Political Tech Firms Eye Commercial Market In Pursuit Of Stable Budgets

poltechimgA growing number of political ad tech and data analytics companies are pitching their services to brands and agencies.

It’s been a challenging election cycle for political technology firms, which have been fending off agnostic companies that see tech as fundamentally more important than partisan affiliation. These newcomers have successfully pried open budgets that were once off the table for anyone but party loyalists.

For instance, the Republican National Committee committed $150 million in May to digital video inventory reservations and spent most of it directly with Google and Facebook. Most of the rest went to nonpartisan firms.

Now brand accounts, which don’t face the cyclical drop-offs of campaigns and super PACs, have become an object of desire for many political firms.

The liberal digital agency Bully Pulpit Interactive (BPI) acquired the strategic communications firm Incite last week with plans to up its commercial-sector business. Incite co-founders Ben LaBolt and Robert Gibbs and BPI founder Andrew Bleeker are all top Obama campaign vets, but Incite has focused on brand reputation management while BPI maintained its direct political business. 

“Both companies come from politics at the highest levels, and both are based on how we apply the lessons of politics to brands,” Bleeker said. “That’s where we think a lot of our future lies.”

Another firm interested in commercial work is SCL Group, a London-based shop that has worked exclusively on political, governmental and issue-oriented campaigns for almost 30 years. The company plans to apply its data and infrastructure in the commercial sector via Cambridge Analytica, SCL’s North American subsidiary.

Cambridge Analytica hired Duke Perrucci as chief revenue officer four months ago to develop brand inroads before the company makes a wholesale pivot.

“After this election, it’ll be full-tilt into the commercial business,” Perrucci said.

Unique Skillsets

Political experience can be valuable for businesses “looking for societal change or something more issue-campaign-oriented to improve their image,” said LaBolt, who is now a partner at BPI.

Like candidates, brands require integrated communications that address “the pace of change for news and information, with the expertise in targeting and analytics that we get with Bully Pulpit, and the shared recognition that the walls between earned and owned media have broken down,” LaBolt said.

Political ad agencies are also better at executing sequential, optimized campaigns, said Bleeker.

Political campaigns turn out topical content, mostly digital video, and then spend to promote it, making political firms equipped to run through research, strategic communications, creative production and media buying at the pace of the news cycle.

Cambridge Analytica’s political clients, who have included Ted Cruz and Donald Trump, for example, get analytics and audience segmentation from the firm’s DC office. An SCL production team then creates the content and Cambridge does the media buy.

Perrucci said this compression of research, ideation, content creation and ad buying is old hat for political vendors but practically nonexistent on the brand side, where these skills often fall into the “programmatic creative” or “dynamic content optimization” categories.

Barriers To Entry

Political tech has made its way to the brand market before, usually backed by strong organizational support. Not coincidentally, BPI just took a round of funding from Svoboda Capital Partners, a private equity firm with a mar tech portfolio.

WPP has been an aggressive collector of political technology, particularly liberal firms. Hillary Clinton works with Blue State Digital and Benenson Strategy Group, according to FEC filings, both of which were founded by Obama campaign vets before being acquired by WPP. WPP also bought Glover Park Group, Svoboda’s only other political marketing investment, in 2011.

Outside of a holding company like WPP, which has a public-sector group that works with public or private corporations and political clients around the world, there aren’t many case studies or public examples of a political-first business working with a brand client.

Deep Root Analytics, a Republican data analytics agency, worked with HBO on a campaign in 2015. But looking for brand marketing accounts publicly held by political tech firms is somewhat like chasing rainbows.

“Other than leveraging voter data and creating specific audience segments it is very difficult for a political agency to talk about their experience and why they would be better equipped to run a brand campaign,” said JC Medici, Rocket Fuel’s national director of politics and advocacy.

“Almost all political campaigns stick to the digital basics when it comes to the types of media, strategy and execution [they run],” Medici said. “With little room for experimentation, it is difficult for a political agency to show what they have done or what they will do differently other than using data and winning an election.”

A commercial pivot could also create new areas of conflict, such as working for an environmental PAC while representing an energy company, said Jim Walsh, co-founder and CEO at the liberal ad tech firm DSPolitical, which has no plans to branch out of its political and advocacy business. The shift could also undercut the preciously guarded “DC insider” status that elevates political media operatives.

“If they’re selling the market applications of their political expertise, then the political side really should remain a focus,” Walsh said.

Still, it’s a tempting lure for “political firms that grew up at a time when the private market spent a much larger share of advertising on digital compared to politics,” Walsh conceded.

“I see it as an optimistic sign for long-term growth of political digital spending,” he said, “but you can understand why brand business is a compelling draw.”

 

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