With a mix of traditional and new media strategists, we expected some fireworks during our Shop Talk lunch.
This issue's shoptalkers: Brian Donahue, founder and partner of CRAFT Media/Digital; Amy Niles Gonzalez, founder and president of Blueprint Interactive; Jason Ralston, partner at Ralston Lapp; and Brad Todd, founding partner of OnMessage Inc.
C&E: We hear plenty of new media folks argue that television is dying and campaigns need to be spending more and more online. Is that the case?
Jason Ralston: The truth is, television's not dead and it's not dying. But it is changing. Viewership is increasingly fractured. So the question now is, where do you get those eyeballs from? The growth is in digital and online media. So any campaign that does one without the other is making a huge mistake. Television is still king right now. I'm not saying it stays there, but it is still the dominant way to reach a mass audience quickly.
C&E: Ok, so TV is still king. No one here disagrees with that?
Bradd Todd: Well, I would just add an amendment. TV is king. But you have to ask: What is your task, what is your target and what's the terrain? [Rep.] Tim Griffin [R-Ark.] is a client of ours and his district is wholly within the Little Rock media market, which happens to be very affordably priced. So TV and radio are by far the dominant mediums there. If you're doing a congressional primary in the Chicago suburbs, broadcast television is out of the question. The task matters and who your target is matters.
Amy Niles Gonzalez: Integration is really important, too, and thinking about how the different components fit together. If you're doing just one and not thinking about the others, you're missing certain segments and you're not delivering the best for your client.
Brian Donahue: I would make this analogy—do you ask a doctor if a scalpel is king? Do you ask a handyman if a hammer is king? In other professions, people understand there are a multitude of tools you can use to achieve something. I think we're heading toward an understanding that different political tools serve different purposes. And that's what we really need to start thinking about. You do have new media consultants who say, 'TV's dead. It's too expensive.' I think Brad is exactly right. Understand what your task is and find the right tool to accomplish that. Most of the time, it's a mix.
Ralston: And where you are matters a lot. The opposite of the Tim Griffin example is the Annie Kuster-Charlie Bass race in New Hampshire. You've got WMUR, which is very efficient. But other than that, TV is very difficult. So there's an important role that digital plays there and will play in this next election.
Todd: It's important to realize that they work together, too. [Sen.] Ron Johnson [R-Wis.] was one of our clients last cycle and there are certain counties in northern Wisconsin where the broadcast penetration is low and cable penetration is nearly nonexistant. But there is very high satellite penetration. In those small markets, the local station is not on the satellite so it’s very difficult to get a television message to them. We found that our video on the internet—banner in-stream video and pre-roll ads—were watched three times more in those counties than they were in the state at large. Those people were clearly looking for a video aspect to the campaign. So we cut our television ads down and put almost all of them up in pre-roll in those places.
C&E: Everyone at this table clearly sees the value of online, but there are still plenty of dinosaurs out there in the industry, right?
Todd: It is still difficult to convince plenty of operatives of the value of online. Part of that is because they don't understand the metrics involved and part of that is because the online content industry doesn't really have its act together on metrics. I'm actually somewhat critical of where they are on pricing and measurement. Everyone who's a professional in politics understands what a GRP [gross rating point] is. But no one yet completely understands or believes the kinds of things they're getting from comScore. There are some consultants who are scared of it, because they have not yet been able to convince the client it's worthwhile.
Gonzalez: Or they just don't feel comfortable with it themselves. There are so many different metrics. In some ways, it would be easier if there were just a couple.
Donahue: Unfortunately, you see this competitiveness between the various disciplines reflected on some of the political blogs. But I think there are several leaders in the political consulting industry who do understand that one can help the other. We ran several tests with certain clients and in all instances we found that doing online advertising in conjunction with television or in conjunction with radio, drove a lot more click-throughs and site traffic. So getting away from the competitive speak is important.
Ralston: I actually think radio is the forgotten stepchild in this whole conversation. It can play a critical role, particularly in more rural districts. Sometimes you end up with the opposite problem in terms of campaigns actually being more interested in online than makes sense for their district. Then you need to have a conversation with the 25-year-old campaign manager about why radio is actually a really valuable tool.
Todd: It's cable and radio budgets that are being cannibalized more for banner video now. And we continue to see cable's pricing going crazy. It's now double the price per point of a comparable ad on broadcast television in most markets and it's limited. I actually think cable's pricing model is putting it further in jeopardy. Campaigns are more quickly saying, 'Let's kill the cable budget if we need this online stuff.'
C&E: Do you all agree with that?
Ralston: I do agree with it. I also think in terms of the content, you're going to see more and more video. I still believe that video is the most compelling media format that we have and so it's just a matter of how you deliver it that's changing.
Todd: If you print this you're just encouraging NCC to call and ream both of us out.
Donahue: The newspaper owners for a long time had their heads in the sand and were denying that their readership was being eaten alive by online. And we’re also dealing with the station managers, traffickers and other kinds of individuals who work bankers' hours and just aren't flexible.
Ralston: Right. So when it's a holiday weekend, you have to get the traffic there by Thursday morning. It's ridiculous.
Todd: And banner video takes four days for approval. You might think the Internet would be the instant industry. It's not.
Gonzalez: It depends on who you're working with, though, and the relationships you have. But generally speaking, they don't pull the hours we pull.
Donahue: Whether it's the cable providers, the broadcast providers or online, they all need to be moving faster, working toward delivering better metrics and being more flexible. Political advertising is very big business.
Todd: And potentially, online advertising has the ability to be faster, more flexible and more precise in its measurement than anything else. Assuming the industry emerges out of its Wild West phase and gets regularized somewhat, online can be all of those things.
C&E: How can the industry move more quickly in that direction?
Gonzalez: Well, there are a number of platforms that are self-service. So if you want to do it Sunday night at nine o'clock, you can get out what you need to. A lot of folks don't have that and some of the platforms that are out don't have all the capabilities. But when you have to deal with people, people are used to working nine to five.
Todd: I think pricing is still an issue, too. In Wisconsin, we found the number one website in the Supreme Court race for delivering clicks to our video was Journal-Sentinel online. In fact, five of the top eight websites were old-line print websites. So even though the Internet is on a straight-line path to overtake print as far as media consumption goes, the old-line print guys who are now online have a chance to be real leaders in capturing budgets. But it's almost always the most expensive online advertising to do.
Gonzalez: That’s right, because they're used to the print pricing. They think this is a steal when in fact it's expensive in relative terms.
Todd: They have the right audience, but the pricing is totally out of line.
C&E: When you think of a budget for online, do you think of it in terms of a percentage? Does the notion of a percentage bother you?
Ralston: Yeah, it really does. It depends so much on the circumstance that you're in and what you're trying to accomplish and who it is that you’re targeting.
Donahue: Back to my analogy from earlier—does every surgery require a certain percentage of time you use a scalpel versus a saw? It all depends on the job.
Ralston: I also think the budget you have to work with can have a big impact on what mediums you’re in and how many you’re in. In the perfect campaign, you’re able to do everything. But most of the time, budgets are tight and you need to pick a couple and be as dominant as possible in those one or two.
Todd: Every campaign has to choose what they're going to be good at and what they're going to be bad at. And when you commit to being bad at something, you have to be really bad at it. Therefore, when you throw out arbitrary percentages like 15 percent has to be online, you are precluding the fact that the campaign has to choose what it's going to be bad at. I teach a lot of TV schools for the RNC and that's one thing I often say, ‘You may have to choose to be bad at broadcast television, because you may not have the money to do it.’ I think 65 percent of spending in every campaign needs to be on message. The question is, within that bucket of message, which is the most influential based on the target, the task and the terrain?
C&E: Are we moving more towards digital firms actually handling all of a campaign's TV work?
Donahue: I believe so. I think the market is demanding that. Firms that understand how to integrate better, that understand TV and online and their usefulness for each other, is what the market will dictate. The political consulting industry, as it was built thirty or forty years ago, was built with different silos. You had media folks, direct mail folks, fundraisers, pollsters; whatever your niche was, you tended to sort of fall into that place. Well, now campaigns have to hire five to seven consultants who aren't on the same page, sometimes in conflict and competitive with one another. It's important to start thinking about communications in an integrated way and I think people who are good at marketing and advertising have the ability to understand the benefits and the shortcomings of all the communications channels. I think you've got a lot of consultants who would rather just think about their own thing as opposed to the larger picture.
Ralston: I do think there's going to be a central provider of content and that content will get distributed in various ways. I don’t think it's necessarily that the new media firms are going to take over television or that television is going to absorb new media. But I think Brian is right that either you're going to get that from one place or you may get it from a couple of places that are closely integrated. I do think you end up with a core amount of content and message that you want to deliver in a variety of platforms and that needs to be consistent.
Todd: Let me reverse engineer this question. As long as there are media firms who don't understand or attempt to analyze the need for online, there will be a place for online-only firms. The online firms have to get in the content business or else they're going to lose the lion's share of the budget to the guys who are doing the content on the media side. But eventually, we will most likely reach a place where there are content firms and there are strategy firms and everyone has an appreciation for both things.
C&E: How far off do you think that is?
Todd: It could take thirty years. Technological change is glacially slow in a business that has such a tyranny of the urgency. A lot of people are able to be successful without staying current on technology, so who knows.
Donahue: Consumers will dictate advertising and marketing. In our business, voters will dictate. On my iPad, I watch more Netflix than I do in any other way. No one ever thought of that four years ago. Most people have tablet devices now and a majority have smart phones. Everything is changing.
Todd: One place I think you can look to see hints of where we're headed is what's happening in the larger world of content providers. I'm a sports junkie so I know that Major League Baseball does not view its product as a television product. You've got MLB TV, which is viewable on your smartphone, your laptop and on their satellite channel. They produce baseball content and deliver it at a profit in a lot of different ways. I think the campaign business will end up the same way. We deliver a product and we'll do it a lot of different ways.
Ralston: That's right. I think they're going to look for smart people who understand politics, who understand marketing and who can produce good creative strategic content. Those will be the people that are providing it and how we go in that direction remains to be seen.
C&E: Is it fair to say it's getting harder to make those resource allocation decisions in the context of a campaign?
Todd: That depends on the level of professional you're dealing with. There are plenty of primaries where I've argued for no television and instead argued that we should put the money in the mailbox. It just depends on which five people you have around the table.
Ralston: I actually don’t see these huge turf battles that often. What’s becoming harder is making smart strategic decisions about how to reach people. You used to just put it on TV—broadcast and cable—and you're set. Now, you've got to make some tougher decisions.
C&E: What sort of new tactics or techniques do you see on the horizon in 2012?
Todd: I think you'll see a lot more video messages designed for smartphones. It may be text to mobile delivery. The delivery is going to come in a lot of different ways. But that, I think, is a fairly new frontier.
Ralston: I think whether it's use of smartphones or just increasing the use of video in the online space, we'll definitely see more and more video content.
Gonzalez: We've done some more mobile ads and we've actually had a campaign ask us about Foursquare, which almost never happens. If campaigns actually start using the geo-social networks, that could be interesting.
Donahue: Web video will become increasingly important. Mobile devices, too. Geo-intelligence for those devices in particular is going to be important. But also, back to what I mentioned earlier: data. Getting better at manipulating, understanding and then executing with the data you have will be key.
Ralston: We've talked a lot about how technology is changing the business of directly communicating with voters, but it has also changed the production world incredibly. The fact that you continue to see costs come down, both in terms of shooting and post-production. I think it allows for the creation of more and more content and variation.
Todd: It's an odd thing because you have these downward cost pressures when it comes to production costs, but upward pressures when it comes to creative. Based on our experience and what we know works online, if you're not more creative with your approach, you won't cut through in the online world.
C&E: How about the influence of outside groups? What's different when it comes to creating ads for a group like American Crossroads?
Ralston: One of the things that is nice about the independent expenditure groups is that you get to experiment more. These are the times that you're able to test things in a way that you can't do on the campaign side.
Todd: I also think you're likely to see a lot more online activity this cycle from the third party groups. When you're a campaign and dealing with a $2,500 [per donor] limit, the screen in terms of how a campaign chooses to spend those scare resources is pretty tight. The outside groups aren't as worried about it.
Ralston: I think they see an opportunity to come in early and kind of create the narrative for a race. That's what the smart ones will do. You can get in early with a mix of online and other mediums and really help to drive it.