The State of Digital Fundraising – Mike Hahn

Mike Hahn:

We're entering the end of an era and beginning of a new era.

Eric Wilson:

Welcome to the Campaign Trend Podcast where you are joining in on a conversation with the entrepreneurs, operatives, and experts who make professional politics happen. I'm your host, Eric Wilson. Our guest today is Mike Hahn, the president of Digital Strategy and Operations at Frontline Strategies. In the 2022 Cycle, he was the deputy digital director at the NRSC and is an alumnus of the Trump 2016 and 2020 campaigns where he was the director of social media. In total, Mike has raised well over a hundred million dollars online for various groups, and I expect he'll be updating this total for 2024. In this episode, we're digging into the initial learnings about digital fundraising in the 2024 cycle and what the future looks like for the grassroots fundraising space. Mike, going into 2024, there was a lot of conversation about we've got to treat donors better, we've got to treat them with respect. And I think this all emerged from the idea of people are tired of the text, they're tired of all the emails. I'll say from my perspective, I didn't notice much of a change. I don't know if you did either. Why is that?

Mike Hahn:

It's a good question, and there's been a lot of chat this cycle about, well, how do you actually treat these donors better heading into future cycles and the end of the cycle when they're really getting bombarded with texts and emails? But it's funny, I was actually having a conversation with someone last week and the fast pace of our industry, it's kind of an inherent curse in a way where we are churning and burning donors so drastically that our tactics shift cycle to cycle. And we don't necessarily have the luxury of direct mail or some of these slower programs where we are consistently always having to react to breaking news and getting in front of donors as soon as possible and trying to beat out competitors. And I think as we head in 24, we're going to start to see some new approaches. I think better segmentation for one, starting to rely on donors that we know are going to donate and push out donors that we learned this cycle may not want to be hit as much as they were, but it's kind of hard to foster these long-term relationships with these donors.

I don't want to say it's impossible, but it's very hard to do and I think it overlooks the fundamentals of what digital actually is. It's very fast paced. We have to capitalize things on things as soon as they happen. And I am trying to remind my colleagues that we're not, like I said, we're not direct mail for a reason. Not to say that our donors shouldn't be treated with respect, but there's certainly different approaches that we need to take. And I think we also forget that we are still a very new industry. We really only been around for a little over 10 years at this point. So every cycle's a learning experience and we're really just unique industry.

Eric Wilson:

And one of the really interesting threads that's come out of 2024 is that the Democrats outraged us. Again,

This is something that worries me every time of we certainly would rather have more money than less, but the Democrats out raised this both at the top of the ticket and down ballot, but it doesn't seem to have mattered in the macro. Now, in those close races where we may have lost by a few thousand votes, maybe some more money would've been helpful, but we were swamped. Where does grassroots fundraising on the right fit in with our overall strategy going forward? Is it the kind of thing, do we just put up our hands and say, look, they're always going to out raise us. Nothing we can do about it, we shouldn't worry about it or is a different approach?

Mike Hahn:

I think there's a lot of questions as to how ActBlue is set up to skew some of these numbers, but I think that's a conversation for another time. But in terms of the down ballot candidates, the congressional campaigns, the leadership hacks, those are my personal bread and butter. I love working with those. And what I love when the congressional campaign comes to me, they've never done digital and they think they need to solely raise money within their district run ads within their district and target the people in their state. And what they're forgetting is that they are going to Congress, they're going to have a national voice, they're going to be on national news and talking about things that affect the entire country. And I think getting them to think more big brained in terms of no, I could actually fundraise outside of my state and outside of my district and get national dollars because my goal was to become a household name and draft policy and support policy that's going to affect the entire country.

So we had our frontline, we had Ryan McKenzie just won in Pennsylvania, seven. We took his message national and he raised money from donors all across the country and it really helped his bottom line. But flipping a Democrat seat held by, I think it was for six years by the incumbent, that resonates nationally. Someone in California certainly cares about that because now the house is going to be in Republican control and it's going to help President-elect with his agenda. So make a long story short, I think campaigns really need to start taking their races national and realize that as much as they care about the people in their district and their state, that their messages resonate outside the district and with the whole country. And that's going to certainly help them raise more money. And it's kind of taken a page out of the Democratic playbook as well. They're very good at fundraising across the entire country on issues that are really going to affect all of us.

Eric Wilson:

And that goes to a point you were making earlier, which is this is more of an evolution beyond direct mail. So the idea of direct mail is you find who those Republicans are in your district that are willing fund campaigns, you get their addresses and you send them letters. Digital fundraising started out like that of, okay, we're going to do direct mail fundraising tactics online. And I think you're hitting on a point here, which is we are trying to reach a different type of donor. They're motivated by the strategy by knowing who are those swing seats and how are we going to make the majority? And thinking about that, the problem is competition. And so for the last 4, 8, 12 years, we've been competing with President Trump as a national fundraiser. And this is a point that our colleagues who you go back to the 2012 race, you had MIT Romney who he was only competing with MIT Romney for online fundraising. Now when you take that race nationally, you're competing against the president right on down to those local candidates. So with Trump, we don't know what he's going to do, but with Trump not being an active candidate, do you think that competition is going to make it easier or will that make the competition easier for down ballot campaigns? A

Mike Hahn:

Million dollar question, right? So after 2016 and 2020, shameless plug to Brad Parscale and Gary Kobe, who were two of my mentors, they really transformed the digital landscape. And not only was President Trump competing with just himself on digital, but there were multiple down ballot races, pacs C3 C fours that came on scene. And then you had the creation of Win Red just prior to 2020, which really got everyone galvanized to start online fundraising. And it just became crazy to say the least. And of course the biggest vacuum in the space was the Trump campaign and operations regarding the president, and I don't want to say sucked up most of the money. They certainly earned it. They had fantastic tactics, but they were a very loud noise in a room of many people, if you want to put it that way. So what do I expect going forward?

I think we have four years of continued Trump messaging with him in the White House. I'm sure the Save America leadership hack will certainly still be fundraising, although I don't think to the scale as the last three presidential campaigns were, I will certainly expect down battle candidates to still echo Trump's sentiment and fundraising tactics. But really we're entering the end of an era in the beginning of a new era where we are not going to really have to compete all that much with the Trump fundraising apparatus. And I certainly expect that to have a positive effect for the down ballot candidates because for years we've been able to train our data segment, our data, learn messaging, learn copywriting tactics that have really resonated well with these donors. And if they're getting less texts, less emails from the Trump campaign and more from down ballot races and they're hitting the right messaging, then you're going to see a positive effect. So I'm really excited about what the Trump era ushered in for future races in the digital space.

Eric Wilson:

And obviously the supply of solicitations from Trump to donate are going to go down.

Mike Hahn:

Sure,

Eric Wilson:

We don't know what that's going to do for demand. Are people still going to be engaged or because Trump's won and do they go away? And so that's a big question. What do you think happens to Trump's donors in his list? Do they stay engaged? Does the list stay active? Is it something that we're going to see relied upon for the midterms in 2026?

Mike Hahn:

I think talking to some of the folks over there, even though they're just a week out, I would be shocked if they didn't use that list to help out in the midterm fight, making sure we're delivering a Congress that is fully in Republican control for the president to finish out his last two years and get his agenda through. So I'd be shocked if they didn't use their data for that purpose. One of the good things, maybe bad things about the digital space is that there is a ton of overlap with the down ballot candidates and the Trump list. So these folks are going to continue to get texts, they're going to continue to get emails, whether they're on the Trump list or not. Basically if you're on a congressional candidates list, you're on the Trump list, put it that way. And depending on the type of donor that you are, you're going to continue to see solicitations and whether you give or not, you'll be segmented into the proper channels. But I wouldn't expect if you've donated to the Trump campaign or if you've received a Trump email or text within the last eight years that you're going to see a slow down from either the Trump side or down the candidates.

Eric Wilson:

Alright, so no rest for the weary in that regard.

Mike Hahn:

Maybe the rest of the year, but starting in January, make sure your phone's charged.

Eric Wilson:

Got it. You're listening to the Campaign Trend podcast. I'm speaking with Mike Hahn from Frontline Strategies about digital fundraising and what the Republicans victory in 2024 means for that industry. So I want to shift our focus just a little bit, Mike, because obviously there were trove of stories there at the end of the race about people getting bombarded with texts. I learned about an app last week and pay them $10 a year and they'll stop all political text messages from getting to your iPhone. I think they should have done better marketing because they would've had more sales earlier in the year. Saturday Night Live made jokes about it. All of the late night shows made jokes about it. There were even some tragic stories about people losing life savings to fundraising because they're suffering from dementia and didn't remember that they donated it. Sure. Seems like there's a momentum for something to happen. So what do you think we might see in terms of regulation around online fundraising? I think data privacy regulations are going to continue to be a thing. What does that look like? What sort of keeps you up at night?

Mike Hahn:

Yeah, first of all, the stories about people losing life savings, that is something that no one intends for. And I think I speak for all digital markers and certainly speak for Frontline that if we were given a massive suppression list to make sure we never hit folks who were suffering from some type of illness, we would all apply that suppression list. We would. That's the last thing we want. But to answer your question, in terms of regulation, well, you've covered the Google disasters as of late with deliverability and what's obvious of bias towards the Republican side. So I don't think any of those challenges on the email side will let up anytime soon. Where I think we're going to start seeing some headaches pop up is going to be on texting. And I think we're already starting to see that with the new iOS 18 updates for iPhones where folks are going to start to be able to basically create a spam folder for text, get a certain folder for unknown senders and a different folder for known senders.

So I think that the phone companies are taking the first crack at it to see if that works for their consumers. We've seen the telephone companies start to implement the 10 DLC, which is this is the first real cycle where we've had to really abide by those rules and it certainly slowed things down for online fundraisers and put a little more guardrails in place. I wouldn't be surprised if those regulations really tightened up a bit more. I don't think we'll see a clear distinction between peer-to-peer and application of person A to P anytime too soon just because Supreme Court rulings in the past, but it's really down. It really is going to come down to legislatures and they have to make decisions on whether or not they're going to regulate this industry and define clear guidelines. There hasn't been any appetite from what I've seen for it to come from the alphabet agencies, if you will, but it's certainly, put it this way, I don't think most people would be opposed to some type of regulation because it is kind of like the wild west right now, and we want to make sure we're following rules and that we're getting messages are being seen by folks that want to see them.

And that also applies to the companies that are delivering these messages via email or via text. They should have to abide by rules as well and treat both sides fairly.

Eric Wilson:

Yeah, I think about this a lot and not sure what the right way forward is because you start to get into some really tricky ground vis-a-vis the First Amendment when you limit what campaigns can say. So you say, oh, well you're not allowed to do fake matches or you're not allowed to do hyperbolic texting. Well, that's not going to hold up in court. And then if you say, oh, well this is the sort of volume that you're allowed to do that's not going to hold up. One of the areas that I'm thinking through and curious to hear your just initial reaction is if we take away some of the pressure on those grassroots donors and actually allow major donors more leeway to give to the candidate campaign. So I think the cap of $3,300 per election is way too low when you look at how expensive campaigns have gotten. And so what that has necessitated is if you can't ask the more sophisticated donors for more money, you've got to go to less sophisticated donors and looking at the options available, that sure seems like one route we could go, and all it takes is Congress to amend the Federal Elections Act.

Mike Hahn:

This campaign certainly aren't going to fund themselves. So you bring up a good point too about folks that are high dollar donors tend to be a little more educated on the races that they're funding. They may know the candidate personally, they'll get invited to events, so on and so forth. One thing I've been a proponent of is the A to P texting, so more or less opting into a short code. I tend to think that those donors are very sophisticated. They know a good deal about the campaigns that they're donating to. They know that they're opted into a phone number. They know every time they receive a text from that phone number, who it is, what the campaign is. I'm a big fan of A to P. And I think that in the era of confusion, which we're currently in, it's always best that if you're a consultant to just try and get your campaign to agree to do P texting so that these folks are opting in, you don't have to worry all that much about TPCA regulations and getting sued.

And the optout is very clear. You reply, stop, you're going to get a text back saying that you're stopped and it actually stops. Correct, correct. And I think there's a lot of gray area when it comes to peer-to-peer. If you're replying stop, does that actually mean you have to be stopped, stop texting that person from for different campaign or whatnot. If you reply stop to Eric Wilson's campaign, Mike Khan's campaign could still text you. There's a lot of confusion around peer-to-peer, and I think that pushing candidates to A to P will certainly help clear up a lot of that

Eric Wilson:

Confusion. Yeah, I think that's right. And especially if you look at some of the privacy regulation in Europe, you have GDPR basically can't do any sort of American style campaigning there as a result of that because it's got that opt-in. I think we're going to start seeing more of that here in the United States, unfortunately. And so if campaigns want to be in a solid footing, it's got to start with that opt-in and getting people's permission,

Mike Hahn:

Which certainly would upend the prospecting industry. But I think peer-to-peer for prospecting is totally fine because how else would you get these folks on your list? Right? So kind of running two tracks.

Eric Wilson:

Yeah, there's some models on the left too where we are seeing them kind of pioneer, almost like an opt-in prospecting. That could be interesting. So obviously we've got some regulatory challenges that might face campaigns. What do campaigns need to be doing in terms of, clearly donors are saying, look, this is annoying. We don't like this. Are we going to start seeing some backlash from donors against campaigns or is a victimless crime?

Mike Hahn:

I certainly think that giving the donor the option to reply, stop at the end of the text message. It's good practice and eliminates headaches, but I can only talk to frontline strategies here, which is we honor opt-outs. We are really good at segmenting data. Dave Hassey founded Frontline and Justin Camp who runs our data side are very big on making sure we're not crossing any lines here because at the end of the day, if we don't have engaged donors, we don't have a business. So we're not in the industry of wanting to make these people upset.

Eric Wilson:

So obviously there's a market incentive there. If what we've been doing is I think it's safe to say diminishing in effectiveness, and we're starting to see some changes that are going to make it harder to keep doing that. What is the way forward with digital fundraising in this space?

Mike Hahn:

We touched on this a bit earlier, and it's that a lot of folks that are already in Congress or want to run for Congress that may have ran in the past have over the last 10 years amassed house files. And with those house files, those are folks that have previously donated to you. They're engaged donors and you should really be putting a lot of stock into

The people on your house file because they're also going to net you the most amount of dollars as well. You're not going to be paying the prospecting costs. Where I think as an industry we need to have a conversation is if that new candidate who doesn't have any data whatsoever wants to join, how do we make sure they're doing the proper things when they're reaching out to a donor for the first time? And I think a lot of that also comes down to content, making sure you're identifying who the candidate is, perhaps a little bio piece of where they're running and they're running in so-and-so state and why someone in a totally different state would care about their race. I think it's introducing the candidate to folks. I'm totally against the gimmicky matching and memberships and stuff like that because I think those give our industry a really bad name. I think they confuse donors and in a lot of cases they're just not real. And I think we really need to get away from the gimmicky stuff and really start focusing on real content so that we can actually cultivate relationships with these donors and they know who they're donating to so that when they get continued texts and emails from these folks, they remember that they had given to them, or if they've at least seen an email or a text from them in the past.

Eric Wilson:

Yeah, there's some sort of differentiation. And one of the things that's jumping out to me, so the Center for Campaign Innovation is in the field right now with our post-election poll, and we ask people, did you get asked to donate to a political campaign? It is up there with other forms of voter contact hitting people up. So don't hold me to these numbers, but let's say two thirds of voters reported being asked to donate to a political campaign. Now what that tells me is we are not segmenting well because donors make up 10 to 15% of the electorate. So if we're asking two thirds of them to be donors, then we're not listening to our data. And so I think that's a key point that you bring up of you've got this house file, who your supporters are, what are you doing to cultivate them and differentiate yourself?

Mike Hahn:

One of the things I love about Frontline when I came over here was that we have a data team that is just as big as our agency team and our prospecting team. And why is that important? Because we believe if we're sending a million people a text or an email, and only a hundred thousand people on that list actually care. We just wasted a ton of money going after 900,000 folks that don't care. And I think we see a lot of folks in our space, it's the equivalent of getting an Excel sheet, loading it up into some type of system and pressing send without any care in the world of who's on that list, just hoping that they generate enough dollars to cover the send cost. That is, I think that's totally wrong way to think about it. We need to be reaching out to folks that we know are going to donate and not waste money reaching out to folks that we know are not going to donate. It's hurting not only businesses, but hurting campaigns. I mean, they're paying for a lot of these same costs as well. So it's malpractice certainly on the part of certain vendors.

Eric Wilson:

Well, I think when the incentives and the economics of it start to fall apart, you'll see people focus back in, I sort of liken it to the 0% interest rates. There are a lot of good ideas when money was free, and so we're going to, I think, return to some of the fundamentals. One of the really interesting outcomes or takeaways from the 2024 election was just the discussion about the role of influencers and how important it was that both sides engaged podcasters, content creators, things like that. And certainly seems like the Trump campaign did a better job engaging those individuals. They come from the creator economy where you have payment systems like substack or Patreon, and I'm wondering if you think we'll start seeing more models like that from candidates where they sort of push forward on this influencer or content creator model and get exclusive content for donors or things like that.

Mike Hahn:

Yeah, they'd certainly be foolish not to do that. And I think too, a lot of it also is on these influencers to make sure they're not taking everyone and anyone because they could certainly sound like an echo chamber. But I mean, at the end of the day, social media is the new media. It is where most of folks where they spend their day, whether it's on Facebook, Twitter, or Instagram, YouTube, Google, you got to reach folks where they are. And these influencers have mass followings. They understand their audience better than anyone, and if they're willing to take on the risk and support a political candidate and make a few bucks off doing it, they're smart to do so. And these campaigns are smart as well for reaching out to them and tapping into audiences that they wouldn't be able to tap into anywhere else. So I certainly think it's going to be a very important medium going forward. I'm interested to see how it plays out in the midterms with some lesser known candidates. Not exactly presidential, but I mean, we saw how it worked for Presidential this year, and it was really fun to watch, and you made a good point. I really think it helped push Trump over the edge, especially with the younger voters.

Eric Wilson:

Well, my thanks to Mike Hahn for a great conversation. I'm going to link to Frontline Strategies website in our show notes. If this episode made you a little bit smarter or it gave you something to think about, all we ask is that you share it with a friend or colleague. You look smarter in the process, more people hear about the podcast. It's a win-win all around. Remember to subscribe to the Campaign Trend podcast wherever you listen, so you never miss an episode. Visit our website@campaigntrend.com for even more, including our weekly best practices and rundown newsletters. With that, I'll say thanks for listening. We'll see you next time. The Campaign

Mike Hahn:

Trend Podcast is produced by Advocacy Content Kitchen, a media production studio. I.

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