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Ad tech firms rush to DC

News, 18 November 2015

WASHINGTON, DC: Next year's US presidential election is expected to see significantly increased spending on digital advertising, but insiders have suggested some of the ad tech firms descending on the nation's capital are likely to be disappointed.

"The number of third parties setting up shop is crazy," said Zac Moffatt, CEO of Targeted Victory, a Republican digital media-buying agency.

"There are a lot of leases being taken out, but I'd be concerned," he told AdExchanger. "Some of those offices are going to end up with tumbleweed blowing around."

Despite the fact over $1bn is predicted to be spent on digital marketing by political advertisers in 2016, he maintained, "There's a disconnect between the number of people trying to get in the door and the size of the market as it currently exists, and that's going to be a tough squeeze for some people."

On the Democrat side, Nate Lubin, the 2012 digital director and, until recently, director of digital strategy at the White House, questioned whether some ad tech vendors were suitable to operate in the political space.

The way campaigns are structured – around fundraising, volunteering and get-out-the vote drives – does not necessarily lend itself to the latest marketing technology, he suggested.

Another difference highlighted by AdExchanger is the relative centralisation of party machines.

Thus, Democrats tend to see more advertising resources channelled through the candidate's campaign, while on the Republican side, more goes through fundraising committees known as super PACs.

And there is also the legacy of 2012 to consider. "Data and optimisation was a pillar of the Obama campaign, and that's been baked into the whole organisational structure on the Democratic side," said Lubin.

There is no such continuity on the Republican side, however, where Moffatt faces a struggle to divert spending from television into digital channels.

"Campaigns and political groups still haven't fully embraced digital media," he said. "They'll use DoubleClick, Facebook, platforms they can't do without, but others are going to have to find new ways to demonstrate ROI."

Data sourced from Ad Exchanger; additional content by Warc staff