Australian Financial Review, October 26 2017
In this series for The Australian Financial Review, I will explore the corporate campaign model which is used by a group of close fellow travellers: unions, GetUp, environmentalists and industry super.
It is an explanation of the financial, tactical, data and "on the ground" advantage enjoyed by the modern left at a time where every debate on the role of government, taxation, regulation and even free trade is contested.
Unless the political right and business can counter and ultimately get ahead in the financial, technological and tactical campaign race, too many wrong decisions will be made, red and green-tinged governments will be elected and all Australians will be poorer.
This article looks at the growth in assets and the focus of expenditure.
Former British MP and chick-lit author Louise Mensch said: "money gives you the power to do whatever you want to do. I like the idea of being in complete control of my life."
Australia's well organised opponents of enterprise live this credo every day.
They are relentless in using an estimated $200 million per annum more than the business lobby to further boost their campaign advantage over their business opponents and centre right political parties.
Data is king and the modern left has mastered the use of this modern magic. Data is used to drive political agendas without many people realising. Companies like Google or Facebook that collect data know more about you than you know about yourself.
The money which drives investment into campaign technology will only grow. Menzies Research Centre calculations show the gap will grow by another $100 million in the next decade to a gap of $300 million.
"Grassroots" fronts such as GetUp are small beer compared to the big two activists: industry super and environment groups.
Industry super is an unbelievable case in point. $50 million has been paid into unions from super funds over the past decade.
This is expected to grow to $22 million each year within a decade. This will not change unless Parliament enforces proper governance and competition requirements in superannuation.
As canvassed in the first piece in this series, environmental groups, undertaking naked political activity, spent over $80 million on campaigning in 2015-16.
With their deductible gift recipient status now under threat, they might get back to conservation, not politics.
What these organisations do with their money is just as important to understand. The cash is typically ploughed into direct, not indirect, communication with voters/customers.
Their use of resources to invest in relationships with consumers is the opposite orientation of industry associations representing business.
Business advocacy groups are designed to influence Canberra and the media by focusing their efforts on the big national clearing houses such as newspapers, radio and the ABC.
Almost all business advocacy is therefore indirect.
Almost all anti business advocacy is direct to consumer. For example, GetUp focuses on direct engagement with people either physically on the street or through rallies, or online through Facebook.
The anti-business brigade has thus adopted a favourite tactic of Paul Keating and John Howard – direct dialogue with voters. In the 1980s and 1990s it was talkback radio which allowed the politicians to go "over the top" of the Canberra press gallery.
Today, social media delivers the same option with better targeting thanks to data.
Business' engagement in social media is instructive. Vast resources are spent by listed entities to build up Twitter and Linkedin profiles. With some notable exceptions, the weight of social media effort has gone into business to business focus.
The trouble is their better resourced opponents are adept are going direct to consumer.
GetUp, industry super and environment groups also talk to the media but their fundamental disposition is to deal directly with consumers.
GetUp have half a million followers on Facebook. That's where you want to be if you're in the direct-to-the-punter game.
There is no more intimate communication platform than Facebook. You like "a page" such as GetUp, and they can talk to directly on your newsfeed when you're anywhere in the world with your smartphone.
It literally follows you around.
The organisation which is being "liked" is also given a treasure trove of data about the community of people that have clicked 'like'.
For political and now business campaign purposes, data is king. Facebook provides age, gender, location and potentially a bunch of other data points such as other interests to "liked" organisations.
This is incredibly valuable because it permits direct targeting of voters based on their interests and preferences as collected in real time. This is exponentially better than running a $2 million TV advert during the 6pm news which is simply a scattergun approach.
Few people realise that every time they 'like' or interact in any way with anything on Facebook, they are creating a rich footprint for advertisers.
As canvassed in Scout in February, since 2012, it has been possible to "(correlate) subjects' Facebook Likes with their OCEAN scores – a standard-bearing personality questionnaire used by psychologists – to identify an individual's gender, sexuality, political beliefs, and personality traits based only on what they had liked on Facebook."
"…with a mere ten 'likes' as input a model created (by former Cambridge University director Dr Michel Koisinski) could appraise a person's character better than an average coworker. With seventy, it could 'know' a subject better than a friend; with 150 likes, better than their parents. With 300 likes, Kosinski's machine could predict a subject's behaviour better than their partner. With even more likes it could exceed what a person thinks they know about themselves."
The upshot of this is simple: targeting of adverts on Facebook based on the rich data means there are hundreds of micro campaigns starting or taking place in Australia at any particular moment.
Simon Kuper explained the changes and capacity of Facebook in the Financial Times in June:
"Until about 2012, Facebook kept ads separate from user content and shared little user data with marketers. But then it floated on the stock market and investors demanded more ad revenue, especially from smartphones.
"Now ads appear in the user's feed, amid media news items and updates from friends. Many users don't even realise an ad is an ad. By now, Facebook knows everything about its users (which means most inhabitants of western countries). You may be living as heterosexual but it can deduce from your tastes that you're gay."
Patrick Gorman, the man who successfully ran the Western Australia Labor election campaign in March, told a social media gathering Labor promoted one of their election policies to bring UFC – the global cage fighting competition – to Australia.
"We could target our policy on that to people based on their liking of ultimate fighting, So the Hulk or other mixed martial arts players and it didn't get to any of the rest of you in the room."
Gorman's bragging demonstrates the dividend that's accruing to organisations which have invested in Facebook.
In political terms, election campaigns are no longer just about the national (or state) message.
Trump discovered this last November. As Martin Moore of King's College Media Centre explained in the Guardian just after the election: "They [the Trump campaign] were using 40-50,000 different variants of ad every day that were continuously measuring responses and then adapting and evolving based on that response."
Trump used an organisation known as Cambridge Analytica, its CEO Alexander Nix has a message for Australian business:
"It's by understanding what individuals care about and what motivates them that campaigns can become genuine grassroots movements. Organisations will have to get better at harnessing data. This will not only empower campaigns while lowering costs; it also empowers individuals, as campaigns become more responsive and take more of a 'bottom-up' approach, rather than a 'top-down' one."
In Australian parlance, anyone who wants to win an argument will target or perish.
This is the message from Crosby Textor's Australian CEO Yaron Finkelstein who told me: " A couple of tweets and an opinion piece drafted by your PR team won't cut it". If you're not engaging directly with the community and voters about your issue, be prepared to lose the debate. Your opponents are doing it every day and in turn using them to persuade governments to move against you."
The idea of flying blind with mass TV and newspaper advertising is simply passé.
One big difference between the United States and Australia is our approach to privacy legislation. Australian privacy restrictions may make it hard to replicate the detailed data picture of voters / consumers as is possible in the United States. Nix told me:
"Individual level consumer and lifestyle data are commercially available in the United States, and are widely used for marketing and political outreach. In Europe and Australia however, legislation regarding the use of data is different. For this reason, our work outside the US often focuses on helping clients extract value from their own first party data sets before exploring to what extent third party data is available and legally permissible for use."
Translation: start collecting your own data.
The data business legally collects will be an important input into a framework that business should already have in mind.
The upshot of this is that every organisation wanting to have an impact on public opinion should apply a framework of three questions:
1. Who do we need to influence?
2. What are their interests, issues and concerns?
3. What is the best platform to engage?
The persuasion framework applies equally to business as it does to politics. Given business has been on the losing side of rational arguments on taxation, industrial relations, trade and investment, leaders should spend more time thinking about these questions.
Many leaders respond to an event rather than driving a framework. The corollary is an executive will invest in data and information technology systems without answering these fundamental questions.
Too many executives purchase solutions to other people’s problems rather than their own. Beware the salesman!
By answering the three questions above, many data inputs are required.
On point one, much of the answers will come from commissioned or public polling.
Better understanding people comes from a range of sources such as Facebook and Google buttressed by deeper market research and publicly available data. It may involve buying specialised data sets from developers of IPhone apps.
Information to answer point three comes from advertising agencies, social media and more surveys.
The range of inputs mean we are no longer talking about a simple customer relationship management or CRM system.
Once each question has been furnished with the data, we are in business and can start a targeted campaign.
Rest assured your anti business opponents are working on it now.