Third place in Iowa is competitive, 4th or 5th place in New Hampshire will not be.
Because we all know how representative New Hampshire is of the rest of the country?
These early primaries really don't mean a lot. The media hypes them for the sake of ratings, and there are some things that can be learned from them, but doing bad in a couple early primaries that account for relatively few delegates doesn't mean a candidate isn't viable.
If a candidate can't find a solid base of support from somewhere they are in trouble, so Thompson does need to do reasonably well in South Carolina, but he doesn't need to do well in New Hampshire, and never really expected that he would.
Considering the fact that the Republican winner in NH has NOT been the nominee for several of the last few elections, and they almost never pick Southerners, Fred wisely realized it wasn't worth the time or money to fool with it. There will be some there who will vote for him, but he's looking at the delegate rich South to use his campaign funds.