A recent story from the world of politics is a great illustration of the need for martech expertise. Although this is about one party, I’m going to refer to them as Party Y because the lesson is universal.
Early last year Sen. John Doe was picked to head the campaign arm of Party Y’s National Senatorial Campaign. Sen. Doe, who was a businessman before getting elected, believed Party Y needed to overhaul how it raised money online and get more from smaller donors.
So he brought in a whole new digital team and started spending a lot on digital advertising.
Also, they retooled the ads. Instead of product (candidate) ads, they ran brand ads designed to connect with the target audience on an emotional level.
Did it work? Yes, but no.
The committee broke all sorts of fundraising records. As of July the committee had raised a record $181.5 million dollars. Sen. Doe began talking about “historic investments in digital fund-raising that are already paying dividends.” While no one would ever call Sen. Doe modest – few politicians are – the amount raised definitely justified a boast or two.
However, as we all know, income isn’t everything. Outlays matter. In this case, the committee spent 95% of what it raised, most of it long before when it would do the most good. At the start of August the committee had $23.2 million on hand. That’s less than half of what the same committee for the opposing party had.
Where did it go? A lot went into efforts that failed every conceivable ROI test.
From June of last year to July 2022, the committee spent $23.3 million going after smaller donors. This is the business equivalent of selling a low-margin product. Success depends on selling a lot of it. In this case the committee “sold” very little, raising only $6.1 million from the target audience.
Any self-respecting marketing team would have done better demographic research on this consumer segment. They would have understood how much they were likely to donate and that would have determined the marketing spend. Also, they would have run a pilot program to find out if their approach would produce a better yield.
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Also, for several months in 2021, a non-election year, the committee bought ads on Google and Facebook at levels comparable to the feverish final days of 2020. They did this hoping it would get them contact data for potential donors who could then give repeatedly over the coming months.
An experienced marketer could have told them there are far less expensive ways to get customer data. For the amount spent they could have bought the data and a system with some top-notch analytics. And the marketer they should have hired also could have prevented their next mistake.
To wit: Using marketing tactics that make it unlikely these people will want to give again – ever. Texts were sent out asking “Should [office holder] resign?” – followed by a request for cash. A yes reply automatically processed a payment.
How unpopular was this? Demands for refunds went from less than $2 million in 2020 to more than $8 million this year.
Don’t alienate loyal customers seems self-evident to those of us in the field. Clearly there are “civilians” in politics who don’t get it.
There’s good news for Party Y, though.
In business terms, they have multiple revenue streams. There are many other fund-raising efforts both inside and outside the party. So far there is no sign Sen. Doe’s mistakes are harming their work or the brand as a whole.
That’s probably because those other efforts take advice from marketing.
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