Brett Gordon

Advertising Competition in Presidential Elections

Coauthor(s): Wesley Hartmann.

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Abstract:
Presidential candidates in the U.S. compete by strategically placing their advertisements across markets based on each state's potential to tip the election. The winner-take-all nature of the Electoral College concentrates most advertising in battleground states, thereby ignoring the majority of voters. We show that eliminating the Electoral College increases campaign reach, but unmasks several factors that still distort the geographic distribution of advertising. Using data from 2000 and 2004, we estimate an equilibrium model of advertising competition between presidential candidates. In a counterfactual with a direct vote, we find that all markets receive advertising, total expenditures rise by 25%, and turnout increases by two million voters. However, systematically higher advertising prices in left-leaning markets lead to 20% fewer exposures per voter compared to right-leaning markets. Equalizing advertising prices eliminates this distortion but reveals a funding asymmetry that tilts advertising the opposite direction: toward the left. Recomputing the equilibrium after equalizing the prices and candidates' financial support yields a nearly uniform distribution of advertising exposures. This suggests that the Electoral College, advertising prices and candidate financial support are the primary sources of geographic variation in advertising, despite extensive local variation in voters' political preferences.

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