An Explosion for the GOP, A Tightening for the Democrats …

     An Explosion for the GOP, A Tightening for the Democrats
                   As Race for the White House Officially Gets Under Way,
                Opening Contests Have Very Different Effects for the Two Parties

Say what you will about the power of Iowa and New Hampshire, it is beyond a doubt that
America's opening election season contests have once again demonstrated their influence on the
national scene. Not only has John McCain's stunning comeback in New Hampshire launched
him to the forefront of the Republican pack, Barack Obama and Hillary Clinton's split decision in
the Hawkeye and Granite states has ensured a tight two-way race for the Democratic nomination.
Candidates who fared poorly in Iowa and New Hampshire have either seen their numbers drop
sharply in our national poll or have dropped out of the race altogether. However, with Mitt
Romney's win in Michigan and John Edwards' vow to fight on through to the convention, we could
see, for the first time in decades, both parties' candidates battling it out for months to come.

John McCain's dominance of the Republican field is striking not only in its depth but also its width.
It seems there's virtually no question you can ask of Republican primary voters in which they
won't put the senator from Arizona on top. In addition to his impressive 15 point lead in the
horserace, he also enjoys the highest favorability rating (75%) and lowest unfavorability rating
(14%) of all the leading Republican candidates and leads on every single presidential trait the
Diageo/Hotline poll asked among Republican primary voters. His 29 point lead (47% to 18%)
over Giuliani on the question of who has the "experience necessary to be President" is
particularly meaningful as this trait was picked as the most important by Republican primary
voters by a margin of 13 points. Also, McCain's support is the firmest among the GOP
candidates. 47% of his backers say they will definitely support him, which contrasts sharply with
the 28% of second place Huckabee's supporters who say the same. Lastly, he is the top second
choice of nearly all the other Republican frontrunners' supporters, which means that as others
drop out, his numbers should move up.

Where is all this newfound support coming from? It's clear from the poll that as McCain has
risen, Giuliani and, to a lesser extent, Thompson have plummeted (Romney and Huckabee
remain virtually in the same position as they were in December). For Giuliani, not only is the
former mayor lagging badly now in the national primary ballot (having fallen from first place last
month at 21% to fourth place this month at 12%), his numbers on all the presidential traits have
dropped sharply. Moreover, Republican primary voters are extraordinarily dubious about
Giuliani's chances of winning the nomination: only 45% say they think it is likely that Giuliani will
wind up the party's nominee as opposed to 82% who say the same for McCain.

It's difficult to know strictly from the polling data exactly what is driving this sudden avalanche of
support for McCain. History may very well be a more prudent place to look. Since the state
primaries were first given teeth by the national parties in 1972, only once has there been a
protracted fight for the Republican nomination: the 1976 battle between President Ford and then
former Governor Ronald Reagan. Besides that one year, the GOP has tended to coalesce
quickly behind a well-known candidate, typically the one who is regarded as having paid their
dues and whose time has come. McCain, despite having run an insurgent campaign against the
establishment pick in 2000, has since worked hard to win over many in the party and has been a
staunch backer of President Bush and the Iraq War, even when both have been unpopular with
the general public. It could very well be that his patience and loyalty ­ not to mention widely
respected personal characteristics and large following amongst a substantial swath of the
electorate beyond the GOP ­ are finally paying real dividends. It also couldn't hurt that
immigration, the issue that damaged him the most severely over the summer of 2007, has
receded somewhat into the background (the issue dropped 6 points in importance from our
December poll among Republican primary voters), while subsiding violence in the Iraq War
`surge,' one of the pillars of McCain's campaign, could also be helping his cause. However, one
potential indication that McCain could be a vulnerable frontrunner, especially if the race narrows
sharply, is that half (51%) of his supporters say they may change their minds by the time they go
to the polls.

On the Democratic side, Iowa and New Hampshire left two standing: Barack Obama and Hillary
Clinton. This month, we once again see them in a statistical tie for first (Clinton, 38%; Obama,
35%), albeit a slightly tighter one than in December (Clinton, 35%; Obama, 30%). Of particular
interest, however, is the upswing in presidential traits that Obama is experiencing, as opposed to
the relative stagnation of Clinton on these key markers. With the sole exception of having the
"experience necessary to be President" (where Clinton has seen her number rise by 10%), she
has either stayed virtually the same or dropped down on the three other measures. Obama, on
the other hand, has improved his performance on all key traits substantially, and now enjoys a 9
point lead over Clinton on the crucial question of being an agent of change. This is clearly the
dominant issue in this election for Democratic primary voters as 50% say that "will lead the
country in a new direction" is the most important trait for a candidate to have. This is more than
double the second place "has the experience necessary to be President" (24%).

Another potential worry for Hillary Clinton is revealed by looking at two groups who will be crucial
for Clinton and Obama throughout the primaries. While Clinton still leads among women
Democratic primary voters (Clinton, 41%; Obama, 35%), Obama's number has moved up 7
points from last month whereas Clinton's has stayed virtually the same. As for African-American
Democratic primary voters, Obama has increased his margin from 21 points in last month's poll
(Obama, 49%; Clinton, 28%) to 30 points this month (Obama, 59%; Clinton, 29%). There is also
a remarkable difference between the two frontrunners when it comes to age groups. Democratic
primary voters between the ages of 18 to 34 prefer Obama by 54% to 29% while voters over the
age of 65 back Clinton, 50% to 30%. However, a potential boon for Clinton could come in the
form of Edwards dropping out of the race. While there has been some speculation that Edwards'
voters would gravitate toward Obama, our numbers show that 45% of Edwards' supporters pick
Clinton as their second choice candidate, while only 26% choose Obama.

Taking in everything, one gets the sense that despite coming up short in New Hampshire, overall
the momentum is still with Obama. His numbers are climbing faster than Clinton's and he has
demonstrated that he can appeal to voters across the Democratic spectrum. However, Clinton is
still a formidable opponent, and the Democrats could very well be faced with a drawn-out primary
battle. Things could even reach the point they did in 1968 when the Democratic convention
kicked off with the nominee still unknown. However, unlike in 1968, this is doubtful to cause
significant strife as both candidates are extremely well-regarded by the vast majority of
Democrats. In fact, when asked who their second choice candidate is, 53% of Obama's
supporters say Clinton, and 52% of Clinton's supporters say Obama, which indicates that either
candidate would be acceptable to their opponent's backers. Both candidates also enjoy high
favorability ratings among Democratic primary voters, with Clinton at 88% and Obama at 76%.
This makes it very likely that the Democrats will quickly unite behind their party's nominee when
the time comes.

The fact that both candidates are viewed so positively is perhaps one of the factors playing into
the Democrats' view that their party has by far the best chance of winning back the White House
in November. This is especially true when compared with how Republicans feel about their own
ability to hold on to the White House this year. Overall, more than four-fifths (83%) of Democrats
believe that their candidate will win the presidency in November, as opposed to less than half
(49%) of Republicans who feel the same way about their party's chances.
This sense of pessimism among Republicans could be very well-founded. Historically speaking,
when voters are deeply concerned about the economy, the incumbent party in the White House is
typically punished. Since December, the economy has leapt from 13% to 24% on the list of most
important issues facing the country, placing it well ahead of the war in Iraq (15%). Also, in our
head-to-head match-ups, the Republican candidates do not fare well, with the sole exception of
John McCain. We show the three other Republican frontrunners (Huckabee, Romney, and
Giuliani) losing to all three Democratic candidates (Clinton, Obama, and Edwards) by double-digit
margins. The exception is in the case of a Huckabee-Clinton match-up, which still favors Clinton
by 9 percentage points. Even in the case of McCain, there is a statistical tie with Clinton and
Obama, though he does beat out Edwards by 8 points.

Overall, the results of our January poll indicate that the races on either side appear to be
solidifying. The Democratic race is truly a two-person contest with Edwards having missed his
chance for a significant boost with his loss in Iowa. As for the Republicans, McCain is the one
clear frontrunner and seems to be leaving the rest of the pack behind. However, this should in no
way be taken to mean that the GOP race is over, especially considering Romney's recent win in
Michigan. And, as Rudy Giuliani himself can attest to, one can be up one month and down the
next.




                                               ~~




Ed Reilly is the President of FD, a leading business communications and consulting firm. He has
conducted the Diageo/Hotline poll for the past three years.


About FD: One of the most highly regarded consultancies in the communications industry, FD
employs more than 660 staff and advises more than 900 clients worldwide through its hub offices
in London and New York, as well as its network of wholly-owned offices in Bahrain, Beijing,
Bogota, Boston, Cape Town, Chicago, Dubai, Dublin, Frankfurt, Hong Kong, Johannesburg, Los
Angeles, Manchester, Moscow, Panama City, Paris, San Francisco, Shanghai, Sydney and
Washington, DC. With a 20-year history of advising clients in both the private and public sectors,
FD's services include financial public relations, capital markets communications, public affairs,
crisis and issues management and corporate, business-to-business and business-to-consumer
communications. FD is also a market leader in M&A advisory work. FD is structured around
specialist sector teams operating on an international basis, covering consumer industries,
financial services, basic industries, business services, life sciences & healthcare, media, real
estate, technology and telecommunications. FD is a division of FTI Consulting Inc. (NYSE: FCN),
the global business advisory firm. For more information, please visit www.fd.com.