The Business Of Politics - Startups With A Political Agenda

Submitted by Dmitri Davydov on Mon, 2008-03-31 11:33.
Posted in:
Michael Berkley likes to joke that he is responsible for Sen. Hillary Clinton's March 4 presidential primary wins in Texas and Ohio.

Berkley is the chief executive of SplashCast Corp., a start-up that builds advertising campaigns around social media widgets than can spread virally through the Web. And, it just so happens that a group of Clinton supporters launched a Web site the week of the primaries using SplashCast technology.

Hundreds of videos were uploaded to HillarySpeaksForMe.com, a site that uses Splashcast to allow users to post short videos on why they support Hillary Clinton. The videos can then be added to social networks like MySpace and Facebook. More than 1,200 videos have been uploaded, attracting 2.5 million hits on the Web site.

Berkley said he is now in talks with Sen. John McCain's campaign for a similar effort.

SplashCast's success highlights how several venture-backed companies are finding business with political campaigns which are reaching beyond the emails and cellphone text messages employed in years past. With political advertising spending estimated to reach $3 billion to $5 billion this year, start-ups are looking for a piece of that ad spend and a way to bring attention to their technologies.

Online ad agency Spot Runner Inc. is announcing today it has launched a political advertising platform that leverages the Internet and new technologies to allow candidates and cause-related initiatives to run highly targeted ads on TV, radio and online.

Founders Nick Grouf and David Waxman were inspired to create Spot Runner after working on John Kerry's 2004 presidential campaign, where they realized the barriers for candidates to get a message aired on television.

Producing a commercial can cost tens of thousands of dollars at a local level, not including the cost of air time. And, picking the right media outlets to spread a message can be a guessing game.

Spot Runner has created an extensive library of pre-produced political commercials that span a variety of issues. Each ad is personalized with the campaign's images and messages and a new voiceover. Ads also can be turned around in a day or two, allowing campaigns to react immediately to local or competitive issues. The company also offers fully customized ads using the candidates' own footage or contributions from Spot Runner's creative team. Fully customized ads typically run from $499 to $2,000, not including the cost of the media buy.

The company says the most popular categories of ads thus far have been about leadership, education, taxes and get-out-the-vote.

Rosabel Tao, vice president of corporate communications for Spot Runner, said if a candidate with a strong message on health care wants to broadcast a message to senior citizens who have voted Republican for the past three elections in a group of specific counties, Spot Runner can quickly identify the best media buy.

Media plans are created using Spot Runner's proprietary Geo-Voter Targeting process, which combines political district maps with local television targeting opportunities, voter and donor data, and detailed demographic and psychographic data relevant to candidates' campaigns. The ads are then aired locally, statewide or nationally on popular networks such as CNN, CNBC, Fox News, MSNBC and CBS.

"Political advertising is moving toward microtargeting," Tao said. "Whether you're running for sheriff or president, it's all about microtargeting. It's democratizing the election process. Technology is becoming the great equalizer."

To help understand what is most valuable to political campaigns, Spot Runner turned to political media strategists representing both major parties for their expertise. They also brought on a political advisory board that includes former Sen. Bill Bradley and veteran political strategists Mike Murphy, Dan Schnur and Bob Shrum.

Attention to start-ups like Spot Runner and SplashCast is good news for investors who hope the companies can parlay strong numbers during the political season into more work in the future.

Los Angeles-based Spot Runner has raised $60 million from a wide syndicate of investors including WPP Group PLC, Interpublic Group of Companies Inc., CBS Corp., Allen & Co., Tudor Investments, Capital Research and Management, Index Ventures and Battery Ventures, as well as individuals including financier Vivi Nevo and Lachlan Murdoch, the son of media mogul Rupert Murdoch, owner of News Corp., the parent company of VentureWire publisher Dow Jones & Co.

Portland-based SplashCast has raised $4 million from advertising veteran Mark Bayliss and Emergent, an emerging growth investment fund also with strong ties to advertising and consumer brands.

A number of other start-ups are also trying to cash in on the elections. TubeMogul Inc., an Emeryville, Calif. provider of video distribution and analytics technology, is working with Sen. Barack Obama's presidential campaign. Video production and distribution service Next New Networks Inc. is home to online video channel Barely Political, which created the "Obama Girl" video praising the presidential candidate. And Ustream.tv Inc., a live online video broadcasting platform, was adopted by Clinton, Obama and former candidate Mitt Romney to broadcast rallies and other events.

Reshma Saujani, a 32-year-old attorney in New York who is one of the brains behind the Hillary Speaks For Me campaign, said when she stumped for candidates during the 2004 election, the extent of technology used was email and cellphone text messages. She said this election is all about the social Web and online video.

"I think people will look back and talk about how Hillary Speaks For Me and other technology really impacted the election," Saujani said.

[Via - StartupJournal.Com]

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