What are the lessons to be learned from the Obama campaign’s use of social networking software to mobilise supporters and raise $650 million?

THE SUCCESS OF BARACK OBAMA has been attracting world attention because he will be the first African-American, indeed the first non-white President of the United States of America. Some attribute his success to his opposition to the war in Iraq; others to the dreadful meltdown of US financial institutions that galvanised the American electorate in September. And many people to whom I have spoken since 4th November, and many public commentators besides, paradoxically regard Obama as a doomed man for those very reasons. It may be that his hands have been tied, his chalice poisoned. He will inherit two problematic and unpopular wars, a ten trillion dollar national debt, a growing energy crisis, an economy sliding into recession and, of course, his own commitments to cut taxes.

Many who voted for the largely unspecified ‘change’ promised by Obama may come to be disappointed. If he is forced to govern in financially conservative ways, which seems likely, the honeymoon may be a short one. Relations with the rest of the world may be just as fraught with dilemmas. If he can’t cut taxes and he can’t cut spending, he will have to resort to the third instrument: the printing press. Paying off your foreign creditors by printing dollars, provoking inflation and a drop in the value of the dollar so that those creditors lose half the value in real terms of what they loaned to you, is not a good way to make friends abroad. A cheaper dollar also hurts those countries which rely on the American market.

Obama’s amazing money machine

The my.barackobama.com Website

The my.barackobama.com Website

Probably the most amazing feature of the Barack Obama campaign is the way he was able to come from a starting position right outside of the Establishment, yet build a huge political machine, and raise a phenomenal war chest: an estimated total of $650 million, according to Richard Lister of BBC News. Which was a necessity, because Obama had to fight not one expensive campaign, but two. The Clinton camp in the Democratic Party machine had a virtual monopoly of all of the party’s big-money donors and fundraisers, and during 2007 had amassed about $100 million.

According to a fascinating article by Joshua Green in The Atlantic magazine dated June 2008, Obama’s initial financial support came from a hitherto untapped source: hi-tech Northern Californian Democrats who were software entrepreneurs and venture capitalists, adept at networking, and at ease with the Internet technologies that support it.

Mark Gorenberg, a partner in a San Francisco venture capital firm, got into political fundraising in 2003, to support John Kerry’s bid for the Democratic party nomination. He got friends and colleagues to commit not just to making a personal donation, but more importantly to commit to raising a certain amount from others. In the same year, Howard Dean’s supporters pioneered the use of the Internet to raise large numbers of small donations, such that before long he had out-fundraised both Kerry and Edwards. Dean’s team also pioneered the use of social networking sites for political organising, making use of sites like MeetUP.com to bring local activists together.

A few days before Obama declared his candidacy, there was a fund-raising dinner held for him in Northern California, hosted by John Roos and attended by Mark Gorenberg and Steve Spinner. It seems that the Clintons had overlooked the potential for Democrat financial support from the rich young Silicon Valley entrepreneurs, who in any case were readier to click with Obama. Gorenberg joined Obama’s national finance committee and was delighted to find that the campaign was ready to embrace new ideas about how to build networks and communities with online tools. Spinner also joined, and took the initiative to found an online affinity group, ‘Entrepreneurs for Obama’. Obama spoke to the network by videoconference, and soon it was raising big bucks.

My.BarackObama.com

But central to the success of the Obama campaign has been the site My.BarackObama.com, created along social networking lines. Indeed, Facebook co-founder Chris Hughes took a sabbatical from his company and came to Chicago to work on the campaign full time. Joe Rospars, a veteran of the Dean campaign who had in the meantime set up an Internet fundraising company, joined as head of new media for the Obama campaign.

The Atlantic quotes Rospars as explaining the rationale behind My.BarackObama thus:

We’ve tried to bring two principles to this campaign. One is lowering the barriers to entry and making it as easy as possible for folks who come to our Web site. The other is raising the expectation of what it means to be a supporter. It’s not enough to have a bumper sticker. We want you to give five dollars, make some calls, host an event.

People who signed up at My.BarackObama.com could register to vote through the site, and could set up their own personal affinity group with a listserv, to lobby their friends and associates. They could hit a ‘Make Calls’ button and get lists of phone numbers to call. They could set up their own personal fundraiser page, set a target with a ‘thermometer’ to display progress, and set to work raising money for the campaign. It was the Howard Dean approach, but with new tools and a tech-savvy team; the site attracted more than three million donors and fundraisers.

Spending their way across the nation

Accumulating huge amounts of money, much of it in ten- and twenty-dollar amounts, has been proved capable of outweighing the old model of political fundraising. The first sign of this came after Super Tuesday, when the Clinton campaign ran out of money. Meanwhile Obama’s campaign was rolling in cash. He went on spending on advertising, winning the next 11 primary contests.

When it came to the presidential election, McCain was hampered by having chosen to accept federal campaign funding: as a condition, he had a cap imposed on his spending. Traditionally, there are Democrat states and Republican states and relatively few swing states, and the parties focus their attention on campaigning in the swing states and to a lesser extent in their ‘safe’ states, ignoring the rest. But the Obama-Biden campaign had the money to put paid campaign workers into every one of the 50 states. They bought television advertising nationwide, too — culminating in the 30-minute advert that aired at eight in the evening on 29 October on NCS, CBS, Fox, Univision, MSNBC, BET and TV One, gaining an estimated 30.1 million viewers.

This, then, is to my mind the most interesting part of the Obama campaign: Politics meets Web 2.0, achieving unprecedented engagement and partipation, unprecedented fundraising, and an unprecedented nationwide media campaign, substantially extending the Democrats’ demographic, and advancing victory into states such as Virginia that had not voted Democrat for 40 years.

So, what next?

I started this post by noting what a sticky situation Obama is going to be in when he enters the White House in January. Is there anything he can do that will be different, unexpected? Might he make use of the 3-million-strong network of contacts and supporters that was built to get him to victory, or is it destined to fall away and burn up like an exhausted first-stage booster rocket, no longer needed?

I am intrigued by the text message which Obama sent out to his supporters, shortly before making his acclaimed Election Night speech:

I’m about to head to Grant Park to talk to everyone gathered there, but I wanted to write to you first.

We just made history. And I don’t want you to forget how we did it.

You made history every single day during this campaign — every day you knocked on doors, made a donation, or talked to your family, friends, and neighbors about why you believe it’s time for change.

I want to thank all of you who gave your time, talent, and passion to this campaign. We have a lot of work to do to get our country back on track, and I’ll be in touch soon about what comes next.

So — what comes next?

References

‘The Amazing Money Machine – How Silicon Valley made Barack Obama this year’s hottest start-up’ by Joshua Green
The Atlantic, June 2008.
(Online version)

‘ The Howard Dean Nominee’ by Steve Kornacki
The New York Observer, 26  June 2008.
(Online version)

‘Why Barack Obama won’ by Richard Lister, BBC News, Washington
BBC News online, 5 November 2008