Money-Vote: Finding efficiency in a midterm year

Money-Vote: Finding efficiency in a midterm year
Too many campaigns are playing old-school baseball

In the bestseller “Moneyball,” author Michael Lewis exposed a glaring market inefficiency pervading professional baseball for more than a century: Teams were paying big dollars for big name players, overvaluing subjective stats, and focusing on the wrong endgame.

Instead, Lewis exposed a tactic allowing a small market team to compete with the richest franchises in the country, even though their budget was a third the size.

The tactic? Purchasing “runs” in baseball. Lewis found teams were overvaluing statistics that did not translate to runs, and players with better run statistics were undervalued. This created market inefficiencies for quality players.

Many campaigns are making the same mistake as old-school baseball. They are building budgets and strategies based on “the way it has always been done,” as opposed to making their media expenditures more efficient, especially in a midterm election.

Campaigns should not misunderstand—the power of a broadcast medium is the equivalent of a power hitter who can hit the long ball and increase ticket sales. But campaigns also need to understand the cost per voter on television goes up dramatically in a midterm election. Therefore, the goal is to find and persuade targeted voters as opposed to finding anyone sitting in their living room flipping channels.

In 2014, most states will see a turnout drop of 30-45 percent from 2012. However, media market prices do not fluctuate with voter turnout. So while TV costs remain consistent, or even slightly increase, audiences shrink and push inefficiencies into budgets with a heavy focus on TV. It’s just like depleting a team’s budget on a single power hitter while the rest of the lineup fails to score.

Bottom line: campaigns should look long and hard at the efficiency of broadcast communication mediums and focus on “purchasing” voters through more targeted mediums. (Legally, of course.)

Consider a top targeted congressional race in 2014: Texas CD-23. A full 78 percent of voters in the district live within the San Antonio media market. But in 2014, turnout in that market will drop by 39 percent. Because the gross rating point price does not drop to match the lower turnout, the money spent to influence one voter in 2014 increases by 63 percent over 2012. The TV cost per person, per week in 2014 will range from $1.87 in San Antonio to $10.47 in the El Paso market.

However, these are false prices because the true “runs” we are after in a campaign are targeted voters, not just any voter. So when pricing is adjusted to reflect the communication costs to targeted voters on TV, the range increases from $4.95 in San Antonio to $40.14 in El Paso, per week.

This analysis may not hold true in a district with more efficient coverage or dramatically cheaper TV markets, but the point is clear: campaigns should not just do what has always been done in a district. They should take time to look at the efficiency of their communication dollars and ensure they have a plan that actually reaches targeted voters in the most efficient way possible.

A week of mail would cost only $3.75 per targeted voter, per week, and that price includes a piece of mail every day, including postage. When it’s paired with phones and online ads through cookie matching, IP address targeting and/or zip code targeting, campaigns can spend less money winning the targeted voter while reducing bleed into non-targeted voters. Technology has decreased printing costs and increased targeting capabilities, allowing consistent pricing regardless of high turnout or low turnout years. That’s unlike TV.

So the new trend in direct mail in 2014 will be more mail paired with other targeted mediums. Mail can be a far more efficient use of campaign resources in lower turnout elections. Smart campaigns in 2014 will diversify communications to make sure they maximize the efficiency of each dollar raised, and in doing so will see a small communication medium make a large splash in campaigns.

We believe the days of dominating one medium in a campaign are ending with the diversification of new, and more targetable, mediums.

In 2002, the Oakland A’s broke the record for the longest winning streak in baseball history (20 games) with a team devoid of star players. In the end, even teams with superstars have empty stadiums if they don’t score runs and win games.

Liz Chadderdon is president of The Chadderdon Group, a Democratic direct mail firm. Joe Lestingi is a senior political strategist at The Chadderdon Group.

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