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March 13, 2006

Election Tunes: Something Has Gotta Give

But you know nowadays
It's the old man,
He's got all the money
And a young man ain't got nothin' in the world
these days
I said nothing
Mose Allison
Young Man Blues

It looks like older Americans, a demographic that generally gets short shrift from media mavens, will be asked to dig much, much deeper into their political giving pockets. The 2008 election cycle, that has just started to warm up, will be the first in living memory where neither party has a sitting president or vice president in the running. Already it's not hard to find five "viable" candidates in either party making noises and it's not hard to imagine that at a moment when the political elites are enmeshed in one and more grave foreign policy debacles, spying and corruption scandals, and a trade-currency crisis in the making, Dean-like "maverick" candidates won't emerge as we get closer to the primaries.

A new study just released by IPDI (Institute for Politics Democracy and the Internet) at George Washington University acknowledges what hard-core political fundraisers have known all along:  the older you get the more likely you are to weigh in economically to both parties' political campaigns.  IPDI researchers found that the median age for all political donors giving more than $200 is a ripe 57.  For small donors, the median age is even higher, 59.

So, when it comes to big or small personal donors alike, gray-green has mattered up to now... a lot!  In fact, Gen U's, V's and W's have been worth hundreds of millions of dollars to the candidates in the last two election cycles. But for 2008 the amount needed is going to increase exponentially. A recent Washington Post article, Money's Going to Talk in 2008, predicts that it will take a minimum of $100 million just to play in the next round of presidential primaries. That means, if you agree that somewhere near 10 candidates will make it to the starting line, $1 billion, just for the primaries!  Add to that, the general election where it may take another $2 billion, overall.

Is there any wonder these numbers caught our eye? Can older Americans really afford, even after you subtract the matching grants, to give over a $billion dollars to a single political cycle, a number that far exceeds what they've given in the past, or are we going to hit some kind of ceiling that ensures that candidates that don't either have deep pockets of their own or appeal to older Americans will be weeded out before even the first votes are cast in Iowa and New Hampshire? There's a bigger question: If older Americans are such a significant poltiical demographic --they also vote in higher proportions than other groups-- why aren't they getting more in return from the politicians who depend on them to get into office? 

Just last year, it's easy to imagine that had Bush been having more success in Iraq, his albatross, he might have succeeded in getting away with stripping money out of Social Security, the very pool he uses to finance his budget deficits. Older Americans were overwhelmingly against Bush's tampering with this system that, unlike a lot of things in government, actually works. Then there's the Medicare drug benefit, that's turned out to be, at best, a maze for Seniors and a boondoggle for the Pharmaceutical and Insurance industries. It's hard not to imagine Seniors bristling as they face the program and learn that often they can do better on price going directly to Canada without the burdensome monthly insurance premiums that seem designed merely to pile on extra costs.

Traditionally the way fundraisers have reached their donor base is through direct mail campaigns. But direct mail is costly and inefficient: it's a dirty little secret that many direct mail campaigns actually cost campaigns more than they bring in. More often $8 dollars is spent for every $10 taken in. Like most things in American politics the campaign system is, at best, arcane and highly inefficient, from fundraising on the front end to getting the voters to pull the right lever on the back. And arcane plays to the hand of specialists, the closed guild of those who know how to make the sausages, so to speak. This is supposedly no game for outsiders. Not so surprising with campaigns, under cover of  the fog of war and its immediate aftermath, with all that money sloshing around, there's little or no real accounting of who ends up with it. The donor is given to imagine that it somehow vaporizes into a deep rung of political inferno, never to be thought of again

If you've ever given to any candidate in past elections, you just weren't supposed to be interested in anything more than whether they won or lost. Like a chronic gambler,  if she won, you were happy, at least for a while, and visa versa if she lost. One detail coming out of the IPDI Research Study on Small and Online Donors, which, BTW, was formally released this past Monday, is that it seems there is also a really strong,  for-a-while-factor in  the donor equation. You've got to say, no wonder!

According to Joseph Graf the IPDI project director, who spearheaded it, the Study found, for instance, that only 31% of the big Bush donors in 2000 re-upped in 2004.  Given the demographic, some, let's say, departed the mortal coil... but what about the other 60-odd percent?  Graf says that he suspects this inconstancy was not at all unique to the Bush II campaigns. Besides being older, richer and better educated, the people who take out their checkbooks for campaigns, it appears, are a lot fickler than we would have guessed.   

What most donors don't know is that the campaign managers and their media consultants and the advertising agencies who profit off of the ads are often the same people, wearing different hats, or if you will, different pockets. Imagine a system where the guys calling the shots with the budgets (BTW, of our money, whether it's matching grants or personal donations, that  must be spent really fast) hire themselves to create the ads at premium rates and then, surprise, hire themselves to place them, all at a percentage, of course! Big TV purchases mean big creative budgets and big commissions for the buyers. Little wonder, that's where most of the money ends up. Last time around Kerry spent $253 million in the primaries alone! .

The IPDI Research Study on Small and Online Donors was released as we noted, last Monday. It was timed to coincide with IPDI's Politics Online Conference 2006, which was held at GWU's Marvin Center here in DC on Tuesday and Wednesday also of last week, and which wrapped up with a panel presentation by Joe Graf, Hal Malchow of MSHC Partners and Grant Reeher, a Poli-Sci researcher and associate professor at Syracuse University.  Nowhere else do the Internet and the cream of campaign apparatchiks come smack up against each other than at IPDI's Politics Online, which has a track record that goes all the way back to 1994. Carol Darr, the Director of IPDI noted to us that this year there was a palpable difference in the degree of backer and sponsor interest in the 2006 Conference. Thus, if Darr is right, and the incomprehensible numbers above seem to bear her out, as the countdown to 2008 approaches, the Internet appears to those in the know, to loom ever larger as a determining force.

Up to now Web media have only gotten a minute percentage of both parties' campaign budgets. Maybe, at least for fundraising, it's because the donors just aren't supposed to be big Internet users yet. We suspect that's probably not right and it certainly will get less right every year. Maybe it's because all the Internet people on the "creative" side are mainly below 40.  Judging from the Conference attendees, there's definitely a gap. Of course, if some of the major donor demographic still is not, the voters are definitely online.  Between 9 and 5, if you want to reach somebody who votes  you'll probably find more of them on the Internet than anywhere else in media land. So what's going to work online this time around?

One law of the Internet, let's call it the dymaxion law, in honor of Buckminster Fuller's sense of structure, is that when the Internet meets gross inefficiencies and contradictions, the older system reaches what Andy Grove called an "inflexion point". The legacy system gives and a new one grows up in its place.  Those survivors who recognize the inflexion point live to play another day, the others disappear. We are postulating that just such a tipping point will occur in 2008 and it will be played out on the Web where money can be raised cheaper and where tailored messages can be "slivercast".

Whatever else we found out at Politics Online 2006, and there was much, one thing was clear: if anybody thought they knew how to control the Web's various eddies, waves, flames, swarms and whatever else evolves as we continue to invent this dimension, they weren't talking.  That's a good thing, 'cause if they had, we would have smiled. After all, the power of the Web to change election outcomes will be in its ad hoc-ness, it's fluidity, its innate, amorphous, socially inventive energies. The Web is an evolving conversation that more and more of us will find a way to take with us wherever we go! It's a passive place we merely check out and it's where we launch and follow threads, sometimes lurking, sometimes jumping in, where we congregate, hang back, participate, vent ... and where we expect to know what's changed-- we collaborate actively as in knowledge sharing engines like and passively in such things as search engine relevancy stats, as the conversation turns 24 hours a day.

Donors and voters will be more easily and cheaply reached on the Web than in highly wasteful blanket TV buys. But they will probably want to know from the campaigns how their money is and will be spent.  They are also going to have a lot more access to facts the campaigns may or may not want them to have. 2008 may be a $2billion election orgy, then again it may be the start of something new. 


Related Links:

Small Donors Blog

Small Donors Report.pdf


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Posted by dymaxion at 04:20 PM

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