Online political spending – while still trailing far behind the budgets assigned to TV – is poised to match or exceed even the world’s largest brand advertisers.
But with no established agency or ad tech model in place, agnostic tech providers are looking to blaze new trails in the hypercompetitive DC market.
Rubicon Project and Rocket Fuel each launched dedicated Washington, DC, offices in July, following in the footsteps of Collective and other companies with teams explicitly aimed at political business development.
And for anyone who thinks the layers of vendors that exist between brands and digital exchanges is convoluted, that’s nothing compared to the “very complicated, incestuous world” of political spenders, according to JC Medici, Rocket Fuel’s national director of politics and advocacy.
Other leaders in the emerging politics and advocacy space echo those sentiments, citing the influence of entrenched political powers – which DC reporters aptly dub “the establishment” – and a consulting agency model that does not mirror its private-sector counterpart.
Illustrating the “incestuous” partisan model is the narrow field of ad tech execs that service campaigns and super PACs. Medici, for example, came to Rocket Fuel from Collective, while Theresa Mueller, Rubicon’s recently poached director of politics and advocacy, hails from Rocket Fuel.
Essentially all business comes indirectly from campaigns and super PACs via consultancies formed around partisan affiliation, Mueller and others said. Campaigns are not interested in working directly with a buying strategist who doesn’t share their political goals, and though this model means smaller margins and less transparency, it’s a system that’s unlikely to change any time soon.
To win a Nike account, an agency must be excited about selling Nike products, said Millennial Media sales SVP Alia Lamborghini.
“I’d venture to say [political media strategists are] more passionate than any other advertising market in the country,” said Lamborghini, acknowledging the difficulty surrounding the prospects of politically independent ad agencies gaining a toehold in that space.
“[Partisan] digital agencies do a lot more than just buy media,” said Peter Pasi, a GOP digital consultant and VP at Collective.
Unlike in the digital advertising market, where exchange players such as AppNexus, Rubicon and Rocket Fuel actively work to absorb the responsibilities and budgets of agencies and vendors, the digital political advisers represent a crucial middleman for the tech companies.
Political campaigns, which have engineering talent and resources that wax and wane, aren’t equipped to maintain, let alone continually refine, a massive ad tech infrastructure that some estimate can cost a company up to $25 million a year, Pasi said. Instead, what the ad tech ecosystem needs from political spenders is access to business, which “can only be accomplished by people they know and trust as political advisers.”
Semcasting CEO Ray Kingman agreed, saying most people making media decisions for campaigns “are so far away from the digital world you can barely see them.” The layer of partisan digital specialists gives agnostic tech providers “a seat at the table” with spenders who will simply never open up to companies that aren’t political allies.
The informal system taking shape now is mutually beneficial. Liberal or conservative digital networks “bring [a] digital strategy and mentality up the chain” at campaigns, Mueller said, while tech platforms are perfectly content quietly assuming the role of outsourced service.
The idea of having digitally savvy consultants who can access what Medici calls the “intentionally insular” campaigns and PACs may seem like just another hurdle, but it’s actually a significant step forward for the ad tech field. The consensus from researchers and executives involved in political media buying is that the amount of dollars spent on digital leading up to the 2016 elections will be roughly on par with the amount spent on robocalls.
Building market share is “a constant uphill battle,” said Medici, who requires insider support “in order to gain any traction.”
Pasi said “there are tools we can provide” to support the partisan representatives of a campaign, typically attribution and cross-device technology.
The heavily siloed political world has long had vendors that specialized in direct mail or phone calls or TV placements, but “have never put resources into convergence,” Kingman said. Just as ad tech vendors have seized on cross-device to drive brand marketing, Semcasting and other companies see the ability to connect channels as a way to grow overall spending.
Millennial Media pitches itself to potential political clients on its ability to “extend TV buys” through sequential targeting on mobile and social, Lamborghini said.
Pasi noted that since TV buys are made public, an opportunity has emerged for “competitive conquesting,” where a politician or super PAC targets digital campaigns around a rival’s TV buy in order to either diminish the effect or “steal the spotlight.”
The practice isn’t unheard of in the private sector, but digital players can repurpose new strategies that emphasize mobile, social and desktop over direct mail, radio and telemarketing, which combine to almost triple the amount DC spends on digital.
