Corporations Want Obama's Winning FormulaBy
The day after the election, Mitt Romney returned to his Boston headquarters because, he told a friend, his campaign staff needed help: “I have 400 people to get great jobs for.” President Obama’s team, having built a tech-centric juggernaut that outperformed expectations, will need no such assistance. “The next morning,” Jim Messina, his campaign manager, says, “corporate America, Silicon Valley were knocking down the door trying to hire these guys.”
It’s easy to see why. With the economy struggling and Obama no longer a tribune of hope and change, the press narrative of the campaign was that Democrats had cooled on the president and might not turn out to reelect him. “Instead,” says Teddy Goff, digital director of Obama for America, “if you look at the numbers, we raised more money online this time than last time, had more donors, more volunteers, registered more people to vote online, and did all kinds of revolutionary stuff through Facebook and Twitter.” The campaign says donors increased from 3.95 million to 4.4 million, fundraising online rose from $500 million to $690 million, and online voter registration jumped by 50 percent. Once all the votes are counted, about 1.25 million more young people will have supported Obama in 2012 than in 2008, when his ability to turn out 18- to 24-year-olds was hailed as revolutionary. As the final tally approaches, Obama’s margin of victory is more than 4 million votes and rising.
Were Obama’s weaknesses exaggerated? Or was his campaign so ruthlessly effective that it overcame them? Judging from the run on talent—Obama’s team won’t say which companies have come calling—many in the private sector think it was the latter. “This is seen as the best-run campaign ever,” says Google Executive Chairman Eric Schmidt, an informal campaign adviser. “And there’s a lot of carry-over from political tactics to business tactics.” In particular, the technological and data-analytics advances that drove the reelection effort could have significant commercial applications.
One of the Obama team’s first principles was its belief that social media have suffused the culture to a point that it can serve as a primary platform to raise money and reach voters. Sometimes this entailed applying marketing techniques to politics, such as Messina’s widely ridiculed decision to take Vogue Editor-in-Chief Anna Wintour’s advice and create an Obama fashion line to raise money. “That ended up bringing in just north of $40 million,” Messina says.
More often, the campaign developed its own methods. Last year the tech team noticed that while a quarter of the clicks on its fundraising e-mails were from mobile devices, only a handful yielded donations—a common problem for political campaigns. That led to a pair of innovations: a redesign that allowed the website to render easily on any screen and a “quick-donate” program that stored financial information so repeat givers could pay with a single click.
This became hugely profitable. According to data shared exclusively with Bloomberg Businessweek, “one-click” donors gave four times as often—and three times as much money—as those solicited the traditional way. The 1.5 million one-click donors gave $115 million, or about $75 million more than tests indicated they would have otherwise. Many of the donations came via phone. “We’d send texts saying ‘Reply back with a number and that’s how much we’ll charge your saved account,’ ” says Goff. “We had people giving $1,000 via text.”
An even more significant achievement was the collation of vast amounts of data used to motivate voters. “The biggest idea we brought to bear was integrating data and then acting on what it told us,” says Dan Wagner, who ran the analytics team. “Through the single database we built, we could tie everything together and make an assessment based on all of somebody’s online activities, whether or not what we were doing was actually producing offline outcomes.”
This powered the “targeted-sharing” program that Messina and others believe was the true innovation that helped drive such surprisingly high turnout. The campaign’s Orwellian knowledge of the electorate—its deep understanding of precisely what, or whom, would motivate someone to act on Obama’s behalf—was such that it could get supporters to appeal to wavering or unreliable friends and acquaintances with individually tailored messages. “Politics is a direct-response business,” Goff says. “People do things if you ask them to do it, and for the most part don’t do it if you don’t ask.”
Often these requests were made through Facebook, mobile, or another online medium, which made it particularly effective for contacting young voters. “Of our turnout targets 29-and-under, half couldn’t be reached by phone, either because they didn’t have one or we didn’t have their number,” Goff says. “Yet we were able to reach 85 percent of them through targeted sharing. Almost everyone is on Facebook.” He estimates that 5 million voters were contacted this way—more than Obama’s margin of victory. “All of these things are characteristic of the way the next generation of social and mobile apps are going to evolve,” says Schmidt.
What first excited marketers about social media was that a friend’s endorsement was a more powerful, and therefore valuable, motivator than traditional forms of advertising—seeing someone you know rave about Pepsi on his Facebook wall makes you more likely to try it than a newspaper ad would. What businesses find so tantalizing about the Obama campaign is that it has advanced this phenomenon to its next iteration: Your friend isn’t just raving about Pepsi; he’s telling you, in language and images likely to resonate with you, that you should be drinking Pepsi, too. “The fundamental building block to targeted sharing is an overlay of the voter file and the social graph,” says Goff. “If you apply that same concept—the social graph and consumer data—then almost any company stands to gain something.”
Of course, few people would feel moved to take action for Pepsi in the same way they did for Obama. Unless, that is, the civic purpose that impelled Obama’s supporters could be synthesized by businesses selling products instead of candidates, possibly through games or rewards programs that give users an incentive to evangelize to their friends. “This offers real opportunities for people to interact with their networks within the context of a brand,” says Joe Rospars, Obama’s chief digital strategist, whose company, Blue State Digital, runs social media campaigns for companies including Ford and the Green Bay Packers.
Those intrigued by the commercial possibilities for what the campaign pioneered include Google’s Schmidt, who is considering hiring or funding members of the team. “I’ve talked about it,” he says. “We haven’t done anything yet, but we’ll see.” It could take a while. Having worked nonstop for 18 months, most of Obama’s staff is celebrating by going on vacation.