In 2012, President Obama’s campaign spent about $112 million on digital media, which was divided among many media companies and some ad platforms.
According to Nate Lubin, who was the campaign’s digital director and earlier this year left his position as director of digital strategy at the White House, “We got pitched by I don’t even know how many vendors.”
In the coming year, with far more money coming down the pipeline, DC ad budgets have attracted a larger swath of tech companies, many of them purveying programmatic solutions. Among those to have opened a DC office or launched a political accounts team are Rubicon Project, Rocket Fuel, Xaxis, AppNexus, Centro and Collective.
“The number of third parties setting up shop is crazy,” said Zac Moffatt, the Romney campaign’s digital director in 2012 and CEO of Targeted Victory, a Republican digital media-buying agency. “There are a lot of leases being taken out, but I’d be concerned. Some of those offices are going to end up with tumbleweed blowing around.”
Presidential campaigns are projected to spend somewhere in the low billions on digital outreach through next November, according to Borrell Associates and others. Moffatt said he understands the rush to be an early player in an expanding market, but is looking pragmatically at the next year.
“The reality is that campaigns added up are like having another mid-size auto marketer, if that,” he said. “There’s a disconnect between the number of people trying to get in the door and the size of the market as it currently exists, and that’s going to be a tough squeeze for some people.”
Left Brain, Right Brain
Still, there’s clearly an opportunity for smart and focused ad tech companies to make inroads with political campaigns, whether directly with the campaign teams or indirectly through the fundraising committees known as super PACs. But it’s crucial to understand the distinct needs of political campaigns and the sharp differences between GOP and Dem organizations.
“There are nonpolitical organizations that have a place in the space, but their success will be based on who can match their offering to the specific frames that a campaign is looking or,” said Lubin. He’s seen too many companies that tout their “cool, market-leading tech” but don’t understand that campaigns are driven by structurally different forces (like fundraising, persuasion, get-out-the-vote drives and organizing volunteers).
A key difference is in the relative centralization of the party machines. As a general rule, Democrats see more resources go through the candidate’s campaign, while Republicans get more support from super PACs.
As a result, super PAC money is a bigger deal on the right. For example, in the 2012 election, conservative PACs outspent liberal PACs by roughly $211 million, while the Obama campaign spent $207 million more than the Romney campaign.
The fact that Democrats have a more centralized organization and more resources coming through the actual campaigns (primarily Hillary Clinton’s campaign) means there is a more highly developed tech pool within the political organization.
This can be partly chalked up to the advantage of liberal incumbency, though the crowded GOP field plays a role as well.
“[Democrats] spend less defending and attacking each other,” said Moffatt. “The realities of resource allocation mean less goes to building staff,” which he described as Clinton’s single biggest advantage over the Republican field.
Additionally, how political spenders tap outside tech is notably different.
The Democratic National Committee infrastructure that’s been in place since Obama’s 2008 campaign is still largely intact. The RNC has experienced less continuity.
“Data and optimization was a pillar of the Obama campaign, and that’s been baked into the whole organizational structure on the Democratic side,” said Lubin.
Conservatives are, well, more conservative. Moffatt must fight an ongoing battle to strip budgets from TV (though digital marketers on the left are also trying to wean campaigns from their generations-long addiction to TV, direct mail and radio).
They are assisted by a growing number of case studies showing how an over-reliance on legacy channels can backfire. Moffatt cites House Majority Leader Eric Cantor‘s 2014 Election Day loss to a relatively unknown competitor, considered by many to be the biggest upset in congressional history.
“It isn’t the answer the market wants to hear right now,” said Moffatt, “but campaigns and political groups still haven’t fully embraced digital media. They’ll use DoubleClick, Facebook, platforms they can’t do without, but others are going to have to find new ways to demonstrate ROI.”
