Obama Ahead of the Online Advertising Curve

I caught an interesting article by Matthew Mosk in the Washington Post today discussing Barack Obama’s success at fundraising online during this Presidential primary season. His campaign’s success at attracting online donations is likely a function of several factors, including the general enthusiasm for his candidacy and the demographics of his supporters, many of whom are younger and more tech-savvy. But the article focuses on another key factor, which is that his campaign has been very adept at understanding and using the online channel in a way that hasn’t really been done in the past.

In a lot of ways, political campaigns are like traditional advertisers. They have an inherent aversion to risk and are therefore reluctant to try out new tactics, relying – perhaps too heavily – on strategies that they’re comfortable with. The irony of this approach, however, is that the campaigns that challenge the status quo and understand the dynamics of the changing landscape are usually the ones that perform better than expected. Before anyone had any idea that the Internet could be used effectively as a political tool, Howard Dean rode it to his unlikely frontrunner status for a good portion of the 2004 Democratic primary campaign. And we see similar examples in the business world of companies who start doing things differently, in ways everyone said couldn’t be done, that suddenly emerge as top dogs. Google, of course, comes to mind.

Perhaps because of these similarities, Barack Obama has drawn comparisons to companies like Google and Apple – a reflection of his brand and a newer, more cutting-edge approach to politics and campaigning. Both anecdotally and empirically, I’ve seen abundant evidence that this is the case with respect to his campaign’s online efforts.

The Post article said that the Obama campaign spent $2.6 million in online advertising in February, more than Hillary Clinton by a factor of 10. In January, he spent about $768,000, still outpacing Clinton by a factor of 4. I decided to do a little digging in our Ad Metrix advertiser data to see what it showed, and not surprisingly the Obama campaign was way out front in his online advertising efforts, serving about 58 million display ads in January.

And Clinton? Her display advertising efforts didn’t even register above our minimum reporting threshold, indicating display ads are an immaterial part of her advertising strategy. What a lost opportunity for her campaign!

We’ve conducted several studies that have demonstrated the powerful brand-building impact of online display ads, and the Obama campaign seems to understand that. Here’s a look at their most-served ads in January.

What’s interesting is that each of the top ads being delivered includes an invitation to “Join Us,” which has probably been a very effective tool in building a broad email and potential donor base. That the vast majority of his ads (nearly 80%) ran on Yahoo! Sites and Microsoft Sites, both of which skew towards older than average age segments, is an indication that his campaign is using the Internet as a vehicle to reach out to new voter segments rather than going after the low-hanging fruit of young voters.

So it’s no wonder that Obama has been able to raise nearly $100 million during the first two months of 2008 alone tapping a large base of small dollar donors online rather than the more traditional model of prying large donations from a small base of wealthy donors. It’s also why the Obama campaign will serve as the model for how all future political fundraising efforts are conducted and why the Internet will be central to those strategies.