Hearty congratulations to Barack Obama, 44th President of the United States. The big difference between Obama and first Senator Clinton his Democratic rival and then Senator McCain his Republican rival lay in his power to motivate grass roots support and then harness it using the internet. Whilst his competitors relied on paid workers for many tasks, Obama used volunteers sourced from the internet. Half of all the money he raised (a staggering $650m) came from small donations of less than $200.

Bloomberg’s Jonathan D. Salant has a good piece about this:

“Obama, 47, went after the small donors early and returned to them often. He took in $8 million online in the first quarter of 2007, quadruple the campaign’s goal of $2 million, [Obama strategist] Axelrod said. At a February 2007 rally in Las Vegas, Obama volunteers fanned through the crowd, gathering the names and e- mail addresses of people who could be asked for small donations again and again.

“Almost half of Obama’s money came from people giving $200 or less, compared with 34 percent for Arizona Senator McCain, according to the Center for Responsive Politics, a Washington- based research group. In 2004, 31 percent of Massachusetts Senator Kerry’s money and 32 percent of Bush’s funds came from donors who gave $200 or less.”

Obama’s success in raising small donations made it possible for him to eschew Federal funding, which came with its own limits. This meant he could outspend McCain and he did so handsomely. Salantz again:

“With his extra money, Obama almost tripled McCain’s advertising expenditures as Election Day drew near. He spent $21.5 million to McCain’s $7.5 million from Oct. 21-28, according to a University of Wisconsin study. During the last weekend of the campaign, Obama ran 5,947 ads in seven competitive states compared with 3,358 for McCain, 77 percent more, according to the Nielsen Co. On Nov. 3, Obama ran 3,410 ads in those states; McCain ran 1,900.

“Even before the final ad blitz, Obama had spent $190.2 million on media, compared with $76.7 million by McCain. The money allowed him to both fend off McCain’s attacks and go on the offensive. In addition, he was able to expand his campaign to states traditionally inhospitable to Democratic presidential candidates, such as Virginia, North Carolina and Indiana.”

It didn’t stop with money. On election day campaign volunteers who wanted to help get out the vote could go online, log in and to pick up the phone numbers of fellow Americans to urge them to go the polls. How much more effective this was than the alternative “robo dialler” methods (where the potential supporter is contacted by an automated phone call) can be seen from the results. Obama’s success derived in part from empowering grass roots support using new technology to allow participation.

Whereas in previous campaigns gurus like Karl Rove had used a sophisticated understanding of social networks to target key communities with messaging in relation to key voting issues (gay marriage, abortion), Obama used the Internet to galvanise key communities into active practical and financial support for his campaign.

There are lessons here for anyone who wants to understand to communicate and to connect in the new economy.

It has long been rumoured that much of the success of the Bush campaign in 2000 and 2004 was down to their superior understanding of social networks. Now a chance remark (highlighted by Valdis Krebs) by Bush’s campaigning guru Karl Rove on Obama’s election campaign draws attention to this.

Barack Obama’s manager admitted to the New York Times that he wanted an “army of persuasion” modeled explicitly on the massive Bush neighbor-to-neighbor “Victory Committee” of ‘00 and ‘04. Those efforts deployed millions of volunteers to register, persuade and get-out-the-vote. Sen. Obama’s organizational emphasis wisely avoids the Democratic mistake of 2000, when Donna Brazille’s plea for a stronger grassroots focus was ignored by the Gore high command. It also avoids the mistake of 2004, when Democrats outsourced their ground game to George Soros’s 527 organizations. The latter effort paid at least $76 million to more than 45,000 canvassers – many hired from temp agencies – to register and turn out voters. It was the wrong model: Undecideds are more likely to be influenced by those in their social network than an anonymous, low-wage campaign worker.

The emphasis on social networks shows what many have long suspected, that the study of social network dynamics, including the mathematical models deployed by businesses like ours, was trialled in the war-rooms of the Bush-Cheyne campaigns of 2000 and 2004.

The key characteristics of these learnings were:

• Don’t rely on mainstream advertising to change hearts and minds - work through existing social networks;
• Identify issues that go to the heart of your targets preoccupations, and hammer your stance on these home;
• Organise in ways that empower the grass roots, not the central command.

It worked for Bush and Cheyne and now it’s working for Bush and for big brands. The key message that Rove is stressing is that paid-for messages are not as effective as recommendations from within a social network.

A key example of this occurred recently in the case of Market Sentinel client Avis. When they launched their blog one of the early commentators posted a comment highly critical of the initiative: what was the blog doing, he demanded, to make the company more effective, how would it address his specific customer service problem? The Avis folk responded to this challenge with a detailed explanation of how the blog was part of a broader initiative to do a better job with customers, to explain, to listen and to fix specific problems (and they fixed his). When on one of the better-trafficked forums used by international business travellers, a commenter highlighted a customer service issue with Avis the same previously hostile commentator responded - defending Avis and directing the complainant to the UK blog where the management had shown themselves so responsive. That’s grass roots advocacy in action. More effective than paid communication, precisely because it is unpaid for.

What Karl Rove knew yesterday, Obama and Avis know today: it is better to have others do the persuading for you. Understand and meet their needs and they are a better salesforce than money can buy.