it of any anti-Wall Street ad: $22 million and
counting. (In a newer ad, Obama charges that Romney would "roll
back regulations on the banks that cratered the economy.") Half of
that $22 million went to an NBC network buy during the Olympics,
ensuring national as well as swing-state exposure.
Obama's campaign and his supporting super PAC, Priorities USA
Action, also account for 99% of the $26 million spent on ads
slamming Bain Capital.
The top Republican sponsor of anti-financial-services ads is the
Republican National Committee, which spent $6.4 million on an ad
criticizing Obama's economic record. The ad shows an image of the
Wall Street sign (among others) against a voice-over: "What did we
get? National debt over $15 trillion and climbing." The
implication: that the bank and American International Group rescues
drove up the debt. The RNC is the only Republican presidential
advertiser to make the list of big anti-Wall Street spenders.
Overall, prime time has been the favorite daypart for
anti-financial-services advertising, followed by early morning
newscasts; for Senate ads, that order is flipped. And while the
presidential campaigns have focused on local news and the Olympics,
talk shows also have been a popular program type for anti-Wall
Street advertising in Senate and House races.
Those House and Senate "downballot" ads are a melee of
candidates, parties and outside groups all accusing their opponents
of supporting the Wall Street "bailout" or bonuses or of somehow
being in Wall Street 's pocket.
After Romney's selection of Rep. Paul Ryan as his running mate
revived the entitlement reform debate, Democrats also revived their
old charge that Republicans would entrust Social Security to Wall
Street by way of private accounts. Ads are airing well beyond the
presidential swing states in regions as far-flung as the West Coast
and New England, the Mountain West and Southwest.
Not surprisingly, Massachusetts' Democrat Elizabeth Warren, the
former Troubled Asset Relief Program overseer, has been the biggest
non-presidential anti-Wall Street advertiser ($2.9 million) from
mid-April to mid-September. Still, her opponent, Sen. Scott Brown
(R), also has broken into the top 10 ($1.25 million) with an ad
promoting his work to stop insider trading by members of
After Warren, Connecticut GOP Senate nominee Linda McMahon has
spent the most ($2.3 million) on ads that make the
financial-services sector a victim of drive-by attacks on
Democratic Rep. Chris Murphy's record in the House.
Most of the anti-financial-services sniping tracked by Kantar
Media during our five-month measurement period is generic. The
amounts spent on naming many familiar names are negligible: Bank of
America ($1.5 million in ads), JPMorgan Chase ($1.4 million), Citi
($1.6 million) and Goldman Sachs ($1.2 million) among the banks,
and AIG ($130,000), Fannie Mae and Freddie Mac ($500,000 each). A
Republican House candidate in Pennsylvania has been peppered with
ads accusing him of being "a millionaire attorney for a Wall Street
bank," BNY Mellon. Whether the advertisers are candidates or
groups, their need to raise money from executives of financial
firms has spared these firms from more explicit criticism. With
fundraising always the highest priority, generic ads are a safer
choice and still get the message across.
Lessons from BP
But then there's the $26 million spent on ads focused on Bain.
With seven weeks to go before Election Day, the previously
low-profile firm has already sustained more negative political
advertising than BP faced in 2010. The ads criticizing Romney's and
Bain's business practices bear striking similarity to some ads that
aired against BP: people talking about how their livelihoods were
destroyed. While other presidential ads may have been more widely
aired, the 2012 anti-Bain onslaught will represent a marked
spending increase from previous negative ads against a specific
In the past, demonized industries typically haven't fought back
against negative campaign advertising. Up until 2010, they
discounted it--political posturing, the cost of doing business,
chump change compared with their own ad spend. Nothing their
Washington lobbyists couldn't fix during some Capitol Hill meetings
and Georgetown dinner parties.
The BP oil spill changed that . To date, BP has aired $229
million in TV advertising responding directly to criticism and
concerns about the spill, almost 10 times as much as has aired
against it. Certainly, the company had a lot more than $25 million
in campaign and issue ads to overcome--such as the hit to its stock
price and its reputation inflicted by day after day of network news
coverage of that leaking well.
But much of the same could be said for the financial-services
sector in terms of relentless news coverage of its ups and downs.
True, the ad hits are mostly sector-wide, not brand-specific, and
some of the named firms may be privately held and less vulnerable
to public opinion.
But even if the public doesn't catch all the ads, politicians
are certainly keeping track, and financial-services companies all
have to answer to Washington somehow. Overall, financial-services
firms aren't just confronting $91 million -- and rising -- in
negative ad spending. The financial field is confronting the
aggregated damage to reputations and politicians' concern about
potentially giving opponents new ammunition if they act in the
industry's favor. Using BP's response as a guide, the financial
services sector is looking at nearly $1 billion in advertising to
assuage the public -- and that 's a dollar amount that does hit
Update: From mid-September to now, CMAG has
captured more than 80 new, unique advertisements in U.S. Senate,
House, statewide and local races across the country that contain
critical mentions of the financial services sector overall or of
specific brands -- a significant number that is further
intensifying the impact on the sector.