How to spend a billion: Obama will lavish on ads

* Campaign advertising boosts traditional media companies

* Money gives ability to craft, target message

By Patricia Zengerle

WASHINGTON, April 6 (Reuters) – How do you spend a billion
dollars?

U.S. President Barack Obama’s campaign will lay out a huge
amount of money to try to ensure he wins re-election in 2012,
with many estimating that he will raise a record $1 billion.
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But abandon romantic notions that the cash will go mostly
to connect with voters at breakfasts in Iowa cafes, open houses
in New Hampshire, or through innovative Internet communication
schemes.

The 2012 re-election team will run through its war chest
mostly by buying massive amounts of advertising on radio and
TV.

Obama’s team spent $427 million on media out of the
unprecedented $760 million it raised when he first won the
White House in 2008, according to the Center for Responsive
Politics’ OpenSecrets.org website.

This time analysts forecast hundreds of millions of dollars
in advertising spending again, boosting revenues of a range of
U.S. media companies, including major television and radio
networks.

And, although much was made of Obama’s successful use of
email and other social media when he won in 2008, the U.S.
election battle was still largely waged in traditional
outlets.

The 2008 campaign spent $244.4 million on broadcast
advertising; $133.2 million on miscellaneous media, mostly to a
messaging and consulting firm; $26.6 million on Internet media,
and $20.5 million on print, according to OpenSecrets.

“If you just annualize their last four months of TV and
radio spending (in 2008), they were the fourth largest
advertiser in America on those traditional media,” said Evan
Tracey, president of the Washington area Campaign Media
Analysis Group, which analyzes campaign spending.

Obama announced on Monday he will be a candidate for 2012,
getting a jump on Republicans, who are still in the early
stages of choosing a candidate. Most polls show the president
ahead of any Republican rival, although it is still very early.
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A WIDE REACH

A $1-billion war chest would allow Obama’s 2012 campaign to
advertise on television, radio and newspapers in almost any
market it wants to, rather than pick and choose the cities and
states in which it spends its money.

The campaign would be able to buy advertising targeting
specific groups, such as Hispanic or urban voters, and produce
and air its own messages, along the lines of the 30-minute
prime-time program starring Obama that aired days before the
Nov. 4 election in 2008.

The cost of that program was estimated at close to $1
million for each of its three major network slots, and
reflected the huge cash advantage Obama had as he defeated the
Republican presidential nominee, Senator John McCain.

“That kind of money, it basically gives them the ability to
use any and all channels,” Tracey said. “It’s the kind of money
that allows them to create basically their own content.”

After media, administrative costs consume the biggest piece
of campaign cash. Obama 2008 spent $60.8 million on travel,
$58.8 million on salaries and benefits and a whopping $16.8
million on postage and shipping, according to OpenSecrets.

Rent consumed $10.6 million, and food and meetings a
relatively paltry $437,144, the group said.

An umbrella grouping of campaign expenses totaled $73.7
million, including $32.0 million for campaign events, $28
million for polling and $110,000 for campaign direct mail.

Contributions to federal and non-federal parties, candidate
committees and other political groupings totaled $45.9 million
for Obama 2008, OpenSecrets said.
(Editing by Alistair Bell and Vicki Allen)

How to spend a billion: Obama will lavish on ads