Home Politics Rocket Fuel’s Political Gambit: A Cautionary Tale for Ad Tech

Rocket Fuel’s Political Gambit: A Cautionary Tale for Ad Tech

SHARE:

rocketfuelposteleximgAd tech companies flocked to Washington, DC, during the recent election cycle in pursuit of political ad budgets, but many were disappointed.

Rocket Fuel was the most aggressive newcomer, adding approximately 15 people to its DC office for political business development beginning last summer. But the company dismissed most of those hires in the week following the election. Rocket Fuel confirmed the downsizing to AdExchanger, attributing it to the natural fluctuation of electoral cycles.

In Rocket Fuel’s quarterly earnings call last month, CEO Randy Wootton said the company lowered guidance for the year “primarily due to political and international coming in lower than expected.” According to sources, the company also struggled to wring profitability out of DC’s byzantine network of consultants and middlemen.

“There is a 0% chance that many resources are dedicated to political again,” said one source with knowledge of the company’s political strategy who wasn’t authorized to speak publicly about internal discussions. “More likely you’ll see one or two people parachute in for the election.”

Rocket Fuel’s success landing political partnerships – and it did have success there – turned out to be both a blessing and a curse.

On the conservative side, it tied up with The Data Trust, a conservative voter targeting solution offered by the Republican National Committee, and National Media, one of the oldest and largest Republican media agencies.

But central Republican Party groups spent most of their digital budgets in direct deals with platforms like Facebook and Google and with digital video networks.

Rocket Fuel also worked with Cambridge Analytica as the DMP for the Trump campaign, but sources with knowledge of the agreement said Rocket Fuel was not involved in the relatively lucrative performance marketing aspects of digital campaigning (i.e., fundraising) and was just one of dozens of inventory sources.

On the left, it partnered with both the Democratic National Committee and TargetSmart. But liberal groups tend to spend more (of their non-Facebook and non-Google media) with an ecosystem of partisan vendors.

Beltway Blues

Rocket Fuel was just one among many ad tech companies to make a bet on politics.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

The last year saw “a kind of gold rush to DC,” said Grace Briscoe, Centro’s VP of candidates and causes. “A lot of people clearly said, ‘Let’s assign somebody to political or hire somebody in market and get our piece of this spigot of money.’”

Centro opened a DC office in 2010 and has 20-plus people working on firewalled conservative or liberal teams – an unusually large and longstanding team. For most commercial ad tech, this election was the first foray into politics.

Quantcast made a deliberate move on political budgets along the lines of the “parachute-in” strategy, hiring two specialist sellers from the political world, one each to win business from Republican and Democratic sources, and shifting some brand support teams to political clients.

Now, the bulk of people in its DC office and those who were involved in campaign work will move back to brand business, while the company plans to retain its two direct political sellers during the offseason.

“In terms of being able to understand the power and impact of advertising in politics … the biggest takeaway this year is to be humble about what’s possible,” said Jag Duggal, Quantcast’s senior VP of product and strategy.

Political newcomers made the mistake of setting revenue projections against overly optimistic spending forecasts, said Jordan Lieberman, politics and public affairs lead at the targeting firm Audience Partners.

Borrell Associates originally projected digital political spending to be around $1.1 billion, but revised its final estimate to less than $1 billion.

“They didn’t anticipate how much of that money was already spoken for through existing relationships and players like Google and Facebook,” he said.

Lieberman anticipates more downsizing in early 2017, referencing a string of nonpartisan tech layoffs since the election – mostly from Rocket Fuel – as well as major downsizing at former Republican programmatic juggernaut Targeted Victory.

“I knew most commercial tech that made a run at political dollars would fail to hit their numbers,” he said, “but I didn’t think things would blow up this fast.”

 

Must Read

Comic: TFW Disney+ Goes AVOD

Disney Expands Its Audience Graph And Clean Room Tech Beyond The US

Disney expands its audience graph and clean room tech to Latin America, marking the first time it will be available outside the US. The announcement precedes this week’s launch of Disney+ with ads in Latin America.

Advertible Makes Its Case To SSPs For Running Native Channel Extensions

Companies like TripleLift that created the programmatic native category are now in their awkward tween years. Cue Advertible, a “native-as-a-service” programmatic vendor, as put by co-founder and CEO Tom Anderson.

Mozilla acquires Anonym

Mozilla Acquires Anonym, A Privacy Tech Startup Founded By Two Top Former Meta Execs

Two years after leaving Meta to launch their own privacy-focused ad measurement startup in 2022, Graham Mudd and Brad Smallwood have sold their company to Mozilla.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.