The McCain campaign has confirmed that they're reducing their presence in Michigan to concentrate on states they think they can take from Obama: Pennsylvania, Minnesota and Wisconsin, despite the fact that Obama has 3 to 5 point leads in all those states and they traditionally vote Democratic.
It's fairly obvious that the McCain campaign is financially strapped. They chose to take federal money for their campaign which precludes them from public fundraising, while Obama chose to not go that route and can spend as much money as he can raise, which so far, has worked to his advantage. In past years, the Republicans didn't have to spend much in states like Virginia, or North Carolina, or Indiana but Obama has made serious inroads in those states which requires the Republicans to spend large amounts of money for expensive commercials and man large campaign offices in states that had long been thought to be solidly Red. (The McCain campaign didn't even bother to staff Indiana thinking it had it in the bag.) And Florida, a state with 4 expensive media markets; Miami, Orlando, Tampa/St Pete's and Jacksonville is very competitive this year thus eating up millions of McCain dollars for commercials and field offices they had hoped they wouldn't have needed. Giving up Michigan, was probably the only move they had left if they wanted to spend the money where it would do the most good. Concentrating on Minnesota/Wisconsin allows them to focus their ad buys to Minneapolis/St Paul, a media market that covers most of Minnesota and the western half of Wisconsin. In a sense, geography and the proximity of media markets play a major role in the shape of a modern political campaign.
That's the problem with Michigan and the reasoning behind the McCain campaign's decision to pull out; it all boils down to geography. Michigan is an oddly shaped state with a densely populated lower peninsula and a sparsely populated upper peninsula, surrounded by huge bodies of water, (The Great Lakes) and bordering Canada along it's eastern half. Spending huge amounts of ad money in Detroit means that half that money is being spent on spreading the McCain message to the fine citizens of south central Ontario. Dumping Michigan makes far more sense than dumping Pennsylvania, where at least ad dollars spent in Philadelphia and Pittsburgh will also bleed over into respectively, New Jersey and Eastern Ohio. And, McCain can't afford to blow off Ohio. The race there is still very tight and McCain has to take Ohio or Florida if he wants to have any choice of winning. But Ohio's 20EV come at a huge cost; it's a large state with three major media markets, (Cincinnati, Cleveland, and Columbus) and three mini-major markets, (Dayton, Akron and Toledo). That's millions and millions of dollars of ad time to remain viable in Ohio.
And this is another option for Obama to defeat McCain. If the Obama campaign has the money to spare, they might start running more ads in Texas and the rest of the deep South. The latest polls had McCain only 9 points ahead in Texas and 8 points in Mississippi. If the Obama campaign were to start doing more campaigning and ad buying in those markets and the poll numbers continued to improve for Obama, then the strapped McCain campaign would be forced to start running in states they don't have the money to compete in. Having to spend tens of millions of dollars for ads in Houston, Dallas and San Antonio would probably bankrupt the Republicans.