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'This Isn't the Year': Politicos Cynical on Net's Role in Campaign Ads

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The Internet has revolutionized political campaigning for the 2004 election cycle, but not when it comes to online ad spending. We debunk a few myths about online political ads and the nascent field of blog ads, as consultants and publishers hope for a fall breakthrough.

Which of the following milestones for the 2004 campaign hasn't happened yet: Howard Dean and his wired campaign manager Joe Trippi become a media sensation from online fund raising and a popular Weblog? President George W. Bush scores publicity by running longer form, edgy Web-only video ads that attack John Kerry? Kerry uses an e-mail message to backers to break the news of his running mate? Kerry and Bush spend 5 percent of their total ad money online?

If you guessed the last one, count yourself as a knowledgeable observer of the online political scene. Though this election cycle has broken ground as one of innovative online initiatives, the two main presidential candidates have yet to embrace online advertising in a way that companies such as McDonald's have. Wall Street analysis firm Sanford Bernstein predicts that by 2010, marketers will spend more on the Net ($22.5 billion) than on network TV ($19.1 billion) or magazines ($17.4 billion).

"This isn't the year," said Jonathan Trenn of Pericles Communication, who helped Bush-Cheney with its online advertising. "You need people who have credence and expertise in both online and politics ... No one's been fired for buying TV. In 2000, in March, April, and May, Bush and Gore spent $14 million on TV. This year, in the same period, Bush and Kerry and 527 groups spent $155 million on TV. Media consultants are still devoted to TV."

While the basic song remains the same as when I last covered this topic in February, there have been some interesting developments in presidential politics online, including the Kerry running mate e-mail, Bush's attack ads making the e-mail rounds, and both candidates dipping their toes into the online ad waters. With all the hype and gloss surrounding online ads and politics, the time is right to clear up some common myths in the field, thanks to a dozen or so interviews with political consultants, bloggers, publishers and others.

Myth No. 1: This is the breakout year for political ads online.

Sure, in dollars spent, this year might end up a record year for political advertising online. The problem is that in percentage of total ad money spent by candidates, the Net is a miniscule slice. Larry Purpuro, a consultant who founded Rightclick Strategies and formerly ran the e-GOP initiative in 2000, is skeptical about the mindset of the presidential campaigns online.

"I think at the end of the day, they're still not serious about the Web," he told me. "What they're doing is a lot of CYA (cover your ass) tactics to look like they're Web savvy. Their notion of online advertising is essentially banner ads. Both campaigns are still at a level of Online Advertising 101, it's a very basic level. They might be spending incrementally more dollars, but all spending is up across the board."

Purpuro made one salient point: Neither of the main ad-buying agencies for the major candidates have online expertise. Unlike most mainstream ad agencies, which have online departments or subsidiaries, these ad buyers are focused almost exclusively on TV, and take a very low-risk approach to other ad formats.

The Bush re-election campaign touted a big online ad campaign in May that featured a Web video from first lady Laura Bush on education. However, a source close to the campaign said the ad was targeted at the wrong audience, women, at the wrong time -- when the Abu Ghraib prison scandal was making headlines. Instead of following up with other big ad campaigns online, Bush-Cheney has pulled back and is waiting for the fall season, the source said. (Bush-Cheney representatives did not respond to my queries by press time.)

Kerry, however, has been more prolific advertising online so far. According to Nielsen//NetRatings, Kerry purchased more than 70 million ad impressions in June, compared to just 94,000 for Bush-Cheney and 234,000 for the Republican National Committee. But of those ads, the vast majority were aimed at a Democratic base for fundraising and organizing -- and not for winning over voters.

Still, when I asked consultant Sanford Dickert, who was formerly the chief technology officer for the Kerry campaign, just what the percentage of online media buys compared to TV, he said, "It's not even worth calculating." When I asked if he saw more money shifting online over time, he was a bit more positive. "Online spending will definitely increase over time -- especially as candidates and consultants get familiar with the power of online and how it can be used in specific geographic areas to target their campaigns. But, in terms of dollars, broadcast will almost always dominate online spending."

Myth No. 2: Readers understand the separation of advertising and editorial online.

Not always. Because Kerry has bought more online ads than Bush, some media outlets have appeared to be favoring Kerry to some readers. At the San Francisco Chronicle's SFGate site, an influx of Kerry ads to reach the Bay Area's mainly liberal audience touched off complaints by Bush supporters who say the site isn't being neutral in the election. The site's editor, Vlae Kershner, told me via e-mail that he tried to explain to readers that SFGate is open to ads from all sides.

"I don't think most TV stations have to worry about only getting ads from one party or the other," Kershner said. "The potential problem for our industry is that our readers -- who don't always make the distinctions among news, opinion and advertising -- will increasingly view our Web sites as espousing a political point of view based on the advertising they see."

Kershner said he might ask the Chronicle readers representative to write something in his column about the online ad situation. When Glenn Reynolds ran Kerry and Democratic ads on his right-leaning Weblog, InstaPundit, he said he also got a few outraged e-mails from Republicans about the ads, "but their concern doesn't trouble me."

USAToday.com, which has a mainly moderate readership, has taken steps to make sure political ads aren't misread by its readers, according to publisher Jeff Webber. He said the site will not run any political ads in its politics section. When I glanced at the section, however, I noticed there were still "Related Advertiser Links" for political groups at the bottom of each page.

Michael Henry, director of sales for The Wall Street Journal Online, said his sites had no restrictions on where political ads could run, including on its conservative opinion pages. "If an advertiser came to us and said they would spend $1 million, but you can't take ads from my opponent, we wouldn't do that," Henry told me. "I think the USAToday.com knee-jerk reaction might just be because it's talking about the campaign, and doesn't want the readers to be confused about what is ads and what is editorial. And it's very clear on our site what's editorial and what's advertising."

Henry notes that OpinionJournal.com even has a "Soapbox" paid editorial space, where advertisers can basically write an editorial for a price. He thinks it would make a lot of sense for political candidates to buy that space, and doesn't think it would blur the ad/edit line.

Myth No. 3: Ads on blogs aren't making money for anyone yet.

One little known fact is that John Kerry's campaign was the first to purchase political advertisements through the new BlogAds network -- back in November when Howard Dean was getting all the attention. According to BlogAds honcho Henry Copeland, Kerry has run four waves of ad campaigns via BlogAds, which places ads on a variety of top-tier political Weblogs.

Dickert, who was with the Kerry campaign during its first BlogAds buy, says the blogging community was the perfect activist audience for the early groundwork of firing up the base. "Why were BlogAds appropriate?" Dickert said. "One is that the pricing was good for the reach. And two was that people seeing these ads were very passionate about issues. And if we were able to connect with the readers, then we could get them involved in the campaign."

Dickert said the BlogAds were instrumental in helping Kerry get more than 200 percent return on their total ad spending in that online campaign (which combined blog ads with other online ads). In other words, the candidate raised three times more than it spent for the campaign.

And who gets enriched by BlogAds? Well, BlogAds itself keeps 20 percent of the ads it sells, a pretty small slice for an ad network. Copeland told me the business was profitable as of the first quarter, and that his lean operation includes just one U.S. salesperson and three other employees who work from Hungary. "Suffice it to say that January's revenues equaled all of 2003, and we now have single days that equal January's revenues," Copeland said via e-mail, saying this says as much about how slow things were in '03 as anything.

There have been 60-odd political candidates who have advertised on BlogAds, with more than 100 political causes buying ads, but it's been dominated by Democrats. "Conservatives have been much less active in blog advertising," Copeland said. "I don't have any theories, but can say that 95 percent of blog advertising so far has been liberal. The Republicans have some catching up to do, and I know that conservative bloggers wish they would get on the bus."

InstaPundit blogger Reynolds says that he's made somewhere in the "low thousands per month" in BlogAds, with an art gallery being his single biggest advertiser, and The New Republic magazine coming in at No. 2. Political ads are still significant, he says, with Democratic ads outnumbering Republican ones. Markos Moulitsas Zuniga, who runs the Daily Kos liberal blog, says he has averaged about $6,000 per month with BlogAds, but the main plus was not having to beg readers for donations.

"I hate asking for money," Moulitsas told me. "My bandwidth costs were really growing. I was spending all this time and energy and it was costing me money. If the ads went away tomorrow, I'd be satisfied. I was able to get out of debt, start a college fund for my son. If nothing else, it got my wife to stop nagging about my blogging."

BlogAds seems to have made a lot of "blogging widows" happy. Copeland, too, said his wife is no longer questioning his sanity at trying to make a business from blogging. "Two and a half years ago my wife thought I'd gone insane," he said. "Blogs? Who the hell reads blogs, much less tries to build a business around them? A year ago she was still pretty convinced I'd drunk one too many Web Kool-Aid mixes. Today, she's willing to admit this blog stuff is real and not a phantasm."

Blog ads -- and online ads -- might be a reality for political campaigns, but they are still in the experimental stages for the huge national campaigns, who are still focused on TV. Until a younger, wired set can really become a political force in the voting booth, change will come slowly when it comes to paid political messaging.

Political Quotables

"If we get 15 years out from now, when the teens of today are doing the wage earning, we don't know what communication technology will be in their hands. At present, we don't have SMS (short message service) marketing or mobile instant messaging or satellite radio in the mix. But TV, which is currently the prevalent media channel, will always be significant."

 -- Sanford Dickert, former CTO for John Kerry for President, and current director of Internet strategy for Deutsch for U.S. Senate

"Until online political marketing professionals have a few campaigns tucked under their belt, and until the top media consultants see online marketing as an integral part of their strategy and not an experiment, you'll see few ad dollars flow to the interactive arena. Right now (Internet specialists) are mostly carrying out a predetermined strategy. We're not playing a hand in creating it."

 -- Jonathan Trenn, consultant for Pericles Communication, worked with Bush-Cheney campaign on online ads

"Our Internet ads are banner ads, and our goal is to go out to the widest possible audience. They are on sites that are all very popular, high-traffic Web sites. Our goal is not a targeted message, it's designed to reach out to the broadest audience possible."

 -- Christine Iverson, spokeswoman for the Republican National Committee, which has placed ads on 1,400 sites, but hasn't run any TV ads yet

"The research I've seen on our site is we are very moderate, which is good and bad in terms of political advertising. We're probably not as good for fund raising, but we're better for convincing voters later on, and that's what I think we'll see. It's just a question of timing."

 -- Jeff Webber, publisher of USAToday.com

"I was asked (by the Associated Press) if the bloggers would have an impact in the ground game of the Iowa caucus, and my reaction was that they were mainly in their bathrobes and couldn't get out the vote. They were all incensed, but the proof was in Howard Dean's showing. If they had had a dramatic impact on Iowa, he wouldn't have shown up third in Iowa. They did a great job nationally helping raise dollars, but at the end of the day, that didn't get people to show up in the voting booth."

 -- Larry Purpuro, consultant for Rightclick Strategies, and former leader of the e-GOP online initiative in 2000 for the RNC

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Related Links
AP: Campaign Blogs Question Traditional Media
BlogAds
BusinessWeek: Online Ads Take Off -- Again
BusinessWeek: The Vanishing Mass Market
Daily Kos Weblog
Dean's Blog for America
Deutsch for U.S. Senate
GOP.com
GeorgeWBush.com: Bush-Cheney '04 Launches New Web Video
GeorgeWBush.com: education Web ad with first lady Laura Bush
Glaser: Candidates Slow to Bring Political Advertising Dollars to the Web
InstaPundit Weblog
MediaPost: Kerry campaign e-mail usage
OpinionJournal.com's Soapbox
Rightclick Strategies
Related story on OJR
Glaser Online: Candidates Slow to Bring Political Advertising Dollars to the Web
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Vlae Kershner, editor, SFGate.com (San Francisco Chronicle)

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Jeff Webber, publisher of USAToday.com

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