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Obama's Web

Watching a bit of the DNC rules committee’s (a committee wrapped in a committee, like the Tootsie Roll center of a Tootsie pop) meeting today on CNN, I discovered yet again that the Democratic race is still not over. It seems that, at the beginning of both the Democratic and Republican campaigns, lo those many months ago, Americans were inspired, if not excited, by the prospect of an election. Yet today, after being inundated with news from each race for months, Americans are feeling saturated, if not bobble-headed. For me, the word "pundit" elicits uncontrollable sneezing, and donkeys and elephants make me nervous. But regardless of how Florida and Michigan finally dress for the convention in August, and how much angst this interminable race causes Democrats, there’s some good news to be had.

Two posts ago, I addressed Barack Obama’s reputation as a web-savvy candidate and his formulation of a political brand and wondered how he’s going about it. Today, I would like to attempt to discover why Obama is being touted as a pacesetter.

On Thursday, the ClickZ Network released the Federal Election Committee’s estimates of the Obama campaign’s online ad spending. Obama, yet again, has outdone all other candidates in terms of online spending—and fund-raising. The numbers tell us that his campaign spent $3.5 million on online advertising between January and April—with Google scoring approximately 82% of that money. For many, Google ranking among the most patronized in any online category is no surprise, but if you’re like me, you may want to know why.

In traditional media, how much an advertiser pays for a particular ad is dependent on how many people will be exposed to that ad. This arrangement (impression-based advertising) was applied to online advertising during the dotcom boom—as advertisers paid for an ad based on how many people were exposed to a particular banner, for example. Today, according to Brandt Dainow of iMedia Connection, business has pushed online advertising to shift towards performance-based advertising, that is, paying for ad-space based on how many people are actually delivered directly to the company’s website.

Cost-per-action advertising, which is where online advertising is going next, takes this one step further, as the advertiser pays when a customer not only clicks to their website but actually fills out a form or makes a purchase. Google has been extremely successful in delivering customers to advertisers because of its development of programs like Adsense, which has recently incorporated cost-per-action advertising into its repertoire. For those unfamiliar with Adense, one can allocate space on a homepage or blog to be filled by ads. Adsense places ads relative to your business in that space, and each time someone goes to the advertisers’ homepage, the owner of the website gets paid. Adsense serves ads to your website (using similar technology to its SE) that are relevant to your website’s content and are less intrusive than, say, a banner, making the ad much more likely to reach its targeted customer.

ClickZ tells us that Obama has begun doing what businesses have been doing for quite some time, that is, taking advantage of online performance-based advertising. Online advertising is evolving and businesses that keep up with the progressing trends often find that their revenue increases in turn. By going to the web to raise money, and by investing in online advertising, Obama is encouraging a more cutting-edge approach to politics—and highlighting a still-for-many novel idea for business. By patronizing Google, Obama’s brand starts to meld in the public’s mind with innovative, fresh brands like that of Google and Apple.

Another interesting way Obama has embraced social media and online potential is by starting a user-generated campaign think tank. According to ReadWriteWeb, by letting users participate in the generation of ideas and content for his campaign and by letting his supporters vote on the best ideas and proposals, Obama is able to gain access to and then utilize "the ideas that your most loyal customers really want, [which are the] things that are most likely to succeed in the marketplace." The interactive online think tank was originally promulgated by businesses like Starbucks and Salesforce, but Obama has now integrated this idea into politics with his own unofficial online think tank called "Oh Boy Obama".

Many companies are taking advantage of the web community. With millions of people able to communicate and connect quicker and easier via the web, companies are relying on this new resource to help refine their product, refine their advertising, and build community interaction. As online activity grows and as more and more people spend their free time on the web, the politicians who succeed will invariably be the ones who integrate their brands with the resources and technology being honed on the web.

At this point, the money and attention devoted to online advertising and web-based think tanks may still pale in comparison to the traditional venues, but it seems that trends are shifting. Not only that, but Obama’s online ad strategy shows that he’s leaning towards long-term fundraising and long-term development strategies that will benefit the interconnectivity of every politician and his or her base. Smart, Fast money.