In politics, the value of an email address is difficult to quantify

Posted July 5th, 2008 at 8:38 PM in Politics, Technology

One of the most popular strategies for selling something online involves the use of an opt-in email list. Rather than pay to send somebody to a page where they have two choices — buy product or don’t buy product — you give them a third option: sign up for more information. You can incentivize signups in many ways (e.g., “free 10-page information pack sent instantly to your email,” or “sign up to receive a coupon for 10% off”), and you get to contact anybody who signs up by email a theoretically unlimited number of times.

Conventional wisdom is that it takes 7 “asks” to get a “yes” from an average customer buying an average product. I don’t know where that number came from, but it’s still true that an email opt-in is worth money to a seller. And most sellers can quantify exactly how much a new email address is worth to them by taking their profit on a sale and multiplying it by the likelihood that somebody will buy their product after receiving their series of automatically generated emails. For instance, I’ve run marketing projects where I’ve assumed the value of an email address to be about $1. But I was selling crap and making crap money, so that number can get significantly higher.

In politics, it’s harder to quantify the value of an email address. Barack Obama’s proprietary social networking web site has about 1 million members, his online donor rolls have swelled to over 1.5 million, and the total size of his email list is unknown (GOP tech guru Patrick Ruffini thinks it’s 4 to 8 million). What we do know is that only a small fraction of supporters on a candidate’s email list will ever make a donation. Whether we’re talking 1% or 15% depends on a lot of variables for which there aren’t obvious controls, but Obama’s ratio of email list recipient to donor is almost certainly higher than any candidate on his level.

The cynic in me would leave my analysis here, relying on the assumption that the only value of an email list opt-in is the potential for a direct contribution. The 2008 presidential campaign has shown the weakness of that assumption.

Opt-in email lists are more than just ATM machines. This year, email has allowed candidates to communicate messages instantly — and for free — in a world where advertising using other forms of media requires time and a lot of money. And it’s a valuable tool for organizing events, petitions, and meetings, all of which generally result in additional email signups.

So how much is an email address worth to a political campaign? Depends how good the campaign is at using it, and what the campaign’s goals are. But if I had to guess, the Obama campaign is willing to pay at least $5 per new email address with online advertising money, because their Google Adwords ads get very high placement, indicating that they pay more than anybody else advertising on similar keywords. That’s gotta mean at least $1 per click.

Assuming they only get an email address signup every 4-6 times somebody clicks on one of their ads, they’re paying about $5 per signup. And they’ve been running about the same ad campaign for a full year, so they would have downgraded their maximum bids to lower their cost per click if they didn’t think it was paying off.

Why? This story from Politico last month lays out some of the ways Obama could use his list after the election. But I doubt the Obama web team is thinking that far in advance, because no campaign ever does. So they think that between now and November, they will get enough value out of each individual email address to pay $5 for them.

Seems absurd to me, but I’m not the one running a presidential campaign with a $300 million budget.

2 comments  

2 Responses to “In politics, the value of an email address is difficult to quantify”

1. Chase Martyn » Blog Archive » Who benefits from the pro-Hillary, anti-Obama movement online? says:

   July 7, 2008 at 11:42 pm

   [...] Yesterday, I happened upon IOwnMyVote.com, one of the many online petition sites organized around the anti-Obama Clinton supporters. The petition asks for basic contact information, just as all online petitions do, becuase online petitions are really only useful to organizations insofar as they help build up an email list. (For more on that, see below.) [...]
2. desmoinesdem says:

   July 8, 2008 at 4:58 am

   Earlier this year, I got an e-mail from Joe Lieberman’s campaign claiming that I had “requested” to be added back onto his list:

   http://www.bleedingheartland.com/showDiary.do?diaryId=1337

   That was a total lie.

   I assume that he was trying to build his e-mail list so he could sell contacts to the McCain campaign or some other organization. I didn’t want him to be able to earn even a cent from me.

   So although I am curious about what Joe is mailing to his list, I didn’t opt in.