Fundraising: McCain's $130 Million (and growing) Handicap

In the wake of a largely unpopular war and President, a stuttering economy, record high gas prices, and a depressed housing market, forget the "Year of the Rat," 2008 was supposed to be (and may yet prove to be) the "Year of the Democrats" back in the White House. Instead, though still early, the increasingly bitter battle between Barack Obama and Hillary Clinton is giving John McCain the cover to do what many once believed unthinkable: draw even or even out poll Obama and Clinton in national results.

While Obama and Clinton escalate their war of words, McCain is now caught in a major battle of his own: namely to raise enough campaign contributions to compete with his eventual Democratic rival all the way to November.

In the past few weeks, in large part due to his heavy television advertising in the state, Obama has erased much of what was recently an over 20 point deficit in the Pennsylvanian polls. Regardless of whether Obama wins or loses the Keystone State primary next week, he has proven one thing: if you massively outspend your rival, you can indeed move polling numbers.

Obama has so far raised nearly $130 million (yes million) more than McCain. And while only a fraction of both candidates’ hauls remain unspent, Obama’s appeal to supporters and innovative use of the web to raise both money and support immediately put him at a significant advantage in the general election.

The chart above compares each GOP candidate’s share of monthly FaceTime since the start of last year. FaceTime is Compete’s measure of web-wide candidate engagement based on the total amount of time voters spend with candidates across the leading social networks and video sharing websites. McCain secured the nomination over a month ago, but managed to earn only 34% of all GOP FaceTime in March (compare that to Clinton and Obama who combined for 99% of Democratic FaceTime last month).

The FaceTime trends suggest that McCain’s victory in the primaries was facilitated in large part by the failure of social conservatives to rally behind a single candidate. As a result, they split their vote and diluted their own power to nominate one of their own.

McCain’s troubles run deep and are directly related to who he is as well as who he isn’t. His struggle to raise campaign funds is due in large part to distrust and general malaise among social conservatives still smarting over the loss of would-be standard bearers Mitt Romney, Fred Thompson and Mike Huckabee. McCain now hopes to convince these same voters to rally behind him instead.

Further complicating McCain’s fundraising efforts is the continued popularity of Ron Paul. Paul’s legion of largely net-fueled libertarian supporters have proven themselves to be highly organized and adept at raising money. Online interest in McCain’s candidacy has been tepid at best, so an olive branch extended to this group (despite the ideological differences) could pay handsome dividends for McCain and help him counter Obama’s online advantage.

McCain is going to need all the help he can get as he goes to battle with either Democratic candidate. Choosing a strong running mate will help if he or she is able to curry favor with still hesitant Republicans and convince them to open their wallets in support of McCain.

About Matt Pace:
As VP of Millward Brown Digital’s financial services, retail and consumer products practices, Matt is responsible for vertical growth and strategy and the delivery of digital insights and best practice marketing consulting to leading Fortune 500 advertisers. Follow Matt on Twitter @mattpace.

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