At a ritzy California hotel two weeks ago, donors who had spent hundreds of millions of dollars trying to defeat President Obama watched presentations from strategists tasked with illustrating why they had failed. The gathering had the atmosphere of a corporate retreat, where only the presenters wore suits. Everyone had a name tag, some pinned to T-shirts that read: "I'm a Koch Brother."
Across the country, the team behind American Crossroads, which raised and spent almost a quarter of a billion dollars on boosting Republican candidates and their campaigns, has spent the last several months offering donors their own take on what they got right, and what they got wrong, in conference calls and private meetings.
In the wake of big Democratic victories in 2012, the outside groups that raised and spent so much on Republicans' behalf have spent a considerable amount of time and effort analyzing their performance. Their goals are two-fold: Improve their strategies and tactics in order to win future races, and convince their donors -- who provide the funding that keeps the lights on and the television ads blaring -- that investing with them is still the right way to go.
Here are the five lessons those outside groups have learned, according to strategists involved in the post-mortems and the donors themselves who have heard the presentations:
Spend Early: Though there weren't many Republican success stories in 2012, outside groups who analyzed their performance after Election Day believe their money worked best when it worked early. American Crossroads spent early to define former Sen. Bob Kerrey, the Nebraska Democrat, as a carpetbagger who had moved to New York and no longer represented his state's views. That spending helped define Kerrey early, and a race Democrats hoped would be close became a Republican blowout.
The proliferation of money in politics has meant television advertising starts earlier than ever, and in a volume never seen before. Money spent later in the cycle, strategists say, can get lost in the hurricane of political advertising, to the extent that voters stop paying attention. Money spent in October is less effective -- both in terms of the number of advertisements purchased and the resonance of their message -- than money spent in June, July or August.
That's exactly the strategy President Obama's campaign pursued during the early months of the general election, when they spent tens of millions of dollars defining Mitt Romney as a heartless corporate raider. Jim Messina, Obama's campaign manager, moved $65 million in ad spending originally earmarked for September and October into June and July, with no guarantee that money would be available in the fall. The Obama campaign "gambled on the front end and front-loaded our media," David Axelrod, the Obama campaign's senior strategist, said at a Harvard forum revisiting the campaign. That gamble paid off; now it's a blueprint for other outside advertisers.
(A corollary discovery: Spend wisely. Crossroads, for one, plans to rely more on supplemental advertising through social media and Internet advertising than it has in the past. Television "is the most powerful persuasion medium, but we can substantially enhance its power by investing in online activity and other mediums," said Steven Law, president of the Crossroads organizations.)
Know Your Voters: Republican outside groups believe the technology their party uses to identify and track voters is significantly behind the technology Democrats are using. That's been a problem since long before Obama's ground-breaking 2012 campaign. To better compete, the Republican Party and its outside allies need to develop a better voter file and database. The Democratic version, housed inside a company called Catalist, run by Harold Ickes, has helped the party build an advantage when it comes to voter registration and absentee ballots.
Outside groups are pitching their donors on various versions of their own database-building efforts. Donors who attended the conference put on by libertarian activists Charles and David Koch were asked to invest their political dollars in Themis, a 501(c)(4) organization based in Alexandria, Virginia, which has a database up and running. Crossroads strategists mention Liberty Works, a Silicon Valley-based company that just won a contract to further develop the Republican National Committee's data file, as the wave of the future.
What's more, conservative groups that put money into field programs will learn from the successes of the Obama campaign.
"The lesson learned is if you look at what the left did, they were embedded in these communities for four-plus years, and that's a huge advantage," said one of the presenters at the Koch brothers' retreat, who asked for anonymity to discuss the conference. "It's not just a matter of activism. What it was is they were embedded in urban communities and basically broadening their voter base. Where they had attrition with swing voters and middle voters, they made up for and more by registering new people in their base, and they were extremely effective at it."
Feel Their Pain: Donors to both the Crossroads organizations and the Koch organizations were taken aback, in a positive way, by the candor strategists have shown in acknowledging their shortcomings. And when an organization spends hundreds of millions of dollars on television advertisements, the fact that those advertisements were both boring and failed to connect with persuadable voters is a real shortcoming.
Think back to the 2012 campaign. Do you remember any outside group advertising? Perhaps the most memorable one was the first, an advertisement that ran back in January of 2012 that took President Obama to task over Solyndra, the California-based solar panel maker that failed after getting millions in stimulus funding. It was the first ad the Obama campaign actually paid to respond to -- and Obama strategists admit privately it's the only one that really scared them.
Most of the rest of the advertisements were boiler-plate and boring. ObamaCare still polled well for Republicans, but swing voters didn't see how it related to them. Government spending was a big problem for President Obama intellectually, but voters didn't understand how it would impact them personally. Conservative groups admit they misread the polling; voters were more interested in comparing two candidates, rather than in what Law called "abstract" issues. Obama's campaign, on the other hand, ran advertisements that were more readily accessible to voters, ads that put Romney and the President side by side. Outside groups, Law said, need to focus on the "less tangible elements of where the electorate's mood is."
Stay In Your Lane: Every outside group is different, and each can fill a specific niche. On one hand, Crossroads is a small organization that promises donors the biggest bang for their buck; 97 to 98 percent of the money Crossroads brings in the door will go out in the form of political communications like television advertising, while the Republican National Committee spends somewhere around 30 percent of their donations on staff and overhead. Elements of the Koch operation, like Americans for Prosperity, pride themselves more on being a grassroots organization, sending volunteers and paid staff into the community to identify and persuade voters.
But here's where rules prohibiting coordination between outside groups and more traditional party committees can hinder the outside effort: While outside groups are becoming adept at the mechanical aspects of turning out the vote -- tracking absentee voters and sending mail to those who haven't voted already, as an example -- the party itself is much better equipped to field and manage legions of volunteers in all 50 states.
Meanwhile, outside conservative groups took note of the way their liberal counterparts coordinated their advertising spending. There were just as many different liberal groups spending in key races -- the League of Conservation Voters, Majority PAC (which focused on Senate races), the House Majority PAC, the Sierra Club, Planned Parenthood and others -- but they weren't all spending at once. When Majority PAC would end an ad campaign, LCV might spend money on the following week. Each advertising flight focused on a different segment of the electorate, but liberals were careful to avoid stepping on each other's message.
Toward the end of the campaign, Crossroads began focusing more on two specific segments of the electorate: Upper income and college-educated women, two groups among whom Romney underperformed. Finding an appropriate niche and focusing on improving performance, Law said, is critical to any outside group's success.
Be Accountable: Donors to both Crossroads and the Koch brothers' organization voiced frustration with another group doing its own, much more public, post-mortem, the Republican National Committee. At the Koch brothers' conference, donors grumbled that the RNC's Growth and Opportunity Project report wasn't introspective enough. When Crossroads makes the point that more of what they raise is spent on actual political communications than what the RNC raises, it is about winning over a larger slice of a finite donor base.
One thing the Koch donors and Crossroads backers both heard was a barring of the soul. Strategists in both groups acknowledged their shortcomings openly, at times startlingly, and laid out the steps they planned to take to fix the problem for the next cycle. Donors, like investors, need to be reassured that outside groups are evolving and learning, before they will throw more money at the problem.
"There's gold to mine from this election if we're willing to take a good hard look at it," Crossroads's Law said.