Obama’s data advantage

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By: Lois Romano
June 9, 2012 07:01 AM EDT
CHICAGO — On   the sixth floor of a sleek office building here, more than 150 techies are   quietly peeling back the layers of your life. They know what you read and   where you shop, what kind of work you do and who you count as friends. They   also know who your mother voted for in the last election.The depth and   breadth of the Obama   campaign’s 2012 digital operation — from data mining to online organizing —   reaches so far beyond anything politics has ever seen, experts maintain, that   it could impact the outcome of a close presidential election. It makes the   president’s much-heralded 2008 social media juggernaut — which raised half   billion dollars and revolutionized politics — look like cavemen with stone   tablets.

Mitt Romney indeed   is ramping up his digital effort after a debilitating primary and, for sure,   the notion that Democrats have a monopoly on cutting edge technology no   longer holds water.

(Also on POLITICO: White House   tech gurus unveil digital road map)

But it’s also   not at all clear that Romney can come close to achieving the same level of   technological sophistication and reach as his opponent. (The campaign was   mercilessly ridiculed last month when it rolled out a new App misspelling America.)

“It’s all about   the data this year and Obama has that. When a race is as close as this one   promises to be, any small advantage could absolutely make the difference,”   says Andrew Rasiej, a technology strategist and publisher of TechPresident.   “More and more accurate data means more insight, more money, more message   distribution, and more votes.”

Adds Nicco   Mele, a Harvard professor and social media guru: “The fabric of our public   and political space is shifting. If the Obama campaign can combine its data   efforts with the way people now live their lives online, a new kind of   political engagement — and political persuasion — is possible.”

Launched two   weeks ago, Obama’s newest innovation is the much anticipated   “Dashboard,” a sophisticated and highly interactive platform that gives   supporters a blueprint for organizing, and communicating with each other and   the campaign.

(PHOTOS:   Technology and the Obama campaign)

In addition, by   harnessing the growing power of Facebook   and other online sources, the campaign is building what some see as an   unprecedented data base to develop highly specific profiles of potential   voters. This allows the campaign to tailor messages directly to them —   depending on factors such as socio-economic level, age and interests.

The data also   allows the campaign to micro-target a range of dollar solicitations online   depending on the recipient. In 2008, the campaign was the first to maximize   online giving — raising hundreds of millions of dollars from small donors.   This time, they are constantly experimenting and testing to expand the donor   base.

For   example, they have found $3 to be a magic number: Asking supporters for that   paltry donation to win a chance to attend a fundraiser with the president and   George Clooney or Sarah Jessica Parker, has generated tens of thousands of   responses — people from whom the campaign can collect highly valuable data   and then go back to.

“They are way   ahead of Romney micro-targeting and it’s a level of precision we haven’t seen   before,” says Darrell M. West, a leading scholar on technology innovation at   the Brookings Institution. “[The Obama campaign has] been able to work on it   under the radar during the Republican primary season.”

Obama already   this year has outspent Romney significantly (and outspent his own 2008   levels) for online advertising, according to several market analyses the   numbers. The hope for the Obama team, says West, “is that his online reach   will outweigh any Superpac funding advantage Romney might have for television   advertising, by reaching deep into communities with targeted online   advertising, grass-roots organizing and fundraising.”

The other hope,   of course, is that Obama can replicate some of the online excitement that   propelled him into office four years ago.

Romney campaign   officials acknowledge that they have had neither the time, nor the resources   to build a complex digital operation as they were fighting their way through   the prolonged primary season. “It wasn’t something we were going to put   resources into if he wasn’t the nominee,” said one adviser.

It is also   apparent that the Romney campaign will stick closely to the traditional   campaign model of heavy and expensive television spending — with the assist   of wealthy conservative super PACs that have signaled a willingness to spend   hundreds of millions of dollars to defeat Obama.

While the   campaign is beginning to increase staff in preparation for the general election,   Romney digital director Zac Moffatt says they will do things differently than   the Obama operation. For one, Moffatt says the Romney campaign will outsource   much of their data management — instead of handling it in house, creating   “customized solutions” to fit their needs.

“As a campaign   we would not presume to know more than the collective intelligence and   resources of the marketplace,” said Moffatt, who adds that they will target   audience through “our partnership with an industry-leading data management   platform.”

“In the end,   what is most important is not how many people on any list or how many   followers we have — but their engagement level. And our followers are   engaged,” Moffitt said.

Harvard’s Mele,   who at age 25 helped pioneer the use of social media technology on Howard   Dean’s 2004 presidential campaign, said that even with some obvious attrition   to Obama’s 2008 database, Romney is trailing.

“I’m   not going to say he can’t catch up because with enough money and intensity,   it may be doable — but it seems very unlikely to me,” said Mele. “(Obama)   used the powerful narrative of his 2008 campaign to build a digital   infrastructure that remains formidable, both in terms of data and sheer   know-how and expertise.”

The challenge   facing both campaigns in 2012 is the changing consumer — and the endless ways   they receive information. Four years ago, supporters might have been   satisfied with just “friending” a candidate on Facebook, but today most users   expect a more sophisticated way to actually engage –and on their terms.

While Obama   campaign officials guard details about its digital operation as fiercely as   Romney guards his tax returns, they were willing to share some advances since   2008:

• Created a   holistic, totally in-house digital operation that is the largest department   at campaign headquarters. In 2008, much of the social media and video was   generated organically from supporters. As one campaign official put it,   “digital is no longer a part of the campaign. It is the campaign.”

• Hired a   number of nonpolitical tech innovators, software engineers and statisticians.   “It has been incredibly freeing, because all election campaigns are a slave   to history, and the history here is just nonexistent,” says Obama campaign   manager Jim Messina. “So, we’ve been able to kind of reinvent it.”

• Invested   mightily in cutting-edge technology that scales the website to fit the screen   of any device. With nearly half of the U.S. population using smart phones,   “responsive design” allows a user to give money and volunteer without   bifocals. “More than 40 percent of all our donors are new, and a lot of them   are coming in because of things like this,” says Messina. “Call up our   website and try to donate on your phone and then do Romney’s. … Those things   are important, because people are busy and people want to help us and they   think about — ‘Oh, yeah, I saw the president on TV. I want to give them   money. How hard is it?’ ”

• Developed a   more complex symbiosis between the campaign and Facebook, which is 10 times   bigger than it was four years go, and has far more personal information   available to mine. “Facebook was just a site to see friends four year ago now   it is part of people’s DNA,” notes a senior campaign adviser. Obama invites   supporters to log on to the campaign through their Facebook accounts, which   gives the campaign one more avenue for data.

• Opened the   first all-volunteer. all-digital office in San Francisco where knowledgeable   techies drop in for a few hours and strive to develop new software for the   campaign under the supervision of paid staff.

• Staffed a   full-time digital director in each of about a dozen battleground states to   effectively run mini-general election campaigns in those states.

“Last   time, we had two campaigns,” Messina said. “We had the on-the-ground, door-knocking,   person-to-person campaign, and then we had the digital campaign. But most of   the digital campaign was really organized by [supporters] — by themselves.”

This time, says   Messina, it’s the campaign that’s driving and controlling most digital content.   “The goal is to burst through the wall of those two things.”

Twitter was   just gaining steam in 2008 when campaign used the platform largely to notify   followers about events. The campaign had 118, 000 followers at election time   and about 2.4 million Facebook followers.

Today, Obama   has 16 million Twitter followers to Romney’s 500,000, and Michelle Obama has   nearly 1 million to Ann Romney’s 45,000. On Facebook, Obama has nearly 27   million followers to Romney’s 1.8 million. (It’s hard to know how many of either   man’s followers are non-American.)

“We are   building content to a variety of different channels, because what has really   changed is the channels are different, and so some people are going to get   all of their stuff through Facebook, some people now do Twitter, some people   are going to go directly to our website, some people like it on email, some   people like it on text,” Messina said.

Less certain   for Obama is whether his vast digital empire can recreate the movement and   excitement of 2008. Messina makes it clear that some tried-and-true methods   still apply. “It’s even more important this time than last time to run a real   grass-roots campaign that’s built on turning out our voters, persuading   undecided voters and making sure they’ll vote on Election Day,” he says, “and   that is the kind of the organizing we’re doing.”

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From Search to Video to Mobile (and More), a 2013 Product Road Map For Facebook

Published: June 08, 2012

I’m a big fan of Facebook and would love to see them successful. The stakes are huge. They could be a viable ad platform for everything in online advertising today– an independent alternative to Google’s ad platform, a “must buy” for brands, and an effective direct advertiser performance platform.

So as someone with a vested interest in the future of online advertising, here are some thoughts on how Facebook could make billions through online advertising next year:

The low hanging fruit:

Search Box: Make it real, make it usable, and make it different than Google. Make it easy for advertisers to say “Great, I’ll move 10% of my search budget to Facebook Search.” Focus on product and people search. Search is best and most monetizable when it’s about intent. Ignore the long tail and go for user generated results with a lean towards commerce. Advertisers would line up for both branding and conversion opportunities. How to get there quickly:

  • Turn on Bing sponsored search. Get Bing search      revenue share.
  • Add keywords to targeting API and create Facebook      keyword self serve bidded marketplace. Use Bing for algorithmic index      results only.
  • Build FB algorithmic index. Cancel Bing completely.

Voodoo math: let’s assume Facebook can get just 10% of $20 billion search revenue in 2013: $2 billion.

Video: Facebook should create a channel based on professional and UGC content and curate it so that it resembles cable TV. Seed it with $1 billion. Then make it massively social, interactive, and in some cases, user driven. Think about it – groups of friends watching their “shows” together using a Facebook video collaboration software like Webex. You just turned Facebook into group TV watching. And you can sell tier 1 advertisers and have no distribution costs outside of your own Opex. You can walk into Madison avenue with the agencies and go directly after TV budgets.

  • Make Facebook the new premium content destination      channel
  • Buy Netflix
  • Build “Spotify for video”

Voodoo math: let’s say you can do 10% of the 120 billion YouTube views a month: 12 billion streams / month at a $10 CPM = $1.4 billion.

Clearly define Facebook sales channels: there seems to be some confusion in the marketplace about who exactly is selling what to whom. This could be hurting Facebook because many VARs are holding back on committing resources that could monetize gigantic portions of Facebook unsold inventory. Maybe segment the channels as follows:

  • Facebook Direct Sales: always sell on a CPM, no risk      to clients.
  • VAR Sales: always sell on a CPL, CPC, or CPA – VAR      assumes risk to hit client goal.
  • Carve out a new kind of tier “1.5″      inventory that won’t conflict with the FB sales team and have all the VARs      bid against each other for exclusive/non-exclusive access.

Voodoo math: Let’s assume they carve out and dedicate 10% of their 1 trillion impressions of inventory to VARs that can exclusively resell it in 2013: 100 billion impressions a month at a $1 CPM = $1.2BB a year.

Mobile: a Facebook mobile phone? My guess is this is because Facebook wants to create a direct connection with the end consumer and own the “consumer access point” to reduce the potential for disintermediation. The catch is that Facebook is not a hardware company and doesn’t have an OS-(sorry – being a website to a lot of people to doesn’t count). And of course, Google + IOS are competitors so Facebook doesn’t want to piggyback theirs.

  • Remember ESPN Phone? Remember Disney      phone? Both didn’t work.
  • Instead focus 100% of your resources on having the      most integrated, most data driven, most robust SDK for the Facebook App      Store ever.
  • Have the best partner integration team ever – focus      on providing insane business development, technical support, and integration      into everyone ELSE’s APIs – in other words, be the best PUSH platform      ever.
  • Let your competition fight it out over the last      inch, then drop your FB app on top.

Voodoo Math: If Facebook is willing to pay $1 billion for Instagram, they would probably spend at least a billion with a high likelihood of failure on building the phone. Forget the phone, please. Wait for better alternatives (payments, Facebook credits) to go big for the final inch to the consumer. Cost savings = $1 billion.

A bit more challenging:

Build the biggest retargeting network in the world: Facebook reaches – everyone, basically. And yes, those people actually do visit sites other than Facebook. Facebook could offer their advertisers the ability to target those users again once they’ve left the Facebook properties. This reach extension product would be entirely incremental to their ad business and have no conflict with their direct sales force.

  • Build Facebook retargeting capability into their ad      platform
  • Sell these retargeting impressions (anonymously      aggregated, like others do already) through their exchange

Voodoo math: at 1 trillion impressions a month, Facebook could easily find users elsewhere and generate another 30% retargeting/reach extension impressions. 30% of incremental impressions a month at a .50 cent CPM = $1.8 billion a year.

Facebook Real Time Bidding (FTB!): Build the ability to bid per impression in a real time environment for every impression type. Yes, this is scary because you may spread too few ad dollars across too many impressions collapsing parts of the bid landscape (or the entire thing?). But the entire industry is moving there and you don’t want to
be left behind. And if your direct sales force rocks and your VAR strategy is solid – what’s to worry?

Voodoo math: RTB would increase pricing on tier 2 inventory, improve CTRs/efficiency dramatically, and reduce advertiser waste. Call this move worth $500 million in value?

BIG hacks, big pay day!:

Online GRP: make it insanely easy for a large Consumer Packaged Goods companies to spend billions of dollars on your audience in a single month because they know precisely what kind of online spend maps to a TV GRP. If FB can get this mapping even close to what it actually is – and you’ll probably need feedback loops from the existing TV ratings companies as well as the advertisers themselves, then you can unlock a huge portion of TV budget ready for reallocation. Let’s say you can get 10% of TV ad budget spend for “testing” = $6 billion.

The $1 Billion Digital Upfront: create a high quality channel of premium content that you offer to your advertisers before the content is released. Sell advertising against the content as a first look and guaranteed basis. Forget the upfronts and then newfronts – create the Facefront. For example, almost every major actor and actress has a presence on FB. Organize them through a major agency like WME to broadcast the live content for 20 of their shows in Q4 exclusively on Facebook. Get top talent performers like Kayne, Jay Z, and Britney. Get commitments for all of them to do shows, go to advertisers and sell Facefronts. Lets say you can get to 10% incremental to what the TV upfronts do = $1 billion.

Cross media attribution modeling: if you can directly correlate the advertising that is shown to consumers and exactly what they purchase off shelves, you just cracked into a $1 trillion offline retail opportunity that disrupts everyone in the value chain. Imagine being able to maintain your shopping list within your profile, new products are suggested to you, and you can automatically go grocery shopping with your friends in a digital environment. Replace the “mall” and replace the “grocery store” with a virtual, digital, social shopping experience – huge. Become the OS for purchasing products. How much is this worth? = priceless.



Ben Foxis Executive Vice President at Adconion Media Group, where he is responsible for the execution of global product strategy and innovation. He worked for nearly four years at Yahoo!/Overture, contributing to launches of Yahoo! Search and Yahoo! Publisher Networks. Follow him on Twitter @benfoxgo.

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There’s a Zucker born everyday: Facebook may aquire Opera for over $1Billion

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A Zucker is Born Everyday….

(All Links SFW, unless you live in Silicon Valley)

Chicago (My Mom’s Basement) – Rumors on the interwebs places potential interest that Facebook may aquire Opera (the Web Browser not this). Both have the dubious distinction of being over priced.

It would be a good move. Failbook has had problems corning the ad market in relation to mobile technology. Suckerburg’s investment video (lol, here is the real video) makes it clear his number one priority is to build the biggest Massive Online Multiplayer and not generate ad revenue. Anyone who has taken Home Economics 101 knows that Businesses need to make money. And Social Networking sites do it through advertising.

So far the company’s main asset has been the over valuation provided by Chase, it’s lawyers, and the greedy investors on the top of the pyramid scheme.  Unfortunately the vicious cycle of speculation is driving Opera’s valuation up as well.  Monopoly money is only good when playing the investment bubble game and now it’s time to put-up or shut up.

Not that it wouldn’t (double negative alert) be a good idea to aquire Opera who makes various web browsers that work across an array of platforms including mobile phones, tablets, PCs, and TVs. Surely it would be sensible, more so than Facebook’s purchase of Instagram to acquire a web browsing company. It would increase the number of mobile app developers and add 200 million users, from places like Asia, Africa, India and Brazil (where Facebook isn’t as popular).

My problem with this is (1) Why didn’t Facebook move to acquire this company sooner (2) Why doesn’t Facebook try to develop it’s own browser technology (3) How much ad revenue does Facebook expect to generate in Africa, Brazil, or China?

Interesting questions, we’ll shall wait and see.



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Chain Offers Free Pizza If You Order in Spanish

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Chain Offers Free Pizza If You Order in Spanish

Texas-based company’s promotion draws predictable heatBy David Griner

The “Speak English or leave” fringe of anglo America has a new reason to hate Spanish speakers: They get free pizza. Texas-based chain Pizza Patron has announced it will give a free large pepperoni pizza to anyone who orders in Spanish on the evening of June 5. It’s not the first attention-grabbing promotion by the chain, which announced in 2007 it would accept pesos as payment. The giveaway has, as you’d expect, sparked national debate among social conservatives who fear the encroachment of Latino culture. “No thank you for your racist promotion. The native language in the USA is English,” notes one Facebook commenter quoted by ABC News. I feel the same way about America’s proud native language, which is why I always insist on ordering my pizzas in a Shoshone Uto-Aztecan dialect.

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Introducing RentMyAdSpace.com

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