April 23, 2014

The Future of Advertising is Online

It does not matter if one supports or opposes President Barack Obama. One aspect of the Obama Administration and the Obama campaign, in particular, that is superior is the ability to stay ahead of the curve when it comes to marketing and public outreach. If one can take off the partisan blinders and view this with a scholarly eye, one can arrive at the same conclusion.

Take a look at the expenditures of the Obama campaign compared to the Romney campaign in March 2012. It is true that Romney was attempting to secure the GOP nomination and therefore had to spend more money on items like television advertising which is usually reserved for the weeks preceding Election Day. Romney had many primary election days to deal with and part of his campaign expenditures reflect that fact.

However, once you factor out the different situations and get to the bones of the campaign expenditures, you realize that campaign budgets are just like government budgets. They reflect the values, priorities, and forecasts of its drafters.

On that point, I will argue that the Obama campaign is miles ahead of the competition in what they value, what they prioritize, and what they forecast.

First, Obama is not dismissing grassroots. Grassroots and the ground game are the top values and the top priorities of the Obama campaign. There is no replacement for face to face interaction on a personal level. Obama continues to invest resources in hiring campaign staff to organize the grassroots and reach every voter at their doorstep. There are voters who still rely on direct mail and phone calls and Obama is not ignoring this demographic by any means.

Second, Obama is saving money. Republicans will laugh wholeheartedly at that statement, but they are ignoring reality as applied to the Obama campaign to serve their own ideology. Take away the necessary primary expenditures from Romney. The average salary of an Obama staffer is much lower than the salary of the average Romney staffer. Republicans will use this opportunity to play politics and accuse Obama of being a hypocrite by paying his campaign staffers lower than what he would like private corporations to do. However, Obama’s strategy is to hire young, idealistic staffers who can do whatever it takes because they believe in the cause. For these people, working for the cause is more valuable than the paycheck. These people have lower salary requirements and you can hire a lot more of them. Obama wants lots of people on the ground working enthusiastically on his behalf so this is a sound decision. On the other hand, Romney’s staffers tend to be professional staff so they command a higher salary. The stats fit the image of a candidate who has surrounded himself with the best consultants money can buy.

Finally, when you look at how the amount of money the Obama campaign is spending for online advertising compared to postage for direct mail, you will see that the Obama campaign is forecasting that the future of advertising is online. I will argue that the future of advertising has arrived.

Fox Business recently published an article identifying the eight items the “Facebook generation” are not buying. Number eight on that list is television. Make no mistake, while people are still watching a fair amount of television, overall usage has declined and the method of delivery has changed. A changing economy has led to a changing of tastes.

People a while back thought that computers would cut down the amount of time spent at work. It has only increased it. People thought that the internet would make work more efficient and give us more leisure time. The internet did make work more efficient, but Americans have used the extra time for more work. In the process, America has grown exponentially in creativity and content creation. That is why America is the greatest country in the whole wide world.

We as Americans hustle enormously, grind all day – everyday, and ball so hard. Swag.

With people working more than ever, people are also working odd hours. This is becoming more of the norm. Some folks, elected officials and lawyers in my experience, work until 2:00am. Other folks, like me coming from athletics, work best at 5:00am after going to bed at 9:00pm the previous night. In vibrant cities like DC, a networking happy hour or a major evening event for work is the norm. Young professionals are working or socializing at night and not becoming couch potatoes.

The idea that people must carve out time in their schedule to go home and sit idly in front of the television screen has become obsolete. The “Facebook generation” is an on-demand generation. They will watch what they want whenever they want.

For people who still subscribe to television services, they will often record shows to DVR and fast forward through the commercials. For people who watch sports on television, they will often go to a bar with other fans for the atmosphere. If it is not the Super Bowl, nobody is paying attention to the commercials. They have cheese fries and conversation to enjoy.

Some young people have given up on television all together. If they are still watching television, they are watching it online. In my case, I have not had television for over two years. My disposable income and quality of life have both increased. If there is something I absolutely need to see on TV, I am either watching in the company of others, thus forcing me to be social, or watching TV in the weight room while I’m on a treadmill. Hamster mentality, baby.

All of this is to illustrate that television advertising is declining significantly in reach. This is true especially among the key demographic of 18-35 year olds. Their habits will only crystallize over time and inform their worldview as they cast their ballots. Meanwhile, online advertising will continue to grow especially among this demographic. With the mainstreaming of smartphones thanks to the iPhone and its competitors, people are connected to the internet 24/7. They are texting friends and business colleagues, surfing the web, playing games, watching videos, looking at photos, listening to music, posting on Facebook, and tweeting on Twitter. They are doing all of this from their phone. When they are sitting down behind their desks to do work, they are doing the same things on the computer.

Thanks to changing tastes and lifestyles, online advertising is where the people are at and the Obama campaign understands this. Couple such foresight with aggressive youth outreach and a charismatic, historic candidate and you have a proven winning formula that delivered a victory and ’08 and is poised to repeat in ’12.

Republicans, on the other hand, are stuck in the 1950s and unaware and unaccepting of the rapid economic changes and changing consumer tastes that are happening around them. There will be Republicans who will lob ideological grenades and ad hominem attacks at me for saying this, but it is what it is. The desires of the “Facebook generation” are not the product of any left-wing economic policy. They are the product of pure free enterprise. The desires of the “Facebook generation” coincide with the freelance revolution in the economy (see below for further reading from Nine Shift and the Atlantic Monthly discussing this issue and trend in depth).

People are more mobile and working more than ever. Landline phones and printed newspapers will soon be history (thus diminishing phone banking and direct mail over time). Snail mail is a burden covered with junk mail that wastes the time of so many hard working professionals. Young people used to dream about owning cars. Now they see cars as an inconvenience and opt to live in walkable neighborhoods with public transit options where they can save time on their commute and enhance their quality of life. Forty-six percent of drivers aged 18 to 24 report that they would choose internet access over owning a car and only 22% of drivers are under 30 (Stockdale and Sauter, 2012).

With more home based businesses and teleworkers, there has been a growing demand for high-density, mixed use, walkable developments catered to a 24/7 connected, professional lifestyle (Draves and Coates, 2007). People are not just choosing an urban and urbane lifestyle by choice. They are doing it because it is a sound financial decision due to the needs of the 21st century economy. I have even heard church leaders say that the future of the church is in urban redevelopment because the megachurch in the suburbs and exurbs will not be sustainable with changing tastes and needs in the 21st century. The Obama campaign sees these trends and have targeted their message to forward thinking professionals and entrepreneurs who have embraced change that has come naturally due to technology and the economy.

Meanwhile, Republicans continue to abandon urban areas in droves. They complain about one party rule in the cities, but one party rule is the natural byproduct of a mass exodus of the other party. Republicans continue to gaze longingly to the 1950s with cars, highways, newspapers, television, single nuclear family homes, and sprawl. Republican elected officials and candidates have inherent difficulties playing catch up to the Democrats in online advertising and youth outreach because, as forward thinking some Republican officials may be, their constituencies, primary voters, and party bosses are old people and young people stuck in the romanticized 1950s in tastes and lifestyle.

Romney’s campaign budget depicts a perfectly manufactured, good looking, bland, Ward Cleaver-type politician from the romanticized 1950s reaching out to people whose lifestyles and tastes are very much 20th century. Obama’s campaign budget depicts a forward thinking, charismatic, swaggeriffic politician who knows where the people are and reaches them where they are at. People’s lifestyles and tastes have changed. Part of that is that they are spending more time online than in front of the television, disconnecting landline phones, and recycling junk mail without looking at it before they open their front door. Obama connects with the tastes and mores of the “Facebook generation” and has a distinct advantage here.

Further Reading:

Draves, William A. and Julie Coates (2007). Nine Shift: Work, life, and education in the 21st Century. Learning Resources Network. River Falls, WI. http://www.nineshift.com/

Horowitz, Sara (September 1, 2011). The Freelance Surge is the Industrial Revolution of Our Time. The Atlantic. Retrieved from http://www.theatlantic.com/business/archive/2011/09/the-freelance-surge-is-the-industrial-revolution-of-our-time/244229/

Stockdale, Charles B. and Michael B. Sauter. (April 19, 2012). Eight Products the Facebook Generation Will Not Buy. Fox Business. Retrieved from http://www.foxbusiness.com/technology/2012/04/19/eight-products-facebook-generation-will-not-buy/