Some thoughts on the initial fundraising numbers released by the Romney and Giuliani campaigns:
Romney’s $20.5 million was really $14 million plus a $6.5 million personal loan. All of that money was available for the primary. Romney’s burn rate has increased significantly from Q1, when it was about 50%. Over the last six months, Romney has taken in about $44 million, and spent $32 million, for a burn rate of about 73%. And keep in mind that the $44 million figure is inflated by Romney’s personal loans to the campaign — total actually raised is about $34.7 million. Not that he can’t afford to continue using his own cash (though he has said before that doing so would be a “nightmare”), but it shows just how hard he has been campaigning compared to the other candidates. Romney’s entire strategy has been predicated on gaining an early advantage in organization, name recognition, and polling in the first primary states. As the Politico’s Jonathan Martin reported:
Romney is alone among the GOP candidates in having purchased pricey TV time. He’s aired six separate ads and four alone this quarter.
It’s paying off, but is it sustainable? He raised $7 million less in Q2 than he had in Q1, though one thing that might help is his comparatively large donor base — he has had 80,000 individual contributors, more than anyone else in the Republican field.
The story is that Rudy Giuliani, having raised $17 million — of which $15 million is available for the primary — is the GOP “winner” in Q2. His numbers represent an improvement over his first quarter totals, and a clear edge over Romney (and of course McCain) in the last three months. In 2007 Giuliani has raised almost $32 million (including general election funds) and spent about $17 million. Factoring out the general election money, Rudy’s burn rate looks to be just north of 50%, but his donor base is not particularly large — only about 56,000 contributors.
What does this mean about the relative strength of the candidates? Certainly, at first glance, it looks good for Rudy. But let’s look at the numbers in the context of the candidates’ strategies. The latest ARG polls have Romney leading Giuliani by 7 points in Iowa, and leading John McCain by 6 points in New Hampshire. A new Rasmussen poll puts Romney ahead of a second-place Giuliani by 9 points in New Hampshire. These states are critical to Romney, especially given his lackluster numbers in national polls. Aron Goldman at Race 4 2008 suggests that, while these numbers are encouraging for Mitt, “it should be raising concern that, despite being the only candidate to have spend any money advertising in New Hampshire thus far, former NYC mayor Rudy Giuliani still has the highest net favorable in the state.” Still, according to the ARG results Giuliani is losing ground in those two states as well as South Carolina, while Fred Thompson — who by comparison has spent very little money (possible FEC law violations aside) — is gaining. Giuliani’s favorables and good fundraising numbers are assets, but so far there’s no evidence that they’re helping him in the early primary states.
When the full numbers come out, we’ll look at how much Giuliani is actually spending in those states. But Rudy’s strategy depends more on winning larger states like Ohio, Pennsylvania, and especially Florida. While he holds significant leads in each of those states, his poll numbers in each have been trending sharply downward — while Fred Thompson’s have been rising dramatically. This, again, despite the enormous difference in fundraising — and here, too, it would be good to see how much Rudy has spent in each state.
The larger picture: Mitt Romney is doing what he set out to do, holding onto leads in Iowa and New Hampshire — though, given his high burn rate compared to the other candidates’ lower levels of investment, one gets the impression that he’s kind of holding on by the skin of his teeth. Giuliani has a lead in the polls both nationally and in key large states, has taken the fundraising lead, and is doing it while burning less of his cash. Yet he’s losing ground to a candidate who has spent almost nothing. As with the debates, looking at these fundraising numbers and comparing them to the polls, you can’t help but think that the real winner is the man who wasn’t there — Fred Thompson.
Finally, compare Rudy’s totals to Obama’s and Clinton’s (also compare the number of donors). Giuliani should be the Republican superstar — he’s relying on his stardom to overcome the disadvantage of being a heretic on key conservative issues. Yet, while his favorables are high, he’s not raising money like a superstar. This may be an indication that those favorables don’t mean as much as we think — Republican voters and donors like him, but that might not necessarily mean they really want to elect him. Ultimately, the best chance for Rudy may be to play a middle game between his two main rivals — banking on having more star power than Romney the organization man, but better organization than Thompson the potential star. Or he may simply end up being squeezed between the two.
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