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More Accurate than Polls to Gauge Election Outcomes
Many television pundits track polls to gauge which candidates are the front-runners in their race. However, as seen during the last Presidential election, the most commonly viewed polls are unreliable. This should not come as a surprise, if you think about it, in the months leading up to an election the pundits are using information that asks, “Who would win today?” Which is all polls accomplish. The answer they seek is, “Who would you vote for before being influenced by advertising?” Advertising matters and the level of a campaign’s cash has highly predictive outcomes.
So, what do we know from past elections? How will this Presidential election play out? Will the House remain Democratic? Will the Senate remain Republican? Has the Trump train be derailed? For higher predictive accuracy than polls, the first step in addressing these questions is determine who is ahead in fundraising.
President Trump has a current total lead in cash on hand with $287 million versus Joe Biden’s campaign at $215 million. Here’s why these numbers are important. Historically, the candidate with the most cash to spend on advertising comes out on top. Depending upon whether it is a House, Senate, or Presidential race, the candidate with the largest war chest wins between 83% and 97% of the time. While current polling data suggests that Biden would win if the election were held today, this is not forward looking. Future spending on advertising will dramatically increase for all candidates as we approach election day. It’s likely that the results from the polls will be altered in the upcoming weeks as candidates spend on advertising.
Critics of following the money may point to the anomaly with the 2016 contest between Hillary Clinton and Donald Trump. Clinton was a fundraising machine while Trump was late to the fundraising effort, leaving him bested by Clinton. So, how did he beat the probabilities? In short, the media. Trump may have been outmatched in funding by the Clinton campaign, however he received an unprecedented high rate of “free advertising” due to his constant news coverage. Media viewers are attracted to controversy, which Trump consistently offered. This resulted in media companies featuring him far more than his opposition so they would reap the benefits increased audience numbers. The spending on advertising on Presidential elections has increased 17% per year since 2000. Clinton mis-stepped not in lack of money spent, but by not spending in the advertising markets she thought she would carry. This allowed the eventual victor to win on the grassroots level by hosting rallies that drew media attention. Ultimately, it was the rallies magnified by the media that carried Trump to the White House.
Recently, former Vice President Biden has been narrowing the fundraising gap. Although the President remains on top with cash available, the $287 million cash pile has been acquired over the past three years; of that only $97 million was raised this past year. Biden has raised all his $215 million in this past year alone. Biden closing in on Trump’s cash war chest could be a troubling sign for the President. For this reason, it is not surprising that Trump has gone back to the playbook from 2016 and stepped up the attention grabbing rallies. Biden’s demeanor is less attention grabbing, for this reason it’s not surprising that he is running a virtual campaign. This lower media attention, both from a smaller war chest and less interested media, places the probability of a Trump over Biden victory very high. The on-air minutes that will impact voters most, even if they don’t know it yet.
What about the House and Senate races? Following the money in Congress has even higher predictive ability. Currently, Democrats have raised $346 million versus the Republican’s $248 million for reelection races. This is important since 35 of the 100 seats are up for election in the Senate race. In the House of Representatives Republicans have raised $178 million outfunding the $74 million raised by the Democrats. For these reasons, we believe that the Democrats will maintain majority of the House, and likewise with Republicans in the Senate.
Election season, both local and national can increase advertising profits for media companies. Money and media time have a much higher predictive ability than polls. Polls tell you what people are thinking when they are taken. Money to be spent before election day and media exposure determines who the contest will go to on election day.
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