What Cost Per Action advertising can do for the progressive movement

Recently I've been very interested in the concept of cost per action advertising.  I believe it could be a mechanism for sustaining the progressive blogosphere.  Briefly, cost per action (CPA) is an advertising model whereby advertisers pay publishers (e.g., blog owners) a certain cost for each time readers take some action.  In the world of online sales, CPA is extremely advantageous for stores, who can guarantee that their advertising dollars will result in a net profit - a store only needs to take care to set the cost for each sale to be less than the profit that sale yields, and it can guarantee something left over from each sale.  The advertising budget is completely self-sustaining.

In a highly action-oriented environment like the blogosphere, cost per action seems like an ideal model for both advertisers and bloggers.  Progressive bloggers are already exhorting their readers to take some action or another; why not get money for each action the readers take?  Of course, there are some limits on what kinds of activities CPA should not reward.  CPA shouldn't be used to incentivize people to register to vote or to actually vote, as that kind of activity will probably be considered illegal vote-buying; similarly, CPA shouldn't be used to incentivize any illegal or harmful activity.

Beyond those restrictions, there's a wide variety of political activities which cost per action could cover, if the proper mechanisms exist.  The most obvious ones are financial political activities, like donating to a campaign, buying something from a progressive company, buying progressive political merchandise, etc.  In these cases, the value derived from the action covers the cost of the ad, and the campaign, progressive company, or progressive organization always nets a profit.  Moreover, these kinds of transactions are completed online via a credit card transaction, so the advertiser gets immediate gratification.

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A Better Way.

Over the last few days, we've discussed cable advertising in political campaigns and how, too often it seems, Democrats and progressives aren't taking full advantage of its microtargeting potential.  The comments and feedback have been great and we've tried to answer many of your questions.  We hope today's post will answer others by taking a look at how campaigns can put cable to better use.  

Cable offers political campaigns an opportunity to target their voters geographically and demographically at a level that just isn't possible with broadcast television.  But just throwing some money at the top cable networks on the Interconnect is not taking advantage of cable's microtargeting potential.

Buying cable is not easy and it's not quick. It takes hours and hours of research and analysis to optimize a cable buy so that it reaches a campaign's targeted voters and is integrated with the campaign's other communications to those voters.  But when it's done right, it can save money and help turn out votes.

More in the extended entry.

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Waste, Waste, Waste

Media, Advertising, Television, Cable, Media Buying

Yesterday, we revealed the bottom line results, of our study:  if the Democratic organizations buying ads in three Congressional Districts (IA-01, KY-03 and OH-15) would have taken advantage of cable's microtargeting potential, they could have gotten nearly twice as many points on their cable buys at a savings of 30% or more - roughly $52,000 per week.  

Those savings were rooted in four types of waste:

1.    Geographic Waste  
2.    Network Waste  
3.    Programming Waste.  
4.    Frequency Waste.  

We'll take you through each one after the jump.

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Your Money and Your Votes

For most of the last 30 years, the conventional wisdom in political campaigns - at least at the federal level - was to spend most of the advertising budget on broadcast television.  It may have made sense when broadcast TV was the dominant medium, but it doesn't make sense today.  

The past decade has brought an explosion in new ways to communicate with voters that, combined with new technologies, has made it possible to reach specific, narrowly targeted voting segments. While online ads, mobile communication, and social network organizing all should be considered as part of a campaign's communication planning, one of the biggest shortcomings of Democrats and progressives (as described in yesterday's post) is their failure to take advantage of cable television's microtargeting potential.

A couple facts:  In 2002, for the first time, a bigger share of the TV audience was watching on cable than on broadcast. In 2006, 56% were watching on cable and just 44% on broadcast TV.

So why do so many political consultants continue to recommend that candidates dump most of their communications dollars into broadcast TV?  

More after the jump.

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Pssst ... Wanna Buy an Ad?

There really shouldn't be anything scandalous about buying ads for political campaigns.  But anyone who reads progressive blogs knows that there's a lot of concern about how it's being done by and for Democratic campaigns.

Matt Stoller invited us to post a five-part series, beginning today and continuing the rest of this week, to talk about one facet of media buying, cable TV, and to share our analysis of cable buying by Democratic groups in three hotly-contested congressional districts in 2006.  

The analysis begins after the jump.

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