The
Business of Online
Campaigns
Business Week Online, March 2004 By Steven Baker
You might think tech companies would be jumping into this burgeoning market,
but for most it's
merely a sideline
Scott Heiferman, 31-year-old co-founder of Meetup, runs one of the most dynamic
political phenoms
since the birth
of the Internet.
Politicians of
all stripes are
flocking to his
two-year-old site,
meetup.com. It
provides a Web
service for like-minded
people to schedule
get-togethers in
the real world.
Meetups were crucial
for the Howard
Dean campaign,
which saw some
180,000 people
sign. And now Democratic
candidate John
Kerry, along with
scores of other
state and local
politicians, is
counting on Meetups
for grassroots
support.
But
ride the tiny elevator
to Meetups' sparse
headquarters in
lower Manhattan
and ask Heiferman
about politics,
and the first thing
he does is pull
out a dog-earred
photo. It's a group
of people carrying
Chihuahuas. His
point? Politics
is just one aspect
of the Meetup business
and represents
about one-third
of the site's activity. "It just landed in our lap," he says. And even as political Meetups spread, Heiferman is anxious to keep
the company's nonpolitical
side, from canine
clubs in Kansas
City to Russian-language
Meetups in Spokane,
growing every bit
as fast.
Most
of the hot companies
providing political
service on the
Web come out with
the same refrain: "Politics is just a piece of our business." Convio, the Austin (Tex.) software company that provided Dean with e-commerce,
e-mail, and database
technology, says
it's far more focused
on nonprofit organizations
than on politics.
San Mateo (Calif.)-based
startup Biz360
produces software
that can read thousands
of newspaper articles
and give politicians
a read on trends.
But for Biz360,
too, politics is
a sideline to its
core corporate
market.
BAD
ODDS. Don't any
of these tech companies
want to focus hard
on the political
market? The short
answer: Very few.
For all the excitement
politics generates
in an election
year, it's an up-and-down
market that can
leave businesses
-- and especially
startups -- in
the lurch. The
trouble with politics,
say tech execs,
is that lots of
a company's customers
fall to defeat
every November.
That effectively
puts them out of
business.
"We
don't actively
market to campaigns," says Convio CEO Gene Austin. "You sign up for five, you're going to lose four." He says the entry into politics was a "fortuitous event" for Convio but still represents only 5% of revenue.
The
business logic
may be sound. But
the upshot could
be bad news for
politicos. While
other industries
benefit from a
broad selection
of specialized
software and services,
politics often
settles for tech
hand-me-downs.
Campaigns typically
must hire tech
consultancies to
adapt and stitch
together these
Internet tools.
Some even bring
in software developers
to build programs
from the ground
up.
CHEAPER
THAN TV. "We had 15 people doing all the tech stuff," recalls Josh Lerner who headed the tech team for retired General Wesley Clark. "It was insane." The result? Clark, who started very late, never managed to build the powerful
Web presence of
a Dean. This muffled
his message and
hindered his fund-raising
efforts.
Carrying
a campaign to the
Web is hard work,
and costly. Sure,
it's not as pricey
as running TV ads.
But the Dean campaign
spent a bit more
than $1 million
on tech, says one
former campaign
staffer. And putting
together a world-class
Web site, like
the Bush campaign's
(georgewbush.com),
costs some $200,000
to develop, estimates
Geoff Brookins,
CEO of Beachead
Technologies, a
New York company
that created the
Web site for the
Republican National
Committee (gop.com).
For
a campaign like
the President's,
which will likely
raise $200 million,
the Web site is
a bargain. It can
cost an estimated
$800,000, according
to Brookins, to
service the site:
answering mail,
harvesting e-mail
addresses, processing
donations, and
loading it with
a steady diet of
news, photos, and
video. But for
thousands of politicians
battling for state
and local posts,
mounting a Web
strategy is still
a stretch.
"Campaigns
shouldn't be building
technology and
writing software," says Lerner, from the Clark team. "They do it because they have to."
COMMUNITY
EFFORT. Now, Lerner
and a few colleagues
from the Clark
team see opportunity
in this nascent
political market.
They developed
Clark's applications
as open-source
projects. And now
they're hoping
that the same open-source
community that
built Linux into
a leading operating
system will hone
a suite of these
political programs
into a cheap downloadable
package.
It's
a long shot. But
the Web isn't likely
to transform politics
from top to bottom
until all the candidates
have a lively online
presence. If established
tech companies
continue to treat
the campaign market
as a sideline,
maybe the open-source
movement will find
a place in politics.
|
