National Journal: Vincent Harris Quoted on GOP Online Fundraising for 2016

National Journal
January 7, 2015
By Scott Bland

The party’s newfound digital savvy has opened new funding avenues for candidates, and they’re scrambling to tap into it.

Republican presidential candidates have already been on the hunt for millionaire political patrons for months. But many are also making quieter, serious investments in pursuit of small online donors—a group that, for the first time, could play a major role in deciding the GOP’s presidential primary.

With no clear Republican presidential front-runner, as well a bigger emphasis than ever on digital fundraising on the GOP side, candidates that can successfully harness that growing flow of dollars may end up better-placed to vault above the field. The new cash stream may enable some to survive without as many of the bundlers that traditionally power presidential campaigns, extend their efforts longer than in the past, and capitalize more effectively on the fleeting moments of stardom that strike in modern campaigns.

“This is going to be the first time in a Republican primary that there’s been a significant role for grassroots giving,” said Matt Lira, who was the deputy executive director of the National Republican Senatorial Committee in 2014.

Republicans, led by Mitt Romney, raised millions online in 2011 and 2012, but Romney’s financial advantage was so big that those donors mattered less to the outcome. They could have a bigger effect on the bigger GOP field this time, just as online giving did in the Democratic presidential primary in 2007 and 2008.

The GOP has put a new emphasis on improving its digital game, especially its email fundraising, and more of the party’s donors are giving online than ever before. Republicans have traditionally done a good job collecting small donations via direct mail, but email is many times cheaper. On top of that, an early start building an email list may be critical for whoever actually wins the nomination.
None of this is lost on high-profile GOP hopefuls including Sen. Rand Paul and Wisconsin Gov. Scott Walker—who are already laying the groundwork to cash in on the growing pool of digital donations.

“It’s vital, if you’re running to win the presidency and not just the nomination, it’s vital that any of these campaigns build a big list as soon as possible,” Lira said. “Hillary [Clinton]’s obviously got Ready for Hillary … and it’ll be too late to build a competitive list by the summer of 2016” to be able to match the small-dollar donations that Clinton would likely be able to pull in from the donor list the super PAC is gift-wrapping for her.

Multiple Republicans cautioned that big donors will likely still be the most important parts of campaigns’ early fundraising—not just because of their ability to finance super PACs but because that’s traditionally the easiest source of early money. Effective digital fundraising requires large email lists and typically ramps up toward the end of campaigns. But there is money to mine online if the right foundations are laid, and some candidates have already started building them.

“The right candidate is going to be able to raise tens and tens of millions online in their primary, and I think there’s multiple candidates who have that potential,” said Vincent Harris, a GOP digital consultant who worked with presidential campaigns in 2008 and 2012 and is now working for Sen. Rand Paul. “That’s a lot of money if you think it’s going to cost $40 to $60 million to get through the beginning of the primary as some are speculating. So it’s going to be a very important piece of this in terms of where campaigns are actually getting their resources from.”

Another strategist working for a possible presidential contender put the estimate in terms of successful candidates’ needs, not their capabilities. He said a viable campaign will need between $50 million and $75 million “by the time of the first couple of states”—and that campaigns will need around 10 to 15 percent of that to come from digital, which works out to at least $7.5 million to $11 million online by around February 2016. Another person said the share could approach 20 percent.

That is major money in the digital world. For comparison, Sen. Ted Cruz, whose grassroots appeal helped push him to the Senate two years ago, raised just over $2.9 million online in his 2012 Senate race, which was his first run for elected office.

How will they do it? “Every single one of these candidates, just like in 2012, is going to have their 15 minutes,” said one Republican digital director. “The key question is, do you have the infrastructure in place and the staff on hand to make money from that and extend the life of your campaign? A lot of candidates’ websites went down last cycle after doing well in Iowa or New Hampshire, which is appalling.”

“One of the biggest keys to raising money online is being able to bottle fire,” said Matt Oczkowski, the digital director for the successful reelection campaign of Wisconsin Gov. Scott Walker, whose conservative record has spiked national interest in him multiple times since he took office four years ago. “The first thing I did in August 2013 was building the infrastructure and having the pieces in place to be able to handle any volume of traffic to our site and also handle the daily churn.”

That early investment played a part in Walker raising more than twice as much online money for his reelection as he did in his highly publicized 2012 recall campaign.

For all of the candidates, the stage for raising serious amounts online will have to be set in the next few months, in terms of infrastructure, email acquisition, and other important first steps. “Candidates who are investing in it early are going to be able to reap the benefits,” said Alex Skatell, an experienced Republican digital operative, in a December interview. (His firm just started working with former Florida Gov. Jeb Bush’s PAC.) A candidate’s appeal won’t be worth as much to his campaign without the necessary infrastructure. And some in the party wonder whether there are enough digital construction crews to go around ahead of a wide-open primary.

Walker’s 2014 team said having an internally run digital department is a huge boon for a major campaign. “The main differentiator, I think, is who can build this in-house?” Oczkowski said. “There’s a bunch of really good vendor networks out there who run things back through their companies, but there’s a lot of issues with that. Businesses are for-profit entities … and having a team in-house focused on the daily job of getting a candidate elected is a whole different ballgame.”

In one example, Oczkowski and his team made their own donation software, which saved them six figures in vendor fees and allowed them to redesign the donor portal on Walker’s website in a way that boosted online giving rates by 10 percent.

“I think it’ll be very difficult in this timeframe to find and bring a team in-house,” Oczkowski continued, noting that the expense sometimes scares campaigns off that approach, too. “It’s a scary and big investment, but at the end of the day … it yielded extremely good results.”

THE PLAYERS

Ted Cruz, whose 2012 campaign leaned heavily on digital and whose publicity-generating moves in the Senate have continued to grow his email list, is just one of several Republicans who have already laid serious digital groundwork ahead of a possible presidential campaign.

Rand Paul, whose father was one of the GOP’s earliest adopters of online fundraising, has also demonstrated grassroots digital reach. In 2013 and 2014, Paul’s campaign committee raised more money from unitemized small donors—over $3.2 million—than any Republicans actually running for Senate in the last election, and Paul did that without spending exorbitantly on direct mail solicitations, suggesting online comprised a major chunk of those receipts.

“I would say the Paul organization is probably the largest online fundraising base of any individual Republican candidate, Senate or governor, in the country, maybe except for Mitt Romney,” Harris said.

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