It’s hard to ascertain whether or not we will begin to see a Presidential campaign this summer or a continuation of a new reality show called ‘Who Wants To Be America’s Next President? While we are sure to see mudslinging in television ads and scandals come out of the woodwork, the stark reality is that from a financial perspective these campaigns are moving to epic proportion. Even Donald Trump who is a billionaire simply cannot afford the price tag to run a campaign in today’s bulging budget to get to the White House. So, where does all of that money go?
- Advertising- While the apparent part of this are the countless number of hard hitting ads we are going to see, people forget just how much will be spent on digital advertising this year through mediums such as Facebook. In addition, there is a huge cost for banners, signs, t-shirts, bumper stickers, and buttons that will be spent during the campaign.
- Payroll- Payroll comes in two flavors. Staff that gets a w-2 for working and also 1099 political consultants that may be brought in even from state to state. Many of these people quit their jobs for a year or two to be involved in the groundswell of helping a candidate win the Presidency. Security is also a massive line item in payroll. Don’t forget that all the w-2’s also create a large amount of payroll tax.
- Travel- It costs over $5,000 an hour to fuel Trump force one, but travel costs for the candidate and their entourage can go through the roof. Remember, you have costs such as rent-a-car, rent-a-crowd (seriously), hotels, airfare, valet parking, and food. Parties for donors are also a part of this line item.
- Rent- While some of the candidates have friends in high places that will loan them some free rent in a building, once you really put people on the ground in 50 states, rent can cost a ton of money each month.
- Software- The Presidential campaigns not only have employee analysts, but they spend a fortune on voter registration software and also political software for analysis down to the county.
Trump had only raised 12 million up to this point, so it will be interesting to see how he starts raising 5 million dollars a day to get to the 1 billion number. With both of the democratic candidates having raised over $200,000,000, even those candidates have a long road to hoe to get to 1 billion.
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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.