In the most expensive presidential contest in the nation's history, John Kerry and his Democratic supporters nearly matched President Bush and the Republicans, who outspent them...

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WASHINGTON — In the most expensive presidential contest in the nation’s history, John Kerry and his Democratic supporters nearly matched President Bush and the Republicans, who outspent them by only $60 million, $1.14 billion to $1.08 billion.

But despite their fund-raising success, Democrats simply did not spend their money as effectively as Bush. That is the conclusion of an extensive examination of campaign fund-raising and spending data provided by the Federal Election Commission, the Internal Revenue Service and interviews with officials of the two campaigns and the independent groups allied with them.

In a $2.2 billion election, two relatively small expenditures by Bush and his allies stand out for their impact: the $546,000 ad buy by Swift Boat Veterans for Truth and the Bush campaign’s $3.25 million contract with the firm TargetPoint Consulting.

The first portrayed Kerry in unrelentingly negative terms, permanently damaging him, while the second produced dramatic innovations in direct-mail and voter technology, enabling Bush to identify and target potential voters with pinpoint precision.

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Those tactical successes were part of the overall advantage the Bush campaign maintained over Kerry in terms of planning, decision-making and strategy. The Kerry campaign, in addition to being out-spent at key times, was out-organized and out-thought, as Democratic professionals grudgingly admit.

“They were smart. They came into our neighborhoods. They came into Democratic areas with very specific targeted messages to take Democratic voters away from us,” Democratic National Committee (DNC) Chairman Terry McAuliffe said. “They were much more sophisticated in their message delivery.”

GOP wins turnout battle

The ultimate test of the two campaigns is in the success of their efforts to increase turnout from 2000. Kerry and his allies increased the Democrat’s vote by about 6.8 million votes; Bush increased his by nearly 10.5 million.

In the critical state of Ohio, Bush countered Kerry’s gains in the metropolitan counties by boosting his margin in other counties from 57 percent to 60 percent, eking out a 118,457-vote victory.

A supposed strategic advantage for the Democrats — massive support from well-endowed independent groups — turned out to have an inherent flaw: The groups’ legally required independence left them with a message out of harmony with the Kerry campaign.

A large part of Bush’s advantage derived from being an incumbent who did not face a party challenger. He also benefited from the experience and continuity of a campaign hierarchy, based on a corporate model, that essentially had stayed intact since Bush’s 1998 race for Texas governor.

When Bush took office in 2001, planning for his re-election campaign began almost immediately. Under the direction of Karl Rove, Bush’s top White House adviser who served as a kind of chairman of the board, White House political director Ken Mehlman as chief executive, pollster Matthew Dowd as chief operating officer and Mark McKinnon as principal media consultant, the Bush political team developed a strategy for 2004, began investing in innovative techniques to target voters and planned an early and cost-effective advertising plan.

During this period, the Republican National Committee (RNC), where much of the planning was based, outspent its Democratic counterpart by $122 million.

In 2001, Dowd said, “we made some of the basic strategic assumptions about what we thought the election would look like.”

One fundamental calculation was that 93 percent of the voting-age public already was committed or predisposed toward the Democratic or Republican candidate, leaving 7 percent in the undecided category.

The second calculation was that throughout the Bush presidency, “most voters looked at Bush in very black and white terms. They either loved and respected him or they didn’t like him,” Dowd said. Those voters were unlikely to change their views before Election Day.

That prompted Republicans to jettison their practice of investing 75 percent to 90 percent of campaign money on undecided voters. Instead, half the money went into motivating and mobilizing people who were already inclined to vote for Bush, but who were either unregistered or who often failed to vote in past elections — “soft” Republicans.

Republican officials said they put $50 million into drives to register and turn out millions of new voters in 2001 and 2002, and an additional $125 million after that.

No message control

Meanwhile, Kerry, faced with a difficult primary campaign and infighting and turnover among his consultants, did not begin to address the general election seriously until after his Super Tuesday victory in March, eight months before the election.

By that time, the campaign was hamstrung by legal restrictions on any cooperation between the campaign and the independent 527 organizations running ads and mobilizing voters on Kerry’s behalf.

The 527 groups, named after a section of the tax code and allowed by law to accept unlimited contributions, provided invaluable help in registering and turning out voters. America Coming Together put about $135 million into what became the largest get-out-the-vote program in the nation’s history.

But the 527s, fueled with money from billionaires such as George Soros, proved ineffective in helping Kerry deliver a consistent, timely message in his advertising.

Of all the money spent on television advertising for the Democratic nominee, Kerry’s campaign controlled 62 percent, according to an analysis of spending totals. The rest was spent on ads whose content or placement could not be coordinated with the campaign.

The Bush campaign controlled 83 percent of the money spent on its behalf, giving it far more control over when and how it advertised.

At two junctures, when Kerry was either out of money or under pressure to conserve resources for the close of the election, the absence of an overall strategy had damaging consequences:

• In March, just when the Bush campaign began its first anti-Kerry offensive.

• In August, when the Swift Boat Veterans for Truth commercials raised questions about Kerry’s service in Vietnam.

The Democratic media 527s “didn’t do what we wanted done,” Kerry media adviser Tad Devine said. “We would have run ads about Kerry, we would have had answers to the attacks in kind, saying they were false, disproved by newspapers.”

Harold Ickes, who ran the Media Fund, a 527 that raised about $59 million in support of Kerry, said the federal election law prohibiting communication with the Kerry campaign created insurmountable obstacles in crafting effective, accurate responses to anti-Kerry ads.

Ickes said he regretted not responding to the Swift Boat group’s attacks but at the time he thought they seemed “a matter so personal to Sen. Kerry, so much within his knowledge. Who knew what the facts were?”

Broadening its aim

Under Dowd’s direction, the RNC began investing in extensive voter research. One of the most striking findings, according to Republican consultants, was the ineffectiveness of traditional phone banks and direct mail that targeted voters in overwhelmingly Republican precincts.

The problem: Only 15 percent of all GOP voters lived in precincts that voted Republican by 65 percent or more. Worse, an even smaller percentage of “soft” Republicans, the 2004 target constituency, lived in such precincts.

The RNC decided to cast a wider net for voters. But to work, Dowd’s motivation and mobilization strategy needed expensive, high-tech micro targeting to cherry-pick prospective Republicans who lived in majority Democratic neighborhoods.

Republican firms, including TargetPoint Consultants and National Media, delved into commercial databases that pinpointed consumer-buying patterns and television-watching habits to unearth such information as:

• Coors beer and bourbon drinkers skew Republican, brandy and cognac drinkers tilt Democratic.

• College football TV viewers are more Republican than those who watch professional football.

• Viewers of Fox News were overwhelmingly committed to vote for Bush.

• Homes with telephone caller ID tend to be Republican.

• People interested in gambling, fashion and theater tend to be Democratic.

Surveys of people on these consumer-data lists were used to determine “anger points” (late-term abortion, trial-lawyer fees, estate taxes) that coincided with the Bush agenda for as many as 32 categories of voters, each identifiable by income, magazine subscriptions, favorite television shows and other “flags.”

Merging this data, in turn, enabled those running direct-mail, precinct-walking and phone-bank programs to target each voter with a tailored message.

“You used to get a tape-recorded voice of Ronald Reagan telling you how important it was to vote,” said Alex Gage of TargetPoint. “You didn’t get a call saying that if you don’t come out and vote, the number of abortions next year is going to go up, something that is a sharp, motivating message.”

Dowd estimated that, in part through the work of TargetPoint and other research, the Bush campaign and the RNC were able to “quadruple the number” of Republican voters who could be targeted through direct mail, phone banks and door knocking.

Democrats had access to similar data files. But the Bush campaign and the RNC were able to make far better use of the data because they had the time and money to conduct repeated field tests in the 2002 and 2003 elections, to finance advanced research on meshing databases with polling data, and to clean up and revise databases that almost invariably contain errors and omissions.

The GOP ad assault

Two days after Super Tuesday, the Bush campaign, anticipating that Kerry would have no money to respond, began a $40 million, six-week televised assault designed to crush the Democratic nominee before he could get off the ground.

“We had a financial advantage over them for four to six weeks. That’s why we did what we did,” Dowd said.

With a $177 million ad budget, the Bush campaign and its allies ran more than 101,000 anti-Kerry “attack” or negative ads, more than the combined total of “positive” and “contrast” ads, according to the University of Wisconsin Advertising Project, based on data from Nielsen Monitor-Plus.

Fewer than 5 percent of Kerry’s ads were “attack” or negative, according to the Wisconsin advertising project, and the remaining 95 percent were either positive or contrast ads.

During March and April, Kerry strategists were convinced he needed a barrage of positive biographical ads describing him in a sympathetic light to counter the negative picture drawn by the Bush ads. But when the Democratic 527s began their ad campaign, they aired negative ads reflecting their intensely anti-Bush donor base.

By the time, two months later, when Kerry had raised enough money to begin his positive-ad campaign, the Bush negative ads had helped convert Kerry’s positive-to-negative poll ratings in closely contested states from 40 percent to 24 percent at the beginning of March to 35 percent to 36 percent at the start of May, according to the National Annenberg Election Surveys.

The negative Bush barrage was followed in August by the Swift Boat Veterans ads, the first one airing on four cable channels at a cost of $546,000.

The Swift Boat Veterans eventually would raise and spend $28 million, but the first ad was exceptionally cost-effective: Most voters learned about it through free coverage in the mainstream media and talk radio.

An additional Republican television commercial that significantly affected the race, according to surveys, was a positive spot financed by a second GOP 527 group, Progress For America. It invested $17 million in “Ashley’s Story,” which featured Ashley Faulkner, 11, whose mother had been killed in the attack on the World Trade Center, describing her meeting with Bush.

Overall, Kerry, the DNC and the Democratic 527s spent $344 million on ads, while Bush and the GOP counterparts spent about $289 million, much of which was spent in the final three months. Arguably, Republicans got more bang for their buck.

In an election won by 2.6 percent, the Bush campaign was run to ensure that every dollar went to fulfill core strategies, that resources were allocated to capitalize on Bush’s strengths and on Kerry’s vulnerabilities, and that the money necessary to finance research, technological advance, television and the ground war was available when needed.

At the July Democratic convention in Boston, McAuliffe commented on the disciplined Republican team: “We are up against the dirtiest, meanest, toughest group of people we have ever faced. They have money, they have power, and they ain’t going to give it up easily.”

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