Dollarocracy (43 page)

The actual Web site that displays the ads gets only a pittance of the amount spent. In 2003, for example, digital publishers “received most of every dollar advertisers spent on their sites,” Pariser reported. In “2010, they only received $.20.”
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The content on the sites is irrelevant as long as they deliver the desired targets. And only the desired targets at the Web site receive the ad in any case. “With a lot of the money being put toward advertising exchanges,” one industry trade publication observed, “web publications . . . have simply been bypassed and overlooked.”
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That is disastrous for the political Web sites that have sprung up online and that political junkies like us devour. It is not just that these sites, like others, cannot get funds from direct purchases by commercial advertisers. It is, ironically enough, that despite the nature of these Web sites,
political
advertising is not much of a source of revenue either. Zac Moffett, digital director of Romney's campaign, explained that most of its online ads were “smart.” “We're not buying a site. We're buying an audience. The power of the Internet is targeting.” Alex Treadway, COO of the
Daily Caller
, a conservative blog, said smart advertising “will put [the] free press out of business.” It is every bit as true for liberals and the left. John Amato, founder of the left-leaning
CrooksandLiars.com
, wondered why the Obama campaign couldn't give a supportive site like his $100,000 of the $100 million or so it was thought to be spending online. “We're here,” he pleaded. “Don't forget about us.”
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At the same time, because of the sheer desperation of sites to get advertising support—political or otherwise—this gives advertisers implicit and sometimes explicit power over the editorial content in a way that is not healthy. The ballyhooed professional elimination of commercial influence over the content, discussed in
Chapter 6
, is being undermined to the point where it is all but out the window.

One of the emerging trends is for campaigns or “independent” groups that support a campaign to quietly or even surreptitiously bankroll (and even create) ostensibly independent Web sites or bloggers with clear expectations of getting favorable coverage.
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This was one of the core cancers that led to
the rise of professional journalism a century ago! And even if the intent of a campaign placing ads on a sympathetic Web site is not to get favorable coverage, the practice can lend credence to the notion that the Web sites, all desperate for money, will be less likely to be critical of the campaign, because, after all, they really cannot afford to sacrifice the prospect of future ads. This dynamic can lead, at the least, to the appearance of corruption.
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Most importantly, the evolution of Internet advertising may sound the death knell for commercial journalism. The historical record is clear: final consumers, readers, have never been a sufficient source of revenues to support a credible popular journalism. Advertising provided the majority of revenues to bankroll U.S. journalism for most of the past 125 years, but advertising's attachment to supporting the news was always opportunistic. Now that advertising has more efficient ways to accomplish its goals, journalism is in its rearview mirror.

After twenty years of the Internet, it has barely spawned any viable new commercial news operations, and those few it has are small, pitched at niche audiences, and barely growing despite the quantum leap in Web traffic. The number of actual full-time editors and reporters employed at a living wage to do digital journalism is quite small, and stagnant. In December 2012, Rupert Murdoch's News Corporation shuttered
The Daily
, its ambitious attempt to create a digital news service for iPads and tablet computers. Given that two-thirds of tablet and smartphone owners get news from their devices, creating
The Daily
seemed like a smart play.
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It speaks volumes that Murdoch, with the vast resources of News Corporation to draw from and his unmatched imperial vision and patience, is jumping ship after torching tens of millions of dollars. If he can't pull it off, who can?

Nonprofit groups, like ProPublica, try to fill the void, but they are puny and depend upon foundation grants, a tenuous and limited source of funding. The notion that reader donations could support more than a smidgen of the needed activity online also has no grounds for credibility. The hope that nonprofit journalism could prosper online was dealt a serious blow by the candid revelations of
The Guardian
, the legendary nonprofit newspaper in Britain, which has one of the largest Web presences in the world. By 2012, it conceded that despite its enormous Web traffic and despite winning seemingly every award in the book, it did not know how it could sustain quality popular journalism
online once the traditional newspaper revenues dried up and it burned through its cash reserves. If
The Guardian
can't do it, who can?
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Indeed, much of online journalism is simply digital versions of news created by the old media of radio, TV, magazines, and, especially, newspapers. (That journalism, as with
The Guardian
, depends upon old media revenues and therefore is in constant jeopardy of shrinking.) This is very much the case in election coverage. A Pew Research Center survey determined that nearly 60 percent of Internet users regularly or sometimes visited “old media” Web sites and applications, far more than any other digital source for election coverage. And much of the remaining election news coverage and commentary relied upon this journalism as the basis for their contributions.
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This helps explain why so much of digital campaign coverage seems to be more of the dismal horse-race coverage and triviality found in the old media.

It also explains why social media, rather than upending the status quo, have seemingly been incorporated into it as full partners. Consider Twitter. “Virtually all political reporters” are on Twitter, NBC's Bob Sullivan observed, “and they increasingly take their cues from it.”
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“Twitter generates an outsized share of attention among political professionals and helps to form the narratives that pundits, journalists, and candidates will develop during and after big events.” It is part of the spin machine.
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One study of seventeen well-known U.S. political magazines found they had generated 216,000 tweets to 700,000 followers during October 2012.
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“For many news organizations, Twitter in particular has become a stand-in for public reaction.”
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Twitter has proven especially good at exposing and amplifying gaffes, one of the central obsessions of contemporary campaign coverage. Campaign press coverage has been degraded to “being on 24-hour gaffe” patrol, and Twitter is ideally suited for that mission.
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“The old adage used to be ‘don't say anything you wouldn't want to see on the front page of a newspaper,'” Republican official James Davis stated. “Now it might as well be ‘don't say anything that can be boiled down into 140 characters.”
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Not surprisingly, the Obama and Romney camps had numerous staffers assigned to do nothing but monitor tweets.
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The contribution of Twitter, and arguably social media writ large, to date seems as much about reinforcing the cynicism and practices of the money-and-media election complex as challenging them. It is certainly true that Twitter
can be a great organizing tool, as the Wisconsin uprising of 2011 and the Occupy Wall Street movements illustrated. But as a tool for educating and informing voters, Twitter falls short (we say this as devoted Tweeters).
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The Pew Research Center's Project for Excellence in Journalism determined that online presidential campaign coverage was “relentlessly negative” compared to other news media, and that “the tone of conversation was the most negative on Twitter.”
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Meredith Conroy's study of Facebook users concluded that, while much was taking place there politically, it was “ineffective . . . as a forum to learn new political information online.” While Facebook “online political group membership is correlated with offline political participation,” Conroy wrote, “we do not see an equally significant correlation with levels of political knowledge.” People are not getting better informed online.
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“Personal data is the oil of the information age,” the
New York Times
observed, and that captures exactly where the most important transformation of election campaigns, digital or otherwise, is occurring.
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In 2012, digital data collection moved from the margins to the center for the presidential campaigns. “While the media coverage is focused on rallies and the last-minute dash by Obama and Romney through seven swing states,” a reporter observed on the eve of the election, “the real work of the first ever billion-dollar campaign is being done behind closed doors.”
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Some, perhaps much, of the surprising ease with which President Obama won reelection despite historically unfavorable metrics has been attributed to his decided advantage over the Romney campaign in the underpublicized development of data collection and its effective utilization. Although both sides fought to a draw with their carpet-bombing of TV political ads,
Politico
tech reporter Jennifer Martinez wrote, “Obama's treasure trove of data helped give him a notable edge over Republican Mitt Romney.”
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It was striking that when Tim Dickinson did his postmortem of the 2012 presidential campaign, his top six most valuable Obama operatives were the folks in charge of or directly connected to the digital operation; strategist David Axelrod and the traditional TV ad managers and pollsters followed them well down the list.
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Obama's Chicago-based campaign offices were dominated by his secretive analytics department, where hundreds of specialists crunched numbers. As one reporter who got an inside look put it, the football-field-sized office “looks like a corporate research and development lab.” The “Chief Data Scientist” of the Obama team was Rayid Ghani, an expert in artificial intelligence who came from Accenture Technology Labs, where he was a trail-blazer in consumer data mining for retail purposes.
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Ghani's directive “was to devise algorithms that could sift through the massive amounts of data collected by the campaign,” as Dickinson put it. “If you used Facebook to log onto the Obama campaign's Web site, you revealed to them your entire social network.”
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Among other things, the Obama team consolidated all of its disparate databases from 2008 and placed nearly all of the material on the Amazon Web Services cloud, where Ghani and his staff could slice and dice the data as never before.
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“The biggest idea we brought to bear,” said Dan Wagner, who ran Obama's analytics team, “was integrating data and then acting on what it told us.”
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Obama's campaign also employed Blue State Digital—described as the “digital consultancy behind Obama's campaign” by the
Financial Times
—which also counts Ford and AT&T among its clients. Blue State Digital is a subsidiary of global advertising and public relations powerhouse WPP.
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The secrecy of the effort was such that we cannot accurately determine how much money the Obama campaign spent in this area—or what all the campaigns together spent. But we do know the Obama campaign cut no corners here. In 2008, the Obama campaign dominated Republicans on the burgeoning social media platforms, and that dominance on the increasingly ubiquitous Facebook, Twitter, and YouTube continued through 2012.
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But the campaign's 2012 initiative went much further. Obama campaign manager Jim Messina acknowledged that he made the 2012 analytics staff five times larger than the much-ballyhooed analytics staff in the 2008 campaign, because 2012 was going to be a “totally different, metric-driven kind of campaign.” When asked for any specifics about the data work before the election, the campaign clammed up. “They are our nuclear codes,” campaign spokesperson Ben LaBolt told reporters.
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Data accumulation and evaluation were the Obama campaign's Manhattan Project.

The Obama data operation took Schmidt's advice and drew heavily from private sector talent; one operative called the effort a $1 billion “disposable startup.”
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No, it did not cost $1 billion to create or run; but it got that sort of bang for the buck. That is what so intrigued corporate observers. The Obama campaign was not only joined to the corporate data industry at the hip; it also proved to have been the dominant partner in the relationship.
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“Until recently, everyone in politics thought the commercial sector knew better how to locate and engage with their customers, and tried to apply that to politics,” a reporter for Britain's
Spectator
put it. Experts believe “the Obama campaign has now leapfrogged the commercial world.”
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The morning after the election, Messina said of his high-tech staff, “Corporate America, Silicon Valley were knocking down the door trying to hire these guys.”
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As we note in
Chapter 4
, the Obama campaign won
Advertising Age
's “Marketer of the Year” award in 2008; by that logic the 2012 campaign seems a good candidate for marketer of the decade. Romney's campaign engaged in much the same activities. As the
Wall Street Journal
put it, both “presidential campaigns have gone further than commercial advertisers ever have in using online and offline data to target people.”
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Obama's campaign, by most accounts, just did more of it and was better at it.