What Business Can Learn From the Obama Machine

NEW YORK (TheStreet) -- I have covered political technology since the Web was spun. I covered it for Netguide Magazine in 1996 and for Pete DuPont's Intellectual Capital site in 2000. I saw Howard Dean make 2004 the year of the blog and watched Barack Obama's 2008 campaign scale that intimacy.

If the president wins re-election today Republicans will call him a "machine" politician. He is, but in a brand new way.

The Obama machine is a networked data center, with new software for determining whom to target and how. With Republicans focused on TV and more traditional techniques, with polls tight, this is a grand marketing experiment done in real time.

It began years ago with the work of the Analyst Institute.

Formed in 2007, the group focused on testing the effectiveness of campaign messages in 2008, as Slate reported.

By this fall it was targeting email messages to specific individuals, combining them with personal contacts from people the targets trusted on Facebook, as Politico reported.

It's this combination of personal targeting, and the use of social networking, that is most relevant to business. Restaurants like the Cheesecake Factory (CAKE) want to know who on their email lists might call for a reservation tonight.

Knowing your target market by name, and running those targets down a sales funnel using email and social networking, can yield big gains at relatively modest cost. It's better than mere advertising.

The Analyst Institute has also used randomized field experiments to learn how people choose a candidate and how they decide to vote. (These are separate questions.) They created a "persuasion model," showing the likelihood of winning specific voters, focusing both messaging and personal visits on those most likely to switch allegiance, as Slate wrote recently.