October 08, 2012

Steal That Idea: 5 Smart Ways Presidential Candidates Mine Big Data


In the cutthroat race to the White House, candidates have to be exceptionally smart about how they gather and use data from myriad sources to better reach voters. CMOs would do well to learn a thing or 5 from Obama and Romney about connecting the right message with the right people.

Big data analytics has and continues to transform the race to the White House. Strategists for both presidential candidates are increasingly relying on digital technology and analytics to find, engage and, most importantly, activate voters and donors. These strategies offer some valuable lessons--and caveats--for chief marketing officers and sales leaders.

Like campaign strategists, CMOs need to find, engage, and activate customers in a data-rich landscape. A proliferation of social platforms coupled with an emerging culture of sharing has generated not only massive amounts of user data but also a wide array of opportunities to make connections with customers.

Among the many digital strategy and data analytics lessons from the current US presidential campaign, five stand out:

1. Go micro. Both political camps have hired more than 100 mathematicians, statisticians, data scientists, and software engineers to sift through data (including credit accounts, purchase history, property tax records, and charitable contributions) and psychographic information like values, interests, and attitudes. The two camps are amassing data to find donors, customize donation requests, and create a coherent view of voters' social graphs to find influencers in local communities.

Marketers need to embrace this kind of advanced micro-targeting to connect the dots between people, networks, and preferences to understand how to motivate customers. More importantly, they need to bring the same kind of clear-eyed, focused devotion to a tangible goal that the campaigns have shown. This isn't analysis for its own sake. Analytics must lead to action that drives growth. One high-tech company, for example, used advanced analytics to mine social media conversations, match them with customer databases, and funnel qualified leads to sales reps resulting in a 80% hit rate.

2. Go mobile. Both candidates are courting mobile voters like never before. The campaigns have released mobile apps with basic capabilities enable supporters to donate, locate campaign events, and find polling locations. Better features include social integration, which makes apps more powerful by allowing users to post to Facebook and Twitter, and to coordinate events with friends directly from the app. These applications merge social mobile and local (SoLoCo) into effective campaign engagement with voters and potential voters.

Mobile apps are also a smart way for marketers to create a deeper connection with customers, for example, by delivering convenience--like simplifying payments at stores and providing geo-targeted custom offers. Retailers see the ability to easily reach consumers when and where they shop, and to rapidly adjust offers to accommodate changing circumstances. All this gives marketers a powerful tool that can help them to truly own the customer experience. Visa, for example, has enabled The Gap to understand a shopper's physical location, much as online retailers use a consumer's search history to deliver more relevant marketing offers and other messages. Consumers join this program by enrolling their Visa card for real-time messages about nearby stores.

3. Get relevant. While the economy is widely acknowledged as the number one issue for this year's electorate, additional hot button topics are simmering just beneath the surface. According to the Pew Research Center, election issues that generated a far greater response from voters online were immigration, women and veterans' issues, and health care. While stump speeches and ads with a broader range often highlight economic issues, both camps are developing targeted digital messages for identified segments directly focused on these additional issues.

This focus on relevance is a critical lesson for marketers, who need to calibrate their messages to their audience. And it's often not just one audience. The micro-segmenting now possible means that marketers need to develop offers and content that appeal to the specific needs of their customers. One retail chain, for example, integrates its customer databases with external data on some 60 million households, tracking income, housing values, and number of children. Targeted emails based on this information obtain 10 to 18 times the response rate of generic email promotions.

4. Empower your base. One of the cornerstones of a successful presidential campaign is building a base of supporters and then activating them to take action and vote. Both campaigns have gone a step further by providing tools and platforms for supporters to easily find, connect with, and activate each other. A dashboard, for example, is a simple interface that allows each voter to manage their own outreach efforts.

CMOs know already how powerful word of mouth can be, especially in our social world. To make that come to life, they must provide enabling tools beyond share buttons that empower brand enthusiasts to share experiences and network with one another online. Ford's Fiesta campaign, for example, provided targeted influencers with a car, blogging tools, and a modest budget to share their experiences. The program achieved 60% name plate recognition, and drove a telling stat: 83% of Fiesta buyers had never bought a Ford before.

5. Get your money's worth. The Republican and Democratic camps will have spent an estimated $2.5 billion this election. The barrage of ads assaulting voters, especially in swing states, can seem overwhelming. In Cleveland, for example, television stations are running an estimated 87 ads per week. While TV ads (including, sadly, negative ads) have proven to be effective in convincing voters, is a voter more likely to vote for a candidate after seeing 5 of them or after seeing 100? Is the money on TV ads being spent effectively, or could it be getting a better return somewhere else?

It's a good question that CMOs need to ask themselves as well. In too many cases, marketing spend is dictated by historical trends or effects. For example, companies will spend on big campaigns beyond the point of effectiveness because they don't understand at what point incremental spend is ineffective. Marketers today need a much clearer sense of when their marketing dollars are working, and when they aren't--and then allocate money to channels that return value. One large packaged goods company, for example, moved 30% of its TV budget to social media after the data showed that social media had a much higher return on marketing investment.

Regardless of which candidate prevails in November, the presidential campaign has helped to usher in innovative approaches to connecting with potential voters. Today's technology-savvy CMOs can adopt these approaches to build support and loyalty for their brands.

Dennis Spillecke is a partner and Rishi Bhandari is a senior expert at McKinsey Marketing and Sales Practice.

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