The State of the Political Industry [Campaigns & Elections]
(Campaigns & Elections Via Acquire Media NewsEdge) A BIPARTISAN TAKE ON THE CHALLENGES AHEAD FOR POLITICAL MEDIA, FUNDRAISING AND PHONES
Questions about the state of the professional political industry are best answered by leaving partisan politics out of the equation. So after an election cycle of monumental change across several of the industry's major disciplines, we decided to ask a series of political consultants to reach across the aisle and work with someone from the opposing party to assess where things stand in their particular sector of the business.
This issue, we feature pieces that focus attention on three sectors of the political industry that saw plenty of change in 2012- media, fundraising and phones. Each analysis is a joint effort- one Democratic consultant and one Republican consultant teamed up to pen each piece. In subsequent issues, bipartisan teams of consultant writers will examine mail, polling and technology, among other disciplines.
In the pages that follow, Democrat Ann Liston and Republican Scott Howell look at the challenges ahead for political media. Republican John Simms and Democrat Stu Trevelyan- two giants of the political fundraising worldexamine the coming fundraising arms race. And Democrat Marty Stone and Republican Matthew Parker explain why cellphones aren't the greatest threat facing the political phone industry.
WHY IT'S UP TO MEDIA FIRMS TO GET MORE CREATIVE
SCOTT HOWELL & ANN LISTON
Scott Howell is president of Scott Howell & Company, a Republican media consulting firm. Ann Liston is a partner at the Democratic media firm Adelstein Liston.
A billion dollars. That's how much was spent on television advertising in the 2012 presidential race- $197 million of it in Ohio alone. And, in case anyone didn't notice, there were a few other races on the ballot too.
To paraphrase the late Illinois Sen. Everett Dirksen, pretty soon, we're talking about real money.
In the post-Citizens United world, none of this came as a surprise. But as the noise of political advertising reaches deafening levels, the pressure mounts on media firms to find ways to pierce through and reach the elusive- and fractured- persuadable voter.
What does all this mean for the future of political advertising Here's how we see it.
TV still rules the media world
"Don't put off until tomorrow what you can do today." The old adage from America's first media consultant, Ben Franklin, has never been more apt for today's media landscape.
In the past, campaigns have waited until the final few weeks to take their message to the airwaves. But in the flood of advertising platforms, expect to see more and more candidates, especially incumbents, shift their ad buying earlier to define themselves and their opponent, beating other players to the punch.
The National Republican Congressional Committee was able to retain its majority this past cycle by employing early messaging as an integral part of it's strategy, defining incumbent Democrats in vulnerable seats while at the same time propping up many of their own seemingly vulnerable incumbents.
The same holds true in races like Tammy Baldwin's historic Senate win in Wisconsin. Super PACs affiliated with Democrats were defining Republican Tommy Thompson within hours of his primary win. And President Obama, of course, was defining Mitt Romney even before the first Republican primary ballot was cast.
Some who have surveyed the political media landscape are now putting forth the argument that television is dying, but we think it's clear that 2012 proved no one can write its eulogy just yet.
Broadcast television is still the only medium that reaches virtually every household in America, with unmatched audience sizes. Even in a DVR-driven world, industry studies show that only 13 percent of commercials in prime time are fast-forwarded, and a majority of people who watch recorded commercials in their entirety do so within three days of the original airdate.
Over the next few election cycles, TV advertising will continue to reach record levels, but as audiences fragment further, digital platforms are sure to take a larger slice of the pie.
Why rob banks
When asked why he robbed banks, notorious criminal Willie Sutton replied, "Because that's where the money is."
Today, digital advertising is no longer an experiment for political campaigns. It's where the viewer is. In a world where you can pause live TV, video chat on your phone and rely on 140-character tweets for breaking news, single platform campaigns won't cut it.
And while the same concern about fragmentation among television audiences carries over to the digital world, the latter has a significant advantage: targeting. The ability to target different audiences with different messages online is unparalleled. Campaigns not only know where their supporters live but what car they'll drive to the polls and where they'll stop for coffee along the way- enabling them to create and place highly targeted ad content.
Ads aren't just targeted to a particular demographic. They are targeted to individuals with messages as unique as the people receiving them. It's not quite as effective as a candidate stopping on your doorstep, but it's darn close.
The Obama campaign was a great example of this practice in action in 2012. With its early investment in digital media and a savvy analytics team, the Obama campaign demonstrated that the return on investment for digital advertising can be high. Democratic candidates in targeted states, who might normally have been on the losing end, were able to utilize and benefit from Obama's digital superiority. As these tools become more commonplace, smaller campaigns will rely more heavily on digital, and the analytic targeting pioneered in 2012 will become the norm.
Whether it's pre-roll, banner ad or promoted tweet, the ways to deliver your message change faster than a teenager's Facebook status. And though the ability to target online enables us to be more precise with our messaging, the number of digital platforms demands that campaigns produce more content for a sustained period. Gone are the days where a campaign can get by with an introductory bio video and a few Flickr additions on their website, until the television spots can be posted on their site.
Campaigns need a constant stream of new video and messaging content that can be tailored for different platforms. There's no one-size-fits-all approach. To keep up, traditional media firms will need to broaden their suite of services and find ways to provide large volumes of content to voters, donors, the press, and the DC political community. The rise of these new platforms to reach voters opens the door for a lot more creative content- and experimentation.
Sure, there will still be those remarkable 30-second television ads that become the benchmark for all others, but the digital world erases many constraints. Campaigns get more than one bite at the apple. Thirty seconds can be stretched to 45, 60 or 120. It can also just as easily be cut down to 15. And with the ability to target certain audiences, there's less of a need to cram a 10-point plan into every piece of communication.
This cycle certainly saw its share of creative content. But the opportunity to be more creative isn't just a luxury; it's a necessity. 72 hours of video are uploaded to YouTube every minute. Not one of those minutes goes by where people aren't subjected to some sort of advertising on their computer, phone or even on public transportation. As people become desensitized to ads, the need to change the formula is paramount.
So what works
The elusive search for the "secret sauce" reveals that there is in fact no secret sauce. The most successful online persuasion and fundraising communications experiment with different messages, images and content. And because it can be instantly measured, the nimble campaign communicators can monitor and adjust on the fly.
Just as news cycles are no longer measured in days or day parts, but in quarter-hour increments, political campaigns and their messaging firms will need to adapt accordingly. Everything from the way we conduct research to the way we fundraise to the way we message to voters is now in a state of constant evolution. We now live in a mobile society and we must learn to be mobile messengers.
The media firms of the future will only succeed if they embrace the new tools of communication. The best firms will always be the ones producing quality creative content based on sound strategies. But it will be the nimble innovators- those willing to embrace change and challenge conventional ways of communicating- who flourish over the next decade.
Sound strategy and quality creative combined with speed and surgical precision- this is the new norm for success.
'Today, digital advertising is no longer an experiment for political campaigns. Ifs where the viewer is. In a world where you can pause live TV, single platform campaigns won't cut it."
THE FUTURE OF THE FUNDRAISING ARMS RACE
JOHN SIMMS & STU TREVELYAN
The fundraising technology created by John Simms of the Republican firm CMDI and Stu Trevelyan of the Democratic firm NGP VAN powered the majority of all funds raised for 2012.
Fundraising played a much larger role in the 2012 election cycle than ever before. Both major party presidential candidates declined federal funds and went on to shatter fundraising and spending records. With the increasing importance of joint fundraising committees (JFCs) and Super PACs, political fundraising has become an arms race.
CMDI and NGP VAN have the honor of helping our candidates, Republican and Democrat respectively, build highly competitive $100 million-to-$i billion plus organizations every four years. And every year we work to keep our feet on the innovation pedal by working with campaigns in competitive congressional and statewide races build $io-to-$50 million organizations.
In assessing the state of the political fundraising industry, we've divided our analysis into two main sections- one that offers a look back at the 2012 cycle and another that looks ahead to 2013 and beyond. While we co-wrote an intro and conclusion, we decided to tackle each section individually from the perspective of our respective party.
Observations from 2012
In 2012, large-dollar donors (donors who gave more than $200) continued to be the foundation of Republican campaigns. The Romney campaign utilized CMDI's web and mobile software to manage the entire solicitation process of high-dollar donors by volunteer and professional fundraisers (also known as bundlers).
By the end of 2012, the majority of all large donors was solicited and tracked using this software, known as ComMITT. Every stage of the solicitation of donations and the recruitment of new bundlers was recorded and managed in ComMITT. Finance team members had a transparent view into how each of their fundraisers and bundlers were performing. This real-time data informed a dynamic fundraising process entirely dependent on intelligent donor cultivation and highly motivated volunteers.
Republicans successfully raised more than half of all funds through event and bundling (direct fundraising appeals) channels. Direct mail was the second largest channel, followed closely by email/online and telemarketing last. Interestingly, while the total money raised was remarkably greater than 2008, the contributing percentage raised from each fundraising channel was not significantly different. The greatest difference was that online/ email channels contributed more than double the percentage of total funds raised in 2008. A partial explanation for this increase is the simple fact that a greater effort was made to raise money online.
If one listens to the chatter, direct mail has lost its shine in comparison to sexy new digital apps, tracking web visitors and online advertising. The 2012 gross numbers would indicate otherwise, as direct mail was the second largest fundraising channel and raised more than twice as much as the web, although we might learn from examining cost and ROI. As of 2012, there is still a large pool of Republican donors who continue to respond to mail.
For the 2012 cycle, Internet giving seemed to be primarily driven by major news events rather than prospect cultivation. About a dozen days of online response made up a third of all funds raised online. The gifts from these few days can be directly attributed to offline events such as the presidential debates and the Supreme Court's ruling on Obamacare. Not surprisingly, online and direct mail low-dollar fundraising got traction in September and October.
As any good fundraiser knows, the case for giving is most persuasive to a screened prospect when a well-tested message and technique is delivered. Knowing what message and technique will be most effective for a segment of donors requires rigorous and repetitive testing. Delivering the message through the channel most likely to elicit a response requires cross-channel analysis without the impediment of silos.
2012 was a year of great fundraising success for Republican finance teams, but there are lessons for the future, too. The first lesson is that it is possible to raise much more money than anyone ever thought possible. Hopefully a second lesson is that centralizing marketing data across all marketing channels and conducting rigorous analysis and testing will optimize an already very productive fundraising process. The result will be more funds raised at lower cost.
Breaking down the silos, information sharing, sound research and testing can optimize and further improve future fundraising production. Carefully planned and executed upgrades and multiple gifts strategies cannot be ignored.
Heading into the 2012 cycle, Democrats and progressives knew that Citizens United meant a flood of special interest cash for Republicans and pressure on Democrats to raise more money than ever to counter that flood. Add to that a tough economy and difficult electoral dynamics in the House and Senate, and Democrats knew they'd need to innovate on the fundraising front to succeed in 2012.
Three themes emerged from Democratic fundraising efforts this past cycle. First, Democratic campaigns learned to interact with supporters holistically, rather than via the old, fragmented approach of having fundraising, field, and digital departments all interact in silos with supporters. When campaigns are run with data silos, they do inefficient things like send a major contributor an email asking for $25 because the digital silo doesn't know that the contributor already wrote a check for $1,000 to attend an event.
Given that most Democratic campaigns used the NGP fundraising product, which has email and digital features, Democrats are able to avoid having fundraising and digital silos. This allowed them to do things like send emails with SmartLinks, which automatically populate a contribution page with each supporters' highest previous contribution (online or off). By breaking down silos, Democrats are turning volunteers into contributors, and getting blog commenters into the fundraising funnel.
Second, Democratic campaigns large and small are mastering small-dollar fundraising online. Online fundraising is now a significant part of Democratic fundraising at every level. Campaigns are driving traffic, collecting emails, cultivating and segmenting through petitions, converting supporters to small-dollar contributors, and then successfully getting those contributors to give again or become monthly sustainers.
Third, campaigns of all sizes raised more as a result of testing to maximize results. President Obama's campaign and Dan Wagner's impressive analytics team provided the best example, impacting fundraising and every other aspect of the campaign by collecting data from NGP, VAN, Blue State Digital, and internal products and then running tests and maximizing results across a unified data set.
Driven partially by the outstanding training programs of the New Organizing Institute, Democratic GAIN, and others, even Democratic campaigns without significant resources maximized their fundraising. Democratic campaigns A/B tested emails, compared results of landing pages and tracked dollars raised by various online ads. They analyzed data across departments and found ways to get higher conversion rates and larger and more frequent contributions.
2013 and beyond
We face an enormous challenge in the next four years to match and leapfrog the opposition. Republicans will focus on developing an analytical environment enabling us to better understand the political landscape, to detect subtle changes and identify opportunities, and to recruit and train a base of talent with the right match of intellectual capital and commitment. We need to better target our resources, messaging and activities to optimize our chance to win, not only in the fundraising race, but also at the polls.
Moving forward, campaigns must embrace technology that will centralize all relevant data, deliver better information and facilitate customized cross-channel fundraising response vehicles that are personalized on the donor level. How appeals are created, tested, analyzed, and delivered will continue to evolve.
In the midst of all this change, we cannot be distracted by shiny objects or untested theories. It will never be just one thing that leads us to success. The fundraising basics of rigorous testing for the best performing message and technique will always be paramount to success.
Many of the same pressures that made 2012 challenging for Democrats remain: the prospect of massive outside spending propping up Republicans, more Senate seats to defend and a Republican House majority. Happily, some of the trends I noted above will continue to bear fruit this cycle.
Democrats have a clear tech advantage, although that's going to be at stake in 2013 and beyond as Republicans strive to catch up. The active email lists of Democrats have become a gift that keeps on giving, via small-dollar contributors. Writing about Democrats' use of data, analytics, and experimentation, Slate's Sasha Issenberg noted that, "No party ever has ever had such a durable structural advantage over the other on polling, making television ads, or fundraising, for example."
In 2013 and beyond, one trend will be the increasing use of the structured relationship data that social networks like Facebook make available. Obviously, relationships have been used for bundling and by fundraisers for many cycles. Social grid data enables the creation of advanced tools that turn your supporters into sophisticated fundraisers.
In the 2012 cycle, new products like NGP VAN's Social Organizing used social grid data to empower of candidates like Elizabeth Warren to target the right friends for the right tasks (from voter IDs to GOTV to volunteer recruitment). In the coming years, we expect to create and see products that allow campaigns to use the social capital of their supporters, delivered through apps that access the time capital of supporters- letting supporters help out when it's actually convenient for them (on-demand fundraising).
As we look towards the future, it's important to recognize that fundraising is changing, but we shouldn't be distracted by the shiny bauble. We need to stay focused on results. Things like mobile and social will find a place, but despite the clickbait headlines pronouncing otherwise, email is not dead, direct mail is not dead, events are not dead, and call time isn't dead For the vast majority of campaigns, call time is still going to be a primary source of funding.
In the same way that much of the Obama campaign's innovation on the ground resulted in more efficient door knocking, innovations on the fundraising side will succeed by existing tactics more effective.
Donations are the oxygen that campaigns need to survive. Since the passage of McCain-Feingold, the of money raised each cycle has grown exponentially, and we have yet to meet a campaign manager who doesn't need to raise more. Having more money than your opponent doesn't guarantee a win, but without money it is impossible to get your message out to voters.
As partisan vendors, NGP VAN and CMDI see the ability to work with our respective parties and act as the of instructional knowledge as a serious privilege. And it's our ability to capture and share this knowledge that will ensure our respective party committees and campaign teams keep innovating and moving forward.
"With the increasing importance of joint fundraising committees and Super PACs, political fundraising has become an arms race."
MOBILE PHONES ARENTOUR INDUSTRY'S GREATEST CHALLENGE
MATTHEW PARKER & MARTY STONE
Matthew Parker is founder and CEO of Front Porch Strategies, a Republican telephone voter contact firm. Marty Stone is a partner at Stones ' Phones, a Democratic telephone voter contactfirm.
The end of the 2012 election cycle finds the phone industry facing a number of challenges which could change the way phones are used in campaigns in the near future. Taking stock of the work done over the past year, we feel that phone strategists serving both parties have lessons which must be learned in order to maximize the effectiveness of phones as a campaign tool going forward.
One of the most discussed issues affecting the industry is the increasing number of voters who use mobile phones as their primary or only phone, and the regulatory difficulties involved in reaching them. One-in-three American households and six-in-ten voters age 25-29 now have no landline.
In October, the FCC issued an enforcement advisory prohibiting autocalls to mobile numbers without a prior recipient opt-in and threatening violators with stiff fines. Voters with only mobile phones will continue to become a larger segment of the electorate, and it will become more and more critical for campaigns to reach them. The phone industry will have to adapt and innovate tactically and technologically so long as over-zealous federal regulators make it difficult to reach these voters.
However, too many campaign managers and candidates have started to assume that every voter has a mobile phone and that their phone programs would therefore become irrelevant. Work done by our firms in the recent campaign cycle shows this isn't the case. After scrubbing out lists for mobile numbers, 80-90 percent of the landlines remained, and our contact rates did not fall. We were still able to reach the vast majority of voters with our Telephone Town Halls, live ID and GOTV calls, and automated messages.
At the moment, we do not believe that the shift to mobile phones is the most severe problem facing the industry. We feel there are a number of other areas where the industry can and should take steps to improve the effectiveness of their phone campaigns.
One serious problem is that many campaigns have de-emphasized obtaining hard voter IDs and messaging on key issues- both tasks phones are well-suited for- in favor of leaning solely on microtargeting data. In 2012, Democrats and Republicans alike used microtargeting to pinpoint their messaging. At the presidential level it worked very well for President Obama. However, we're seeing microtargeting overused on races that aren't at the top of the ticket and aren't capturing the daily attention that presidential campaigns do.
When down-ballot campaigns overuse microtargeting, the message doesn't get through. For these campaigns, if you're not talking about the top issues driving the conversation, you're not being heard. Microtargeting has its place, and has been one of the important innovations in campaigns in recent years, but it is not a substitute for getting hard IDs- which are still best obtained by phone.
This cycle, we also saw candidates on Telephone Town Halls try to push microtargeted messages to a wide audience only to get too far "into the weeds" and have their audience react with disinterest.
Another challenge affecting the industry is that phone services, and direct voter contact in general, are not being thoroughly and accurately considered in campaign budget plansor being short-changed when those plans are suddenly altered. This often occurred as a response to involvement from a Super PAC.
When Super PACs started spending money on TV early, campaigns felt forced to respond, and phone budgets were often the first to get the ax. Spooked by the entrance of a Super PAC into their race, campaigns would react with a big buy on a quick ad only to have the Super PAC go dark. We saw too many campaigns abandon their campaign plan too early and spend money recklessly. When money was spent on phones, it was sometimes not spent as efficiently as it might have been.
Much of the spending done on voter contact is done piecemeal. We think campaigns could get more for their money if they made realistic advanced budget projections for robust voter contact rather than making expenditures on a reactive, ad-hoc basis.
The final major challenge that the industry is facing at the close of the 2012 election cycle lies in the fact that Americans are changing the way they cast their votes. Over 32 million Americans cast their ballots early in 2012. Campaigns will in turn have to change their strategies for reaching them. Election Day can now last weeks, depending on the state, and we can envision elections in the future where the majority of ballots are cast early.
We achieved some success in local races this cycle with strategies aimed at building a decisive lead during the early voting window, and we'd suggest this is a trend that campaigns (especially Republican campaigns) need to wake up and take more seriously. As more and more Americans vote early in future elections, it will become absolutely necessary for campaigns to have a plan to "win" or at least be competitive in the early vote, and phone strategists will have to be prepared to reach likely early voters in a timely and effective way.
The experiences of the 2012 election cycle teach clear lessons about how the industry must adapt and improve going forward in order to best serve our clients and maintain our relevance in future elections. The rise of mobile phones as primary or sole contact lines presents a problem that the industry will have to be willing to innovate and experiment in order to overcome. The importance of obtaining hard voter IDs must be rediscovered- campaigns must realize they simply cannot afford not to do it.
The effectiveness of phones can be enhanced if campaigns prioritize voter contact in their budgets and stick to their budgets rather than spending in a reactive and piecemeal fashion. Finally, as campaigns are forced to place greater emphasis on early voting, phone consultants will have to be prepared to reach early voters with accuracy and mobilize them creatively and effectively.
Along with the challenges, there are good reasons to believe that phone services can develop into even more useful campaign tools in the future. The Telephone Town Hall has come into its own as a means for reaching voters- we have gone from doing a few dozen events per cycle to hundreds. At the same time, as some campaigns are questioning the relevance of phones and fretting about regulatory difficulties, the commercial sector is recognizing the value of phones and especially Telephone Town Halls as one of many channels of communication to reach their audience in spite of a much stricter regulatory environment on commercial phone contact.
It is impossible to be sure how changes in the regulatory environment, in election laws, and in technology may change the role which phone services play in campaigns four years from now. But looking back at the 2012 campaign has allowed us, we think, to say with certainty that these are the challenges of most critical importance for the industry going forward. The midterm elections of 2014 will give campaigns and consultants an important opportunity to improve their tools, refresh their strategies, and find out how these challenges can best be overcome.
"Phone strategists serving both parties have lessons to be learned in order to maximize the effectiveness of phones going forward."
"Many campaigns have deemphasized obtaining hard voter IDs and messaging on key issues in favor of leaning on microtargeting."
(c) 2013 Votenet Solutions Inc.
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