Quid, Civic Analytics, Resonate, Nationbuilder and Fiscal Note are five of the new breed of analytics firms
Civis Analytics, Resonate, Nationbuilder, Fiscal Note and Quid (logos pictured) are among the new analytics firms feeding political campaigns' hunger for data © FT montage

As the votes for US President Barack Obama came in on election night 2012, his chief analysis officer, Dan Wagner, was already plotting his next move: talking to Alphabet’s chairman about taking the campaign’s data scientists with him to start a new company.

After their discussions, Eric Schmidt became an early investor in Mr Wagner’s Civis Analytics — one of a new generation of start-ups that are taking corporate marketers’ targeting techniques and selling them to political campaigns.

As a data analyst, Mr Wagner rejected the “over simplistic stereotyping of people” as Latinos or high-income voters. He instead built tools to help campaigns gather vast amounts of information, to work out exactly what to say to win over each persuadable voter.

“We essentially used what we were doing in 2012 and turned it into a product, a platform for different political organisations in Washington,” Mr Wagner says.

Now, these big data analytics technologies are being sold beyond the beltway to state and regional election campaigns. They are enabling campaign teams to slice and dice voters, and then use targeted digital or TV advertising to encourage them to vote, donate or volunteer. “Our effort is to try to bring these types of capabilities to the smaller races,” Mr Wagner explains.

Political campaigns’ hunger for data is fostering a growing industry of these analytics start-ups, often funded by Silicon Valley investors, and sometimes founded by former campaign staff. Companies are creating software that draws on both corporate customers’ user data and previous political campaigns’ analytics.

Campaigns have long made use of basic voter records, detailing for example, who has voted in which election. Now, though, political campaigns can combine this voter information with tracking of their online activity, to match voters with profiles developed by data brokers. These profiles are usually used by corporate marketers, to target messages based on specific personal data — for example, the particular building someone works in.

Resonate — which counts Kleiner Perkins, Intel Ventures and Sun Microsystems among its investors — works for corporate customers and campaigns, collecting detailed information from 10,000-15,000 surveys a month, each lasting about 45 minutes. It then supplements this data by following survey participants around the internet using website “cookies”, to learn more about potential consumers or voters.

Gary Sherwood, vice-president of client solutions at Resonate, says it reaches 90 per cent of US adults online, and can analyse 7,000 of their different “attributes”, including “demographics, media consumption, values, and motivations”.

Resonate can tell that supporters of Bernie Sanders, the Democratic presidential candidate, are more likely to go to Mexican fast-food chain Chipotle, while Donald Trump fans prefer the drive-in restaurant Sonic. It has also geo-targeted the US Capitol complex with adverts aimed at convincing legislators and their staff to vote for the reauthorisation of EXIM, the export-import bank of the US.

“This advance in technology and analytics has absolutely altered the way consumer brands approach markets,” Mr Sherwood says. “It is fascinating to watch how political campaigns this cycle are putting into action enhanced audience segmentation.”

While a single fact — that a person likes cats or tacos — is unlikely to be of much use, the sheer weight of information, much of it put on the internet by social media users themselves, can be useful when fed into ever-improving models.

Bill Russell, director of digital partnerships at TargetSmart, says the boom in electoral analytics has arrived because there are more data, better tools and greater expertise in how to deploy the findings.

After president Obama’s election victory in 2012, Mr Wagner was not the only person to make the jump into commercialising their data skills. Companies such as media measurement service Rentrak, now owned by ComScore, hired former Obama director of media analytics Carol Davidsen as vice-president of political technology.

“They started going out into what I’m going to call the real world, the commercial world, making tools like that available to media buyers in lower races,” Mr Russell says.

As smaller political campaigns adopt more sophisticated data analysis, it creates a larger market for companies such as TargetSmart, which works with the Democratic National Committee and Experian to use voter data to target ads on Facebook, Yahoo and television.

Companies are also creating tools that can give campaigns access to data on the fly — to help them with canvassing on the doorstep, or to enable a change of tack if sentiment is not going their way.

Quid, a start-up based in San Francisco’s fashionable South of Market neighbourhood, specialises in processing language rather than data. Campaign managers can use it to visualise how millions of stories in the media and on social networks are changing. It says it can “zoom in, Google Maps-style” on potential problems — either for a campaign or for its opponents.

“The timeliness of what is possible with technology is one of the things that is changing,” says Bob Goodson, Quid’s founder.

Quid also provides data to companies looking to monitor how an election could hit their business. It has created a so-called ‘Bern list’: companies that Bernie Sanders criticises in speeches that are then reported in the media. Topped by Goldman Sachs, this list includes Verizon and General Electric. But Quid notes that, while Mr Sanders often mentions Walmart in his stump speeches, this is much less reported by the press.

Some of these election-focused data analysts are now spreading beyond the US, selling their tools to campaigns across the world.

NationBuilder aspires to be “all of the things you need to build a movement online”, tracing voter priorities collected in phone calls and on doorsteps.

Emily Schwartz, vice-president of organising at NationBuilder, points out that the Scottish National Party — which campaigns for Scotland to become independent of the United Kingdom — was one of its first customers back in 2008. This year, both the Leave and Remain campaigns in the UK’s EU membership referendum are using the product.

Campaign technology was previously developed either internally or by small partisan consultancies. But NationBuilder is an example of a growing trend towards tech companies working for any side in an election. “We are seeing growth in non-partisan technology because the market is so small,” Ms Schwartz explains. “As a small partisan application, it is hard to keep the technology up to date.”

But while most big data analytics technology groups insist they do not know individuals’ names or identities, some people are concerned that increasingly sophisticated data techniques could infringe privacy.

Dave Maass of the Electronic Frontier Foundation, a non-profit organisation defending people’s rights online, says people should worry about whether their political preferences are being sold or traded. Sometimes, candidates will pass lists of voters on to other politicians when they drop out of a race, or use them in the next election, Mr Maass warns.

A greater concern for many is whether political campaigns can be trusted to protect personal data from cyber attack. Last week, James Clapper, US director of national intelligence, warned that hackers — possibly working for foreign governments — were trying to infiltrate both the Democratic and Republican presidential campaigns.

As data mining has now become such an essential part of an election campaign, Mr Maass worries that it will be harder for any candidates to be pro-privacy. “There is a bit of an arms race to collect as much data as possible,” he says.

At a glance: data start-ups that are playing politics

Civis Analytics
● Beginnings: Founded by Dan Wagner in 2013
● Investment: Undisclosed sum from Alphabet’s Eric Schmidt
● Details: Mr Wagner was US President Obama’s chief analytics officer in his 2012 campaign. The start-up works for progressive campaigns and creates intensely detailed databases of individual voters. Its latest product can identify which TV programmes persuadable voters are watching so campaigns can buy TV ads

Quid
● Beginnings: Founded by Bob Goodson and Sean Gourley in 2010
● Investment: $66.5m, including Founders Fund, SV Angel and media company Liberty Interactive Corporation
● Details: Works for both political campaigns and corporate clients analysing natural language to isolate, for example, how sentiment is changing in the news and which topics are closely connected. Mr Goodson, co-founder, was part of the founding team at Yelp

Resonate
● Beginnings: Founded by Andy Hunn, Bryan Gernert, Sara Fagen and John Brady in 2010
● Investment: $42m, including Kleiner Perkins, Intel’s venture arm and Sun Microsystems
● Details: Helps political campaigns and consumer brands deliver targeted advertising campaigns, even down to showing ads only within US congressional offices

NationBuilder
● Beginnings: Founded by Jesse Haff, Lea Endres, Jim Gilliam in 2009
● Investment: $14.8m, including former Facebook executives Dustin Moskovitz and Sean Parker
● Details: Platform used by political campaigns worldwide, including both sides of the Brexit referendum campaign in the UK. Mr Gilliam, chief executive, came up with the original idea when he was trying to coordinate campaigns around his documentary films

FiscalNote
● Beginnings: Founded by Tim Hwang, Gerald Yao, Jonathan Chen in 2013
● Investment: $28.2m, including Yahoo founder Jerry Yang, media entrepreneur Mark Cuban and RenRen, the Chinese social network
● Details: FiscalNote aims to be a one-stop shop for lobbyists trying to better understand the progression of bills and which politicians to target. It uses artificial intelligence to deliver real-time predictions on whether legislation will pass

Letter in response to this article:

Democratic campaign used Facebook data too / From Rodney Atkinson, Stocksfield, Northumberland, UK

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