Campaign Finance Reform Could Bolster Political DM

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Direct marketers and political groups expect that the campaign finance reform bill signed into law by President Bush last month will give a boost to political direct marketing, especially direct mail.


The Bipartisan Campaign Reform Act of 2002 outlaws "soft money" contributions -- which have no dollar limit -- beginning Nov. 6, 2002, the day after Election Day. Effective Jan. 1, 2003, it doubles from $1,000 to $2,000 the "hard money" an individual can contribute to federal candidates during one campaign. With the ban on soft money donations, political fundraisers are expected to place more emphasis on larger numbers of checks for smaller dollar amounts.


"The value of those $100, $200, $300 contributions will become even more important, and direct mail will be an even more important source for getting these contributions," said Mark Micali, vice president, government affairs, the Direct Marketing Association.


Both major parties, for example, have been aggressively building their lists of potential hard-money contributors.


"We've known this could be coming," said Tovah Ravitz-Meehan, a spokeswoman for the Democratic Senatorial Campaign Committee. "We hired a fund-raiser that does small-dollar fund-raisers in [Washington]. We're improving direct mail and doing other things."


The parties are also trying to make better use of Web sites and e-mail to reach far more potential donors at far less expense, and engage supporters in grass-roots campaigning at the same time.


Though the donor universe is still small, e-mail is emerging as an effective fundraising vehicle, said William Greene, president of Strategic Internet Campaign Management Inc., Atlanta, a recently launched conservative fundraiser.


"We expect to see more e-mail activity" as a result of finance reform, he said.


The universe of conservative e-mail addresses -- available from, for example, ConservativeHQ.com, NewsMax, WorldNetDaily.com -- is 600,000 to 1 million. As a result, selecting known donors, as is commonly done offline, results in lists that are too small.


"However, because the cost of e-mail is so low, the return [on blasts to every known conservative] is relatively high," Greene said.


Mailings to conservative e-mail lists generally garner a 2 percent response rate and an average donation of $30 to $40, slightly higher than that of direct mail, he said.


"I think it's because people use credit cards online, [making it easier to impulse donate a larger amount]," he said.


The law also is expected to affect television advertising and telemarketing. It prohibits television "issue ads" that name a candidate in the final days of an election. Though there is speculation that this part of the law may be struck down as unconstitutional, if it is continued, issue groups most likely would increase their use of direct mail.


"[This part of the] law will be a [boon] for direct marketers," said Hal Malchow, vice president, creative development and targeting at Crounse, Malchow, and Schalckman, a Washington-based mail firm that works with Democratic candidates and causes. "The law, for example, limits issue advocacy expenditures by nonprofit interest groups, but the expenditure it limits are broadcast expenditures. So, groups like the AFL-CIO and the Chamber of Commerce who might go out and purchase lots of issue advocacy television ads in the 60 days approaching the election are now prohibited from doing so, but they are not prohibited from sending mail and making phone calls."


Malchow said many of his clients are nonprofit advocacy groups, "and almost all of them use a mix of both mail and phones and television, and perhaps some radio. But what is going to happen [when the law takes effect] is that a bigger percentage of their advertising dollars will go into the mail."


Other organizations are sitting tight for now.


Kathy Roder, a spokeswoman for the AFL-CIO, said "it's a little too soon for us to say exactly what campaign finance reform is going to mean. But we already communicate with our members through direct marketing, and it will continue to be an important vehicle for us."


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