Perils of political fundraising

As Conservative Party shadow Chancellor George Osborne last week fended off accusations about alleged fundraising tactics with a Russian oligarch, other Tories were putting in place their own, more reliable, strategy to boost the party’s electoral coffers.

The Conservative Party was last week poised to hire direct marketing agency Partners Andrews Aldridge to handle its direct account (MW last week) as they rev up preparations for a general election.

Given the increased importance of direct marketing in election strategies and party fundraising, the agency’s ability to reach out both to existing members and potential Tory voters in key marginal constituencies will play a role in deciding the next election. The agency will also help raise party funds through the Conservatives’ local and regional organisations.

Partners Andrews Aldridge boss Phil Andrews denies the agency is working with the Conservatives. “We haven’t agreed a brief or decided whether we want to do it. We are a long way off working with them,” he says. Anna-Maren Ashford, a former advertising executive at Rainey Kelly Campbell Roalfe/Y&R, who is the party’s brand communications manager, failed to return calls.

However, it is understood that the agency took poll position for the account after the Conservatives ceased talks with rival DM specialists Archibald Ingall Stretton and Meteorite. Interestingly, Partners is part-owned by Engine Group, whose leading ad man Robin Wight, chairman of WCRS, is a prominent Tory supporter.

Direct marketing can be a powerful electoral and fundraising tool, identifying voters and matching their postcodes with the issues most likely to be of concern, be it rising crime, unemployment or education. It can also help boost membership, a key source of donations.

Prospects can then be mailed with relevant communications in micro-groups as small as 15 households. In the 2005 election, the Conservatives hiked their direct marketing spend to £4.4m through agency Immediate Sales, a subsidiary of M&C Saatchi. IS boss Michael Moszinski says the direct campaign was successful in closing the gap between Labour and Conservatives. “They won the overall vote in England, which was quite an achievement, a big development on the 1997 and 2002 elections. The problem the Conservatives had failed to address was that for the tactical messages to be effective, they needed to change the brand.” He believes this task is being addressed under Tory leader David Cameron.

The 2005 campaign targeted direct mailouts with messages in the relevant regional press to promote five core messages. “We used concern about rising violent crime and highlighted the increase in each area a regional newspaper would cover,” explains Moszinski.

But it will take a lot more than a clever direct marketing strategy to swing the next general election for the Conservatives. They may be ahead in the opinion polls at present, but there is still plenty of time and scope to squander that lead. Last week’s unseemly allegations about George Osborne’s approach to Russian aluminium billionaire Oleg Deripaska begging him for a contribution to party funds, is an example of how desperate the main parties are for sources of funding and how far they are in thrall to the international rich.

Both Osborne and Labour business minister Lord Mandelson are squirming before the media as details of their relationship with the Russian aluminium tycoon emerge. A mutual friend of both politicians, Nat Rothschild, stuck the knife into his old pal Osborne last week, claiming that the top Tory had used an invitation to Deripaska’s yacht to plead for party funds.

Rothschild alleged that Osborne was accompanied by Tory fundraiser Andrew Feldman, who had suggested the Russian could funnel the cash through a UK subsidiary company to avoid breaching rules on foreign donations. This was denied by Osborne.

The whole affair has reinforced the impression that politicians are a star-struck fan club of the super rich, more interested in palling around with billionaires on luxury yachts than tackling the grubby issues facing voters. So political marketers will have quite a job ahead of them as they attempt to reconnect the electorate with politicians.

UK general election turnout has plummeted in recent years and politicians are looking enviously at the US presidential election to see how politics can regain its relevance. US Democratic candidate Barack Obama is pulling away from Republican rival John McCain in the presidential race and some predict he could win a landslide. If so, it will be hailed as the first presidential victory where the internet has played a major role in deciding the outcome.

Obama’s online onslaught has used everything from downloadable ring-tones to blogs and email updates from his campaign manager. He has some 1.5 million “friends” on his Facebook profile, compared with 142,000 for McCain. Of great significance is Obama’s fundraising from everyday people, which has far outstripped that which he could have extracted from corporate donations. This is something George Osborne and Labour politicians should bear in mind as they lick plutocratic boots in a desperate search for funding.

So could Obama’s internet-driven populism work in the UK? Some are doubtful. Guy Culshaw, planning director of Carlson Marketing, believes that UK leaders lack the necessary pizzazz, good looks and cool elegance of Obama, and any attempt to storm the internet will make them look like dads dancing at the disco. “Obama is new, credible and funky whereas David Cameron is an old Etonian. In some ways, Gordon Brown has a better chance of using the internet in a way that isn’t going to be ridiculed,” he says.

On the potential for direct marketing to swing the next general election, he points to George W Bush’s campaigns masterminded by Karl Rove, which used DM mailouts to target the concerns of voters in different postal areas. “You can re-engage those people in marginal seats by ranking the issues that are interesting for them using geo-demographic targeting. You can work out which issues are interesting for which postcodes,” he says. He points out that email lacks the ability to segment voters by address.

Meanwhile, Conservative supporter Jackie Stevenson, founding partner of the London office of US ad agency Brooklyn Brothers, says direct marketing is growing in political stature as the parties recognise the importance of understanding communities. “For every party there is a kind of grass-roots old school. The Conservatives have been good at keeping in contact with them, they have strong local groups,” she says, though points out that new members need to be targeted through online methods. One used by the Conservatives in the London Mayor’s election was Friction.tv, an online debating site. “The rise of the internet has completely changed the way politicians operate and the tools they can use, so getting to the heart of direct marketing is so important. Any DM agency worth its salt has to think about how they engage with consumers through multimedia,” she says.

Partners will play an important role in attempting to boost membership and donations to the Conservatives. But last week’s allegations about George Osborne will hardly endear the party to the electorate and can only damage any chances they may have of increasing grassroots donations.