Political campaigning is a multi-billion dollarindustry. We may hope that campaigns serve to enablecandidates to communicate directly with voters, but inpractice they involve big business for professionalconsulting firms. These firms increasingly direct manyaspects of campaigns. Their behavior as an industrylikely affects the kinds of campaigns that voters see.Yet scholars have largely ignored campaigns as abusiness activity.

How do consulting firms compete for business? Whatis the structure of the industry? How might theireconomic competition affect American politicalcompetition? There are likely to be consequentialdifferences, after all, across parties and over time inthe operation of the campaign industry. Competitionamong consulting firms and evolving industry businessmodels, though they are designed to generate income forconsultants rather than to win elections, may affectthe campaigns presented to voters.

As the most prominent recent example, take thebrains behind the candidates in the 2008 Democraticnomination battle. Hillary Clinton’s principalconsultant, Mark Penn, was known primarily as apollster obsessed with microtargeting (see Penn andZalesne 2007). He took home multi-million dollar lumpsum payments at a time the campaign was behind infundraising (see Langley and Chozick 2008).Commentators bemoaned his inability to see themacrotrend of the 2008 election: the success of BarackObama’s theme of change. Penn fought with Clinton’sother consultant, Mandy Grunwald, in a public spat overwhether the message or the advertising was responsiblefor Clinton’s worse-than-expected performance (seeLangley and Chozick 2008). Grunwald wanted more moneyfor delivering her advertising, believing that paying

Penn had only resulted in too many inconsistentmessages. Penn was later demoted. Obama’s principalconsultant, David Axelrod, was an advertisingspecialist who had run previous campaigns for Aftican-American candidates that draw white support. In the2008 race, he recycled previously used themes, such as‘Yes, We Can.’ This was the background in which Obamawas accused of plagiarism for reusing words from aprevious Axelrod client (see Zeleny 2008).

These anecdotes make it clear that the choice ofconsultants helps set the tone for campaigns. Therelative experience of principal consultants in eachbusiness area, the financial incentives associated withdifferent payment plans, the working relationshipsamong consultants, and the connections between past andcurrent work can all have important effects on thecampaigns we watch. In most American elections,however, candidates do not have the luxury of choosingamong the best individual consultants. They hireprofessional firms and vendors in a crowded market. Weknow that the eccentricities of each consultant and theunique business relationships involved in eachtransaction between consultants and candidates can haveimportant effects. Yet we have no systematic evidenceabout how the business of politics works today.

This study provides the first broad view of howthe industry works, how it is changing, and how thebusiness practices of consultants in each partycompare. Using two original surveys of consulting firmsthat serve candidates for Congress, I report howconsultants make money and how they compete with oneanother. Using network analysis of consultantrelationships, I reveal how the industry is structuredand how consultants cooperate. The analysis isdescriptive but it offers insights into incentives that

may promote distinct campaign decisions. Though weassume that candidate incentives are central tocampaign decisions, consultant business incentives maybe just as important. Business competition in thecampaign industry creates the framework for politicalcompetition between candidates.

The Consulting Industry and American Campaigns: What WeKnow

Most political science research on politicalconsultants uses interviews and wide-scale surveys.There is a long history of research that tracks therise of consultants and their increasing importance(see Sabato 1981). In an edited volume of contemporaryresearch on the topic by Thurber and Nelson (2000), welearn that consultants have divided campaign tasks intomany categories, each with their own strategicconsiderations. According to each set of consultants,general strategists, pollsters, advertising creatorsand buyers, direct mail firms, and get-out-the-vote(GOTV) specialists, their activities and decisions arepotentially important in determining candidate success.Dulio (2004) argues that in each category, someconsultants are seen as the most influential andcandidates with better consultants are seen as morecompetitive. Using international surveys ofconsultants, Plasser and Plasser (2002) argue that manyof the same techniques are evident in campaignsthroughout the world. American consultants focus on aunique type of message and organizing, they claim, butmany of their tactics are exported to other campaigns.

Shea and Burton (2001) attempt to bridge the gapbetween academic theories and consultant practices.They describe what they consider consultant-centered

campaigns and outline the new actors, incentives,tactics, and resources available to practitioners. Theyreview how consultants help candidates create acampaign plan, research a district and race, usedemographics and polling, produce advertising, generatefree media exposure, and engage in opposition research,targeting, precinct analysis, fundraising, votercontact and GOTV. They seek to incorporate the insightsof practitioners but primarily report the conventionalwisdom of consultants.

Some research takes it a step further, assessingwhether consultant attitudes affect candidate behavior.Francia and Herrnson (2007), for example, argue thathiring consultants encourages candidates to take onsome of their attitudes. Candidates with consultantsare more likely to believe that negative campaigning isacceptable and that raising some kinds of issues ismore acceptable. Yet not all industry research confirmsthat consultant strategy affects candidates. Ratherthan credit consultants with innovative strategicdecisions, some evidence suggests that candidates oftenhave little room to maneuver. When contextual featuresof a race are taken into account, independentconsultant decisions no longer seem very influential.Howell (1982), for example, argues that statelegislative election outcomes are produced bysituational factors such as incumbency, candidatequality, and financial support rather than a campaign’sdecisions, such as their relative focus on turnout,persuasion, endorsements, and fundraising. Sellers(1998) similarly argues that Congressional candidatesdetermine their strategies based on obvious backgroundfeatures such as incumbency and district partisanship;consultants may not have much to add to these basicstrategic calculations.

Whether or not campaign decisions are rationalstrategies that anyone would implement, scholars havebeen able to predict candidate behavior based on acombination of obvious strategic imperatives andinternal campaign organization. Bartels (1985), forexample, finds that campaigns allocate organizationaland staff funds in order to satisfy internalconstituencies but allocate advertising and candidateappearances strategically to win votes. Yet muchimportant candidate behavior is not predictable basedon the incentives that scholars have identified. Sides(2006), for example, shows that neither ‘partyownership’ nor a candidate’s previous record in officehave much predictive power for determining the issueagenda of a candidate’s advertising campaign. Publicsalience and some district demographic factors areimportant but there is lots of unexplained variation incandidate issue agendas. This variation in campaignbehavior may turn out to be driven by consultantdecisions, either because consultant opinions differacross campaigns or because consultant interestssometimes diverge from candidate interests.

What impact do consultant decisions have onelections? Medvic (2001) originally found that hiringcampaign consultants helps Congressional candidates winelections. Even with controls for competitiveness andparty affiliation and after accounting for thepotential for reverse causality, the consultant effectremains. Herrnson (1992) similarly found that campaignprofessionalism (having more consultants) increases acandidate’s fundraising success. Yet this researchagenda was formed at a time when some candidates forhigh office had consultants and others lacked them; itno longer adds much knowledge in an era when all majorcandidates have consultants. We know that having

consultants at one point made a difference in electionoutcomes but there is no longer enough variation intheir use to determine what effect they have today. Wenow need to think about how the near universal use ofconsultants affects campaigns as a whole.

Competition and Incentives in the Campaign Industry

Even though campaigning is an industry, driven at leastin part by commercial incentives and bottom-linecompetitive pressures, scholars know little about howbusiness practices might affect political campaigns. Itmay be important to know how competition is structuredor how the industry is changing. It may even matter howthe deals are structured, which consultants worktogether, and which firms commonly compete for clients.

Four examples motivate this descriptiveinvestigation. In each case, campaign behavior maydepend on how consulting firms operate as businesses.The first and most acknowledged case is based on howconsultants are compensated. If consultants are paid byflat fee, they have little incentive to make anyparticular decision. If they are paid by victory bonusor fees contingent on winning, they presumably haveincentives to act in the candidate’s electoralinterest. If, however, they are paid more when thecampaign spends more, they may have an incentive todirect funds toward high-cost expenditures such astelevision advertising; if these funds are dependent oncontributions, they may also favor increased candidateattention to fundraising. These are common consultantrecommendations (see Ganz 1994). If payment byexpenditure were indeed a dominant type ofcompensation, it would lend some plausibility to thepossibility that incentives matter.

Second, the peculiar calendar of the politicalconsulting industry may encourage changes in ourpolitical discourse. Consulting firms need to generateincome every year but federal campaigns areconcentrated every two years. If major consultants movebeyond electoral campaigns, beyond American borders, orinto localities in these off years, we may see anextension of the kinds of techniques we see in U.S.national political campaigns. Are consultants workingon legislative campaigns, blurring the boundary betweencampaigning and governing? Are they extending theirreach abroad? Given concerns about the ‘permanent’campaign (see Blumenthal 1980) and the‘Americanization’ of campaigns (see Plasser and Plasser2002), consultant incentives should be assessed as apotential factor in both trends. If consultants areinstead attempting to work on federal campaigns everyyear, we might suspect the campaign season to continueto grow longer. These possibilities can be assessedwith a single question: where are consultantsgenerating revenue in off-cycle years?

Third, the organization of the consulting industryis odd compared to other sets of economic competitors.They are mostly divided by partisan orientation, withDemocratic firms rarely in economic competition withRepublican firms despite their regular politicalopposition. This kind of structure allows economicinefficiencies; for example, one side might featuremore competition or less favorable terms for candidatesbut firms would be unlikely to succeed in jumping thefence to compete on the other side. In addition, manyfirms seem to offer both competitive and complementaryservices, often acting as vendors for other firms thatprovide similar services. If the type of competition orthe distribution of service offerings differs across

parties, different candidates may have access toalternate organizational models of politicalcampaigning.

Also out of the ordinary in most industries, manyconsulting competitors regularly cooperate with oneanother. In the anecdote from the consultants fightingit out in Hillary Clinton’s 2008 campaign, it was clearthat the cooperation is not always smooth. Ifconsulting firms select regular partners, it may signala more stable pattern of relationships. If everyoneworks with everyone else, it may operate more like afree-for-all determined each election cycle.Alternatively, a few major firms may form the core ofeach party’s network, with everyone else fighting topartner with them. In any case, the structure ofcooperation in the industry might tell us somethingabout what to expect from campaigns that often involvemultiple firms.

In all four of these cases, characteristics of thepolitical consulting industry, as a business, likelyaffect the incentives of consulting firms. It does notseem like much of a leap to predict that an industry’spractices and incentives affect its products, in thiscase the political campaigns that voters experience. Wecan thus far only speculate about how much businessincentives drive political behavior. Given what wealready know, however, it is well worth investigatingwhat those incentives are, how they are changing, andhow they operate in each party.

Popular Critiques of the Campaign Industry

Attention to the role of consulting business incentivesin driving campaign decision-making is limited inacademic scholarship but not in popular discourse. From

cable news pundits to popular bloggers, many criticsbemoan the influence of consultants on our politics(see Ganz 1994; Dickinson 2007). These critics seeconsultants as making poor decisions for theircandidates with a devastating impact on democraticdebate and voter participation. Their critiques aremore focused on the economic factors that influencecampaigns rather than related academic research but areless apt to include systematic research on consultantdecisions. They rely instead on insider accounts ofparticular campaigns.

Two examples stand out in this genre: Joe Klein’sPolitics Lost (2006) and Jerome Armstrong’s and MarkosMoulitsas Zuniga’s Crashing the Gate (2006). Klein arguesthat consultants have ruined politics by prioritizingtheir own aggrandizement. He also criticizes manyspecific consultant decisions, arguing, for example,that Al Gore lost the 2000 election partly as a resultof poor consulting. He is attentive to several featuresof the industry that affect campaigns, especially turfbattles among consultants. He cites several examples ofintra-campaign consultant conflict in the 2000 and 2004presidential elections. He also points to partydifferences, arguing that the Republican side has aclear pecking order among consultants and morecentralized distribution of consulting roles by theparty. In addition, Klein argues that campaigns focuson television advertising because of monetaryincentives built into the consulting industry.

Armstrong and Zuniga (2006), two of the mostpopular Democratic bloggers, argue that the DemocraticParty is more centralized in its allocation ofconsultants, forcing candidates to accept mediocreconsultants. They believe that the compensation modelsused by consultants promote irresponsible behavior,

arguing that the models used by Democratic consultantsare worse than those used by Republicans. Theircritique of the Democratic Party presumes thatconsultants in each party operate differently; yet theyconduct no systematic comparison. Are the differencesbetween Republicans and Democrats identified by Kleinas well as Armstrong and Zuniga reflective of the wholeindustry or just a select group of consultants thathave worked on the past few Presidential races? Whichcritique of the differences between parties is correct,Klein’s contention that the Republicans have clearerpatterns of cooperation or Armstrong’s and Zuniga’scontention that the Democrats centralize theirconsultant allocation? How widely practiced are thebusiness models that popular commentators identify anddisdain? Are there other incentives created by theindustry that may affect campaigns, whether or not theyare worthy of criticism? Because scholarship has laggedbehind popular commentary in addressing the consultingindustry, we lack answers to these questions. As astarting point, it is important to investigate howwidespread each set of consulting business models havebecome, how the competitive pressures differ over timeand across parties, and what the cooperation patternsamong consultants can reveal. Data and Method

The descriptive analysis pursued here uses threetechniques to begin the investigation of politicalconsulting as an industry. First, I review the businesspractices that they report, with an eye toward commonbehaviors and differences in practices across parties.Second, I look for changes in opinions and practices byinvestigating how reports change over time. I also look

for signals of future changes from differences inconsultant practices across cohorts; a newer generationof consultants may be beginning to distinguish itself.Third, I look at working relationships amongconsultants: which firms work with which other firms onthe same campaigns? I look for patterns of cooperationand compare across parties.

Much of the analysis is based on survey research.Following the 2002 and 2006 election cycles, in Marchof 2003 and March of 2007, I sent questionnaires to theprincipal consultants of firms involved in at least twomajor campaigns.1 In each of the two populations, Iincluded firms that served as general strategy or mediaconsultants for at least two House, Senate, orGubernatorial races. I sent questionnaires to allconsultants who fit these criteria using populationlists from The Hotline and Campaigns & Electionsmagazine. Identifying campaign consultants from thesesources is standard practice for studies of consultants(see Medvic 2003). Requiring work on two campaigns forinclusion in the population also limits the populationto those that are professional consultants, rather thanextended campaign staff (see Medvic 2003). Yet someprevious survey-based analyses of the consultingindustry by Dulio (2004), Thurber and Nelson (2000),and Plasser and Plasser (2002) use a larger set ofpotential respondents. This practice provides a largersample size but dilutes the pool with opinions fromconsultants that do not have a major role in Americannational campaigns. It also sometimes includes thosethat operate as vendors, performing a few services butnot acting as general consultants making key decisionsfor candidates. The surveys used here sacrifice samplesize in order to focus only on key consultants,especially those operating in federal races.

In 2003, 148 consultants met the criteria and 58responded to the survey, for a response rate of 39%.2

In 2007, only 90 consultants met the criteria and 27responded to the survey, for a response rate of 30%.The decline in consultants meeting the criteria likelyindicates some consolidation in the industry, at leastat the top level: fewer consultants now advise multipleimportant clients. The second survey included many ofthe same items but also several new items. Threeconsultants responded to the survey in both 2003 and2007; when I combine data from both surveys, I use themost recent response from each respondent. Thedemographics in the sample analyzed here are largelyconsistent with previous samples of U.S. consultants(e.g. Dulio 2004 and Thurber and Nelson 2000), eventhough I included only consultants who are in aposition to implement their views in important races.

The second method used in the research is networkanalysis. Using the same lists of consultant sign-upspublished in The Hotline and Campaigns & Electionsmagazine for the 2002 cycle, I construct affiliationnetworks with two-mode network data for each party.3

The nodes of the affiliation networks are consultingfirms. The number of campaigns that each pair worked ontogether measures the strength of their ties. Thoughthe links do not imply regular communication betweenfirms, they do indicate that a candidate hired bothfirms for the same race. Network analysis is also usedas a descriptive technique in this research, though itallows for an investigation of links betweenconsultants whereas the survey results allow onlycomparison across consultants.

The analysis treats firms as the unit of analysis,even though individual consultants sometimes runcampaigns on their own. This presents some difficulties

for interpreting the results. Many firms have multiplemajor consultants. Firms also change form regularly,gaining or losing consultants and restructuring aftermajor campaigns. Much of the change in the industry islikely driven by the instability among these firms. Thedifficulty of sustaining a branded consulting firm withan image independent of its major consultants is itselfan important factor in how the political industrydiffers from other economic sectors. Yet the relevantdata are made public with firms as the unit ofanalysis; as a result, scholars have trouble observingmany of the interesting internal dynamics of consultingfirms. We must begin with a firm-level analysis of theindustry, but keep in mind that consultants often actas free agents from election to election.

Politics as a Business

The political industry has a diverse client base,multiple revenue models, and a variety of products thatcontribute to the bottom line. The results indicatethat even top-level consultants that run U.S.Congressional campaigns are not exclusively focusedthere. Likewise, even the general strategy and mediafirms analyzed here offer additional services and havemultiple revenue streams. As expected, the ways theyearn their money do raise questions about theirincentives as important participants in the democraticprocess.

Table 1 reviews the revenue streams associatedwith each type of client for major U.S. consultingfirms. The first column shows the average firm estimateof revenue from each source in federal election years;the second column shows the same estimates in off-cycle(odd) years. In federal election years, the average

firm takes in 38.7% of its revenue from federalcandidates and 27.1% from state and local candidates,with the rest split between parties, initiativecampaigns, interest groups, and internationalcampaigns. In off-cycle years, the average firm takesin only 9.1% of its revenue from federal elections buttakes in 37.3% of its revenue from state and localcandidates. In off-cycle years, revenue from interestgroups and businesses jumps from 12.8% to 31.9%.Revenue from international firms goes up by more thanhalf, but still comes in at only 3.5% of revenue. Forconsulting firms, off-cycle years create incentives andopportunities to run legislative campaigns for interestgroups and businesses. They also search for state andlocal races; international and initiative campaigns, bycontrast, remain only side businesses; party revenuealso declines. Perhaps scholars should look for morecampaign-style legislative lobbying campaigns in off-cycle years. We might also expect more high-dollarstate and local campaigns imitating federal techniques.When these major consultants move to other arenas, theyare likely to bring their assumptions, opinions, andtactics.

Table 1: Distribution of Consulting Firm Revenue from

Types of Clients

FederalElection Year

Off-CycleYear

Federal Candidates 38.72% 9.09%State/Local Candidates 27.14% 37.31%International Campaigns 2.22% 3.50%

Initiative Campaigns 9.58% 10.35%Political Parties 9.59% 7.88%Interest Groups / Business 12.76% 31.87%Average for all respondents in the 2003 and 2007

surveys, n=80

What are these major consulting firms being paidfor? Their product and service offerings are diversebut a few services dominate. Table 2 reviews thedistribution of the average firm’s revenue by productor service. For the average firm, 42.2% of revenuestems from either producing or buying paid televisionor radio advertising; the vast majority of that subsetcomes from buying, rather than producing, the ads.General consulting also accounts for nearly one-quarterof firm revenue. Direct mail accounts for a significantshare (18.2%) but polling accounts for a lesserportion. Separate vendors, rather than principalpolitical consultants, often take some of thecampaign’s budgets for polling and other services. Formajor consulting firms, it is clear that mass mediaadvertising is the clear source of their sustenance. Tomeet the firm’s bottom line, recommending televisionadvertising is the obvious strategy. They earn moneyfor giving these suggestions and for implementing them.

Table 2: Distribution of Consulting Firm Revenue byProducts and Services

Producing TV/Radio Ads 12.69%Buying TV/Radio Ads 29.48%

General Consulting 24.70%Direct Mail 18.24%Conducting Polls 5.52%Other 9.35%

Average for all respondents in the 2003 and 2007surveys, n=80

Table 3 provides some insight into why consultantsmay earn more from purchasing advertising on acandidate’s behalf than for any other service. Itillustrates the relative use of different compensationschemes among consulting firms. The most commonly usedcompensation structure for consultants is payment by apercentage of expenditures. Well over half ofconsultants report using this form of compensationoften (55.6%). The second most common method ofstructuring candidate-consultant payment is the flatfee. Only 7% of firms report never using this type ofcompensation, suggesting that a flat fee is often usedas a base payment with other fees added. There are someincentives built in for winning elections. Victorybonuses are used by more than two-thirds of firms atleast sometimes. Yet consultants are not willing to betthe firm on a win guarantee. 65% of firms never use afee contingent on winning. The incentives for firmsagain appear to diverge some from those of candidates.Candidates get a job only by winning the most voteswhereas consultants generate more revenue primarily byhaving their client spend the most money on theircampaign. Combining the insights from Tables 2 and 3,it seems clear that most of this money goes to buyingtelevision advertising.

Table 3: Forms of Consultant Compensation

Often Sometimes Seldom Never% of Expenditures 54.43% 16.46% 10.13% 19.00%

Flat Fee 44.30% 34.18% 13.92% 7.59%

Victory Bonus 35.44% 30.38% 21.52% 12.66%Fee Contingenton Win 6.33% 7.59% 21.52% 64.56%Among all respondents in the 2003 and 2007 surveys,

n=79

Consultants appear to have two sets of incentivesassociated with their revenue streams. First, they havea direct economic interest in having candidates spendmoney, especially on television. This may come at theexpense of direct mail, Internet campaigning, and GOTVdrives. Second, since expenditures are likely tied tocontributions, consultants also have an incentive tosee that more money is raised. Rather than save moneyraised early in a campaign, consultants may be betteroff spending it and hoping that their candidates canraise more later. Observing that these incentives arepresent, however, does not mean that they explainconsultant recommendations to candidates. Alternativeincentives, such as the sensitivity to reputation in anindustry with a small client base with opencommunication lines (political candidates), may serveto check the influence of direct economic incentives ina single campaign.

Change and EvolutionWe do not yet know how much these incentives will

change behavior. There are no statistically orsubstantively significant relationships, for example,between the kind of payment arrangements that aconsulting firm uses and their reported behavior incampaigns. We have reason to believe that theincentives favor particular campaign decisions butconsultants do not report that their recommendations tocandidates are determined by the financial interest ofthe firm. Of course, this would be a dangerousadmission.

It is also not yet clear whether consultantbusiness models will adapt to closer align candidateand consultant incentives. From 2003-2007, there wereno statistically or substantively significant changesin how consulting firms generated their revenue orwhich types of clients paid for most of their services.There was a lower effectiveness rating for direct mailin 2007, but this may be a spurious association as the2007 respondents also reported less revenue from directmail.

The results do indicate, however, that themarketplace for consulting services is evolving. Inboth 2003 and 2007, consultants were asked how manyconsulting firms they compete against for each newclient. In 2003, the average firm reported 3.9 othercompetitors for each client. In 2007, the reportednumber of competitors rose to 5.5, a statisticallysignificant change (t=2.5, p=<.01). Most consultingfirms bid for many campaigns and eventually take onmany clients. The industry is apparently getting morecrowded, with each firm seeing more competition. As aresult, the most experienced consultants may sell the

services of their firms but then act more as managersof their firm’s operations on multiple campaigns andless as strategists for any individual candidate duringcampaign season.

To assess likely changes in the consultingindustry, we can also look for expected compositionalchange. Cross-sectional differences in consultantbehavior based on how long consultants have been in theindustry, for example, may provide clues to futuremovements in the industry as a whole. These cross-sectional differences, however, have two components:they account for both the effects of experience and anylikely generational change in consultant behavior.Consultants who have spent more years in the business,for example, receive more firm income frominternational campaigns in election years (r=.38,p=<.01) and more from interest groups and businesses inoff-cycle years (r=.23, p=<.05). These differences areprobably driven by experience generating businessopportunities, rather than by newer consultants showingany aversion to international campaigns or interestgroups. Some differences are more ambiguous. Newerconsultants, for example, are more likely to usepayment schemes that rely on a percentage of candidateexpenditures. This may mean that, with experience,consultants will move on to other financing methods;alternatively, it may indicate that the newergeneration of consultants is likely to use this type ofpayment scheme more often. Newer consultants also takeon a greater number of clients per year, in bothelection years (r=.35, p=<.01) and off-cycle years(r=.33, p=<.01). This may reflect a different way ofdoing business or it may be a sign that taking on onlya few candidates is the preferred option but is onlysecured by experienced consultants. The former would

suggest that the firms of the future are likely to takeon a longer list of clients.

Party Differences and Network Structure

Major consulting firms work almost exclusively in oneparty, creating a divided industry. This creates twoseparate markets for consulting services, withdifferent competitive dynamics. Democrats, for example,report more competition between firms. 97.2% ofDemocratic firms agree that they are facing increasingcompetition, with 69.4% strongly agreeing. 86.4% ofRepublican firms agree that they face more competition(with only 35.7% strongly agreeing). The difference isstatistically significant (t=1.72, p=<.05).4 Contraryto claims in popular press (see Dickinson 2007),however, the two political parties do not haveconsulting firms that use unique methods of payment.There were no statistically or substantivelysignificant differences in the payment schemes used byDemocratic or Republican consultants. In both parties,flat fees and payment by proportion of expenditureswere the most common methods. These findings are inconflict with the tenor of the specific critiques ofDemocratic consultants advance by Armstrong and Zuniga(2006) but confirm the widespread nature of thecompensation models criticized by Klein (2006).

There is some evidence of differences incompetition across ideological groupings. Conservativeconsulting firms report significantly more clients inelection years, averaging 25.4 per year compared to15.7 per year for other firms (t=1.8, p=<.05). Inaddition, liberal consulting firms appear to find itmore difficult to compete for clients. Liberals average5 competitors per potential client whereas other firms

average 4 competitors, a statistically significantdifference (t=1.7, p=<.05).

Differences in competitive structure are alsoreflected in the network analysis. Figure 1 illustratesthe Republican network and Figure 2 illustrates theDemocratic network. Both diagrams include all generalstrategy and media consultants in the 2002Congressional elections (including those that did notrespond to the survey). To visualize connections withvendors that sometimes act as principal campaignconsultants, the diagrams also include direct mail andpolling firms that worked in the same campaigns. Firmswere connected if they worked on the same Congressionalcampaign. The size of each node represents the numberof connections each firm has to other firms; the widthof each line represents the number of connectionsbetween each set of firms.

Figure 1: 2002 Republican Consultant Network

circle=general, square=media, triangle=direct mail,diamond=polling

size of nodes = degree centrality; width of lines =number of shared clients

Figure 2: 2002 Democratic Consultant Network

circle=general, square=media, triangle=direct mail,diamond=polling

size of nodes = degree centrality; width of lines =number of shared clients

Overall, the Republican network has a clear core-periphery structure with a few major firms in eachcategory at its center whereas the Democratic networkfeatures several central clusters rather than anysingle core. Central Democratic firms, on average,develop fewer regular ties than central Republicanfirms, which tend to be highly connected to otherprominent general strategists, media producers,pollsters, and direct mail firms. This suggests acooperative core of conservative Republican consultantswho have many clients, with no Democratic equivalent.The Republican network (density = 0.21, s.d. = .75) isalso more dense than the Democratic network (density =

0.16, s.d. = .56). These findings confirm Klein’s(2006) contention that Republican consultants have amore obvious pecking order but seem to contradict theargument advanced by Armstrong and Zuniga (2006) thatcentral Democratic Party leaders select consultantsuniformly.

As to which types of consultants are central,there is no clear pattern in either network. TheRepublican network features two very central pollingfirms, one central general strategy firm, and eightmedia firms with some claim to centrality. Most of thecentral actors in the Democratic network are pollstersor direct mail firms. More than one dozen Democraticmedia firms are connected to several other actors butnone dominate the network; central general strategyconsulting firms are also scarce among Democrats.

The network analysis offers hints about thepatterns of cooperation and competition in each partybut it cannot reveal the working relationships andreputations among these consulting firms. Firms thatare ‘central’ because they have lots of clients, forexample, may not be the most sought-after. Yet thepatterns in the two networks seem consistent with thefindings from the survey. Democrats may see morecompetition because there is not a clear structure ofmajor and minor firms; liberal firms may face morecompetitors for each client because all of them competefor every opening. In the Republican network, a fewfirms of conservative consultants appear to be central.

Discussion

If scholars want to know the causes of candidatebehavior and variation in campaign content, they needto be attentive to the business side of politics. Both

the structure of consultant competition in each partyand changes in the economics of the political industrymay give rise to patterns that we see in campaigns.Decisions that we assume are driven by politicalcalculations may be partially attributable to economicincentives. If so, the initial evidence provides manyexamples of business incentives that may play a role inhow consultants are shaping our politics.

Four examples of consultant business practicesthat incentivize particular campaign behavior motivatedthis study. In each case, the results provide reason tobelieve that they may be operating in currentcampaigns. First, the most common payment structure forthe consulting industry appears to be payment bypercentage of expenditures. A large portion ofconsultant revenue also stems from purchasingtelevision advertising. These practices could beencouraging consultants to recommend that candidatesspend most of their money on television advertising andto recommend that candidates spend more timefundraising. Of course, consultants often seek repeatbusiness and may lose business if they gain areputation for making decisions that are in the firm’sinterest rather than the candidate’s interest; thenature of the market for consulting services may thuslimit the potential for direct economic incentives in asingle campaign to drive political decisions.

Second, the need for consultants to make money inoff-cycle years may be encouraging some importanttrends, including the use of electoral strategies inlegislative debates by interest groups, the extensionof the electoral campaign season, and theAmericanization of global campaigning. Campaignconsultants do appear to draw much of their off-yearrevenue from interest groups. They also sign up federal

officeholders in off-cycle years, suggesting that somecandidates spend money on consultants before the yearof an election. Revenue from international clients alsoexpands in off-cycle years, though it still accountsfor a very small portion of revenue.

Third, the divided industry of politicalconsulting does appear to create differences in themarkets for consulting services between Democrats andRepublicans. Democratic firms are more likely to reportincreasing competition. Conservative firms report moreelection year clients. Liberal firms average morecompetitors for each new client. The client base isdistinct and so is the competitive process. Fourth,cooperation patterns among consulting firms also differacross parties and across sectors of the consultingindustry. Republicans appear to have a tight and densecore of firms that regularly work together. Democratsappear to have several competitive subgroups ofcooperating consultants. Linkages between highlyinvolved Democratic general strategy and mediaconsultants appear weaker.

None of these four cases provides direct evidencethat economic incentives or competitive dynamics withinthe consulting industry cause candidates to rundifferent campaigns than they would otherwise run. Thefindings are descriptive; the consulting industry hascreated incentives for particular behavior and economiccompetition has played out differently in each party.To see the effects on campaigns, scholars would need torelate the economic behavior of consulting firms withthe political behavior of candidates. Even then, adearth of variation in consultant behavior may make itimpossible to judge the relevant counterfactuals. Wecannot yet say that consultant payment schemes increasethe use of television, that consultant revenue

requirements make campaigns permanent, or thatcompetitive pressures among Democratic firms lead toin-fighting among advisors to the same campaigns. Thusfar, the results only suggest that these effects arepossible and that we cannot discount the potential roleof business incentives and firm competition in changingthe shape of contemporary American campaigns.

The results also highlight some unexpected trendsthat may be changing the consulting industry andaltering the relationship between campaigns as abusiness and campaigns as a political contest. First,consulting firms overwhelmingly report increasingcompetition in their industry. Aggregating theiranecdotal information about their own competitivepressures supports their view. In just four years, thenumber of competitors for each new client reported bythe average firm increased by more than 40%.Competition for new clients may now be requiring moreattention from these firms. As they expand theirservices, they may also be competing more with firmsthat used to focus on different aspects of a campaign.More competition may bring less cooperation. Second,the behavior of a new generation of consultants mayportend a coming acceleration of the move towardpayment by percentage of expenditures and of thedevelopment of firms with more clients in each electioncycle. The future of the industry may lie in firmsgiving less attention to each client, maximizingrevenue by making and buying as many television ads aspossible.

To establish whether consulting businessincentives and competitive dynamics change the contentof American political campaigns, future research willbe necessary. First, we will need to continue to surveythe industry for an extended period to see if current

trends continue and to identify new areas wherebusiness and political practices intersect. Second,scholars will need to analyze whether variation inconsultant usage or consultant practices leads to anyvariation in candidate political practices, such as theextent or character of their advertising campaigns.Third, we will need to match scholarship on the broadpatterns in the consulting industry with qualitativestudies of particular consultant-candidaterelationships or to behavior inside particular firms.Future studies will also need to offer more analyticleverage than the descriptive research pursued here.Yet even if circumstances do not allow causal patternsto be established, we need to pay attention to thepotentially influential role of the business side ofour politics.

Relying on popular commentary and insider accountsto assess the role of the business side of politics canpoint to potentially important factors in campaigndecision-making but it is not a substitute forcomprehensive research. Critics with particular intra-party opponents, such as Armstrong and Zuniga (2006),may overestimate the uniqueness of their own party’sbusiness practices even as they miss some importantcompetitive dynamics that make each party’s industrydistinct. Critics with particular knowledge of a fewcampaigns, such as Klein (2006), may attribute poorbusiness practices to specific consultants that turnout to be products of the organization of the industryas a whole. In several cases, however, this preliminaryresearch confirmed the patterns found by popularcritics. Their emphasis on compensation models, forexample, seems well placed.

Interested observers of American politics, ofcourse, should not be concerned with the everyday

business of consulting firms for its own sake. Weshould care about consultant business practices becausethey may affect how politics is practiced. Incontemporary American campaigns, a great deal ofcontrol over candidate behavior and over messages sentto voters has been handed over to profit-drivenentities. The resulting incentives are not inherentlysinister, but they are certainly open to question andinvestigation. If lawmakers contracted out the writingof legislation to a competitive industry, for example,we might expect the structure and dynamics of theindustry to affect our laws. Even if lawmakers and thefirms they hired shared legislative goals, the outcomesof the process might differ. A similar practice isalready evident in the American bureaucracy, wherecontractors now carry out work that used to beimplemented by government agencies. Scholars of publicadministration have already noticed important changesin public programs and in government-corporaterelations stemming from the contracting system. Weshould look for similar types of effects in the modernsystem of campaigning.

An expanding industry may be changing our politicsin important ways. Consultants are often implicated inthe worst public complaints about modern campaigns.Their answer is typically to suggest that they work intheir candidate’s interest, implementing what works. Ifbusiness incentives create a division in client andconsulting firm interests, however, we need to subjectthat claim to scrutiny. If competition within theindustry offers different choices and patterns ofservices to clients in each party, we need to askwhether the market for political consulting changes theshared definition of what works. By relinquishingcontrol over campaign decisions to consultants,

candidates may have opened the political process to adeveloping industry responsive to its own competitivepressures and profit incentives. Whether we valuecampaigns for their contribution to public deliberationor simply for their role in candidate selection, makingmoney for consultants is unlikely to be at the top ofour agenda. Yet in order to know whether campaigns canhelp achieve any political outcome, we may need to knowhow the business works and exactly who is benefiting.

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1 The 2003 survey was supported by a grant from the Pew CharitableTrusts and administered in conjunction with Christine Trost at theInstitute of Governmental Studies at the University of California,Berkeley. I am grateful to the foundation for their support and toChristine for her helpful contribution.2 I reported results from the 2003 survey, covering consultantopinions on campaign strategy and professionalism, in a previousstudy (see author forthcoming).3 I use standard techniques in social network analysis. For moreinformation, see Wasserman and Faust (1994). The analysis isimplemented in UCInet.4 Respondents see increasing competition despite industryconsolidation among major firms. Even though there are fewer majorfirms now competing, all of the remaining firms may be competingfor business in nearly every race. The party difference resultsare based on responses from 42 Democrats and 37 Republicans.

Shea, Daniel M. and Michael John Burton. 2001. CampaignCraft: The Strategies, Tactics, and Art of Political CampaignManagement. Westport, CN: Praeger.

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Thurber, James A. and Candice J. Nelson, eds. 2000.Campaign Warriors: Political Consultants in Elections.Washington, DC: Brookings Institution Press.

Wasserman, Stanley and Katherine Faust. 1994. SocialNetwork Analysis. Cambridge: Cambridge UniversityPress.

Zeleny, Jeff. 2008. “An Obama Refrain Bears Echoes of aGovernor’s Speeches.” New York Times, 18 February.

author. Forthcoming. “Going Pro? The Professional Modeland Political Campaign Consulting.” Journal of PoliticalMarketing.