Big Data Leading to Big Business for Political Shops Entering Consumer Marketing

Speed, Analytic Skills of Digital Agencies Attract Attention -- and Budgets -- From Brands

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Will the builders of Brand Romney find themselves in demand on Madison Avenue after Election Day?

While the answer likely depends on whether their candidate wins the presidency, the sea change in marketing brought about by social media has undeniably made the core competencies of political agencies -- speed and nimbleness -- more alluring to brands. Now that brands are trying to execute an "always on" digital strategy to better engage with their consumers, while also avoiding being caught asleep at the wheel when a crisis unfolds, political agencies have a loftier position from which to pitch their business.

Blue State Digital Managing Partner Thomas Gensemer
Blue State Digital Managing Partner Thomas Gensemer
Campaigns "are the ultimate beta testers," said Mitt Romney's digital director, Zac Moffatt, who pointed to major executions connected to breaking news events -- like Wisconsin Rep. Paul Ryan's selection to be Mr. Romney's running mate -- as the sort of work a Fortune 100 brand's digital team couldn't do.

While historical precedent says that the political and brand ad worlds are likely to remain distant cousins (especially since political shops are typically light on infrastructure, due to the boom-and-bust cyclical nature of their work), there's some evidence to suggest that a paradigm shift could be under way.

Take Blue State Digital, the agency that made its name through its work on the first Obama campaign and widely cited as the backbone of the campaign's hugely successful digital grassroots organizing and fundraising strategy. The shop was acquired by WPP in late 2010 and has substantially diversified its client roster, taking on "blended" assignments from brands such as Ford and Godiva that also work with other WPP digital shops.

Blue state to blue chip
Roughly a third of Blue State Digital's business now comes from brands, 50% comes from museums, universities, hospitals and nonprofits, and a little less than 15% is derived from political campaigns, according to managing partner Thomas Gensemer. In 2008, political work was as much as 65% of the business, Mr. Gensemer noted, characterizing the agency as a "big data shop, from a CRM perspective."

And while the Obama re-election campaign continues to use its tools for email marketing, social-media publishing and online fundraising, Blue State Digital seems to be distancing itself from its affiliation with the current American president. (More recently it's worked on presidential pushes for Brazil's Dilma Rousseff, France's Francois Hollande, and Mexico's Enrique Pena Nieto.)

"We're always going to be known for and proud of our political work, certainly as it's gotten more and more global," said Mr. Gensemer. "We've worked to really apply the learnings of campaigns to bigger brand challenges."

By all accounts, the greatest digital challenges of this current election cycle is in the realm of data (as was the case in 2008), with campaigns targeting prospective voters and donors on the web in increasingly sophisticated ways.

The AP reported last month that the Romney campaign had tapped the Texas-based analytics firm Buxton Co. -- which works almost entirely with brands -- to conduct data mining to identify new potential donors who are likely to be affluent. And then there's the Steve Case and Ted Leonsis-backed startup Resonate, which specializes in ad targeting based on personal values and got off the ground working with political campaigns such as Scott Brown's 2010 run for Senate in Massachusetts. Now it's courting brand business and working with Coca-Cola, McDonald's and Walmart.

The mounting obsession with data on points to another area of competency that political agencies may be able to pitch after the elections.

More acquisitions
"The [political] online advertising happening right now is in many ways as sophisticated as anything in the brand world," said Tim Schigel, a digital strategist for the Republican National Committee and founder of the social-sharing and data company ShareThis.

He said he expects to see more acquisitions of boutique political digital shops such as Blue State by larger, nonpolitical agencies.

What about the reverse scenario of digital shops starting to get an in with campaigns?  It is noteworthy that Rockfish Interactive was tapped to build the "Mitt's VP" app, which the Romney campaign commissioned to be the official channel informing the public of Mr. Ryan's selection.

But several political digital strategists -- including Mr. Moffatt -- say that assignment was an anomaly and that such tactics will remain confined to national campaigns that are flush with cash, since apps aren't a necessity for congressional and statewide candidates.

"For the presidential races and these huge super PACs, there will be some need for more extensive technology that political shops can't facilitate," said Vincent Harris, a Republican digital strategist working with GOP Senate hopefuls Linda McMahon of Connecticut and Ted Cruz of Texas. Mr. Harris also noted that until now super PACs appeared to funnel their money mainly into TV ad buys. "But I think until mobile usage really grows beyond what it is now, you're not going to see campaigns outside of Obama and Romney use it," he said.

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