I've been reminded recently of the huge investments in political campaigns in the last few years (mainly the 2016 US Presidential elections and the UK Brexit referendum) and I was also reading this other answer, where the effectiveness of donations is discussed. This question is the other side of the coin.
I don't dispute that money for a campaign in general is effective:
- the mere exposure effect of repeating a message or making voters familiar with a certain person or idea might make them more comfortable to vote for them
- resources can be used for market research which can boost the effectiveness of other money spent
- money could also be used in illicit ways (see the Cambridge Analytica scandal or the russian troll farms) which can sway the population more for every dollar spent that way
But, for a candidate that is already well known to almost the whole population, and has been campaigning for more than 1 year (like in the case of the 2016 US elections, for which the primaries started a long time in advance) the usefulness of additional funds seems limited. Especially if these funds arrive "only" 1 or 2 months before the fatidic date (i.e. in the last 5% of the time available for campaigning).
I expect that most people would already be fixed on their opinions (even if unconsciously). There's an argument that there might be parts of the population that are not reached with online, tv or other mass media advertisements, as well as the ongoing need for rallies and in-person campaigning, but it seems that any additional money in this last stretch would have diminishing returns.
Even if the campaign does not succeed, it can be argued that such donations can still be used for the next attempt, but for Hillary Clinton that doesn't seem to be the case (she ruled out a run for the 2020 elections).
Given the fact that Trump's campaign won, even if it raised a lot less funds than Clinton's is just another argument for how money cannot guarantee an election victory (which I think corroborates the idea for such diminishing returns).
I understand that donors can buy a lot of influence with the candidates, and this could eventually have a huge payoff if they bet on the winning one (moreover, a donor can also be genuinely passionate about that candidate's cause... and others still could even be hedging their bets by donating different amounts to more than one candidate in a race). But it's in any case a very costly and risky investment.
If someone is so passionate about a candidate specific causes, it feels like at a certain point donating to lobbying/a campaign for a specific cause (e.g. gun control, reproductive health... ) might yield a better bang for their buck.
Probably huge donations are just increasing as much as donors are allowing them to, and ballooning costs are not a phenomenon exclusive to political campaigns (see health insurance or university tuition costs in the US, which also increased significantly over the last few decades).
So, aren't donations severely affected by diminishing returns? If not: why? If yes, why are huge donors still willing to put such huge amounts of money into them? Especially since they won't get much better odds than 50% for a positive outcome on their investment.