Email Fundraising 1, Direct Mail 0

Posted July 8th, 2008 at 2:13 AM in Journalism, Politics, Technology

Talking Points Memo may have singlehandedly taken down GOP direct mail fundraising firm BMW Direct for charging ridiculous fees (perhaps selectively) and — worse — for deceiving clients. The way TPM has reported the story will be a textbook study in online journalism going forward, because their execution — timing, reaction, writing style, etc. — have been pitch perfect.

And no, a direct mail firm isn’t on the same level as Attorney General Alberto Gonzalez, but that became too big a story to credit one online news outlet with everything. The BMW Direct story is all TPM’s.

My reaction to the allegations? I’m not shocked.

Perhaps to those who are used to watching politics on a national stage, who haven’t gotten their hands dirty in races that don’t get the media spotlight, consultants ripping off candidates is a new phenomenon. But away from all the attention, it happens all the time.

Uninitiated candidates who try to navigate the terrain of a campaign alone are unbelievably easy marks.

Among other lessons campaigns can learn from the story is this: the more a campaign can use the Internet to cut out vendors and consultants, the better. Email fundraising will put companies like BMW Direct out of business, or it will at least prevent them from inflating production and delivery costs, since those are effectively zero online.

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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. Read the rest of this entry »

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