In it, but not of it. TPM DC
In some ways this is similar to other recent uses of actors in political ads, such as a fake steel-worker in an ad for gubernatorial candidate John Kasich (R-OH), and the short-lived career of "Jim the Election Guy" in ads for Rep. Michele Bachmann (R-MN). (As it turned out, Jim's real name was Beau, and he is originally from Maryland and lives in California.) On the other hand, there is no immediate evidence that the production processes for the Kasich and Bachmann ads involved the use of insulting terms about the target audiences.
As the Politico reports, the NRSC is distancing itself from this mega-gaffe, pointing to their subcontractors as being responsible for it:
A GOP official said the NRSC had nothing to do with the casting directions, which were issued by a subcontractor, unbeknownst to the NRSC. The official said it is standard practice by both parties for political commercials to contract outside of their campaigns for actors.
Brian Walsh, the NRSC's communications director, said: "West Virginians understand that most commercials on television are produced by outside professionals with actors in studios. While it is one thing for actors to impersonate someone they're not because it's their job, it is entirely different when a governor is doing that so he can get promoted."
Of course, this style of campaigning does seem to be working. The TPM Poll Average gives Republican businessman John Raese a lead of 49.4%-43.4%.