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Trump’s campaign is getting the most bang for the buck

U.S. Republican presidential candidate Donald Trump speaks as his wife Melania listens at a campaign rally on caucus day in Waterloo, Iowa February 1, 2016. REUTERS/Rick Wilking (REUTERS)

Here’s the value of being a master showman running for president: Many millions of dollars.

Donald Trump is trouncing the competition in terms of getting the best return on the money he’s spending as a presidential candidate, according to a new Yahoo Finance analysis of campaign spending data. Worst among the major candidates: Ben Carson, Rand Paul and Jeb Bush. With primary elections now underway, the field is likely to narrow quickly, and the candidates running the most efficient campaigns will reap a distinct advantage.

To determine return on investment, or ROI, for each candidate, Yahoo Finance measured the amount spent by each campaign during the last three months of 2015 against the results of the most recent Democratic and Republican polls. In essence, we determined how much money each candidate spent for each percentage point’s worth of poll standings. Here are the results:

Source: Federal Election Commission, ABC News/Washington Post
Source: Federal Election Commission, ABC News/Washington Post

(We used results of the ABC News/Washington Post poll conducted Jan. 26 and 27, 2016. This was a national poll rather than one focused on a single early-voting state such as Iowa or New Hampshire.)

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Trump spent $6.9 million in the fourth quarter of 2015, and led the Republican field with 37% of the presumed vote in the ABC News/Washington Post poll; for each $1 million of spending, Trump “bought” 5.4 percentage points in the polls. Martin O’Malley was a distant second, with 1.9 percentage points gained for each $1 million in spending. Third: Hillary Clinton, with 1.7 points for every $1 million in spending.

One can quibble, of course, with the virtue of measuring campaign spending against poll results. Polls are notoriously fickle; they don’t necessarily predict how people will vote; they measure popularity but not necessarily electability. All true. And soon, we’ll be able to measure spending against actual votes rather than relying on polls as a proxy for voting.

Still, ROI matters quite a lot in presidential politics, especially in a race packed with candidates fighting for the same donors. Trump obviously has a yuuuuge advantage over many of his rivals because of all the free publicity he gets as the nation’s insulter-in-chief. The media reports virtually everything he says, since it boosts their own ROI in terms of ratings. Whatever his virtues or flaws as a candidate, Trump has a genius for grabbing attention that his rivals surely envy.

Comparing the efficiency of campaign spending with the monthly burn rate and financial strength of each candidate can make it pretty clear who has staying power through the primaries and who is likely to drop out soon. Here's what those numbers look like (not including donations to super PACs):

Source: Federal Election Commission, ABC News/Washington Post
Source: Federal Election Commission, ABC News/Washington Post

Underfunded candidates who fail to perform well in early-voting states will have no choice but to drop out soon. Some better-funded candidates may face the same dilemma, with Ben Carson looking particularly endangered. He spent $9.1 million per month during the last quarter of 2015 and ended the year with just $6.6 million in cash. And he gets the second-worst return on his money in terms of poll results. High costs + inefficient spending + fading poll numbers = the end is nigh.

A combination of thrifty spending and a strong cash position, by contrast, suggests longevity. On the Democratic side, O’Malley is probably an outlier on efficiency since he has so little to spend in the first place -- yet he gets to share a debate stage with Hillary Clinton and Bernie Sanders, helping generate name recognition he wouldn't otherwise have. With almost no cash, he’ll probably be gone soon. But Clinton and Sanders get a good return on their campaign spending and have money in the bank, suggesting a long slugfest between them.

On the Republican side, other than Trump, Ted Cruz and Marco Rubio are fairly efficient spenders with sizeable cash hordes. Jeb Bush, on the other hand, gets a relatively poor return on his spending, with a cash pile that’s dwindling. If he doesn’t become a thriftier spender, there won’t be much money left before long—a position nearly all the candidates will find themselves in eventually.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.