Competitive Analysis: ActBlue

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Case Study: The Competitive value of ActBlue to Online Political Fundraising Robert Gracin Department of Media and Information, Michigan State University 10 April 2020

CASE STUDY: ACTBLUE’S COMPETITIVE EDGE FOR DEMOCRATS

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Abstract Democratic online fundraising platform ActBlue operates as a nonprofit organization, generating revenue from small transaction fees on donations collected. ActBlue exemplifies how platforms can bring great value to various organizations targeting the same audience/population.

The platform securely stores personal credit card information, building trust and brand recognition for users to donate to their causes easily. ActBlue has been credited with many increasing Democratic donations by $700 million in 2019 alone, giving Democratic organizations leverage in small-dollar donations over Republican causes. This paper will explore the competitive edge that the platform has brought Democratic organizations over Republican organizations. The dynamics and infrastructure of the platform propose valuable data insights.

Keywords:​ ActBlue, digital fundraising, online fundraising, democratic politics, digital platform, user-generated data

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Overview of ActBlue ActBlue.com was launched in 2004 by Matt DeBergalis and Ben Rahn as a tool for Democratic and progressive candidates and organizations to fundraise online. Since then, the platform has seen large growth and success, positioning itself as a new fundraising revenue stream in the political arena - on federal, state, and local levels (Wayne 2007). ActBlue’s seamless user payment process along with its customizable backend and features for organizations make it a versatile platform, harnessing the power of digital political organizing (Willis 2014). In a nutshell, users representing Democratic or progressive campaigns, labor unions and nonprofit organizations can use ActBlue to generate branded webpages coded to collect quick, easy digital transactions. The product is a visually appealing, user-friendly and secure platform connecting Democratic voters nationwide to their favorite causes with one simple click of a donation button. From there, social media users come across ActBlue links on sponsored and organic content posts (Willis 2014).

Overall, the platform is very adaptable for such a niche clientele/industry. ​“To make things even easier, ActBlue also automatically sets up pages as soon as a Democrat registers for a federal office, or for a state office in 23 states. It also holds fund-raising training sessions online and in person around the country.” (Wayne 2004). Further, Wayne explains that ActBlue’s “founders’ combination of computer savvy and political passion” are what make the platform unique (Wayne 2004). Further, “the site is essentially a back-office clearinghouse — candidates, bloggers, political committee and supporters set up Web pages on ActBlue to solicit online donations for candidates across the country, even in small amounts” (Wayne 2004).

Altogether by the 2018 election cycle, ​more than 14,800 groups and candidates used the platform

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(Schouten and Wright 2018). ​Thus, ActBlue offers incredible value to the Democratic political community, changing the nature of political fundraising and inherently elev​ating Democratic digital​ fundraising abilities over those of Republicans and conservative organizations.

Business Model ActBlue operates as a nonprofit, only generating revenue for operating expenses and payroll. The nonprofit collects this money with a 5% processing fee of each donation.

Considering the number of small-dollar donations made on the platform, ​“ActBlue keeps about 1 percent of all donations, as well as asks users to make donations for salaries and expenses.”

(Wayne 2004). Thus, ActBlue is a vessel for donated funds to move from donors to their causes.

From inception in ​2004 to 2014, $619 million passed through the start-up on the way to Democratic candidates and causes. For perspective, “over the same period, the 2014 August Democratic National Committee brought in a total of $1.4 billion,” a longstanding traditional fundraising source/mechanism (Willis 2014).

Perhaps the most unique feature of Actblue is the platform’s ability to generate and harvest user data in many different forms from many different streams (Shillair 17 February 2020). On one side is the campaign staffer, independent of ActBlue who creates the ActBlue donation form for their cause. As mentioned, ActBlue provides various forms of trainings and strategy sessions with clients and partners to aid in this process. On the second side, ActBlue users, also independent of ActBlue, who donate money on the platform also generate their data--and very sensitive data relating to payment and bank accounts. Thus, the data generated on

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ActBlue from both parties exemplifies the unique ‘infrastructure’ that ActBlue is to many different audiences united by shared values and missions (Shillair 10 February 2020).

Competitive Analysis There are a couple industry standards in the digital space of Democratic organizing, each serving niche, interconnected functions to consultants and professionals in the political/advocacy industry. “ActBlue has competition from Democratic technology providers such as Blue State Digital and NGPVAN, which appeal to organizations large enough to assume control over their entire technical infrastructure. But for groups and campaigns that are starting up or are seeking down-ballot offices that often mean smaller budgets, ActBlue has a strong appeal.” (Willis 2014).

With the context, any competitor of ActBlue is likely to be politically partisan. As ActBlue was the first in the Democratic digital space, it will likely remain the gold standard for digital fundraising. In 2019, seeing the value of ActBle, “Republicans launched WinRed, a platform modeled after ActBlue and designed to capi​tal​ize on Trump’s historic small-dollar fundraising to help down-ballot candidates and enhance the party’s data operation. Officials said WinRed generated $30 million in the third quarter, which was its first full quarter. The majority of House and Senate campaign committees and state parties have signed onto the new platform, they said. It is unclear how many have begun raising money using the new platform.” (Hee Lee 2019). The GOP was inspired to build a conservative digital payment infrastructure as versatile as ActBlue is to liberal causes. After seeing the 2018 record online funds raised from ActBlue, Republican ramped up the GOP's online fundraising infrastructure (Schouten and Wright 2018).

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The influential relationship between politics and ActBlue’s ability to perform and compete as a business illustrate how special the platform is, and how special this moment is in political history. In 2019 when House Democrats formally impeached Republican President Donald Trump, “WinRed processed more than $13.7 million in donations from more than 276,000 contributors in the six days since House Speaker Nancy Pelosi (D-Calif.) announced the impeachment inquiry last month, officials said.” (Hee Lee 2019). Thus, political events and moments will impact traffic and content on ActBlue, mostly generated by users.

“Trump, a celebrity-turned-politician, saw big online small-dollar fundraising success in 2016. Nearly two-thirds of the money he collected from other individuals in his campaign came in amounts of $200 or less, federal data show (Schouten and Wright 2018). However, the online payment mechanism begins and ends within Trump’s campaign and its resources. ​ActBlue goes a couple steps further than President Trump’s campaign-attached digital fundraising mechanism because ActBlue allows users to access various beneficiaries to donate to. Further, a frequent ActBlue user’s account and saved credit card information becomes a “token” for users to access a platform full of diverse user-generated forms to interact with (Shillair 10 Feb 2020). Thus, Democratic low-dollar donors "are more likely to give to several different candidates across the country they know a bit about but are generally for the cause” ​(Schouten and Wright 2018).

Competitively, before WinRed was launched, ​"Republican low-dollar donors are more focused on the person. They will give, but to certain people," he said. "It's a cultural problem" ​(Schouten and Wright 2018). Thus, divides in political ideology manifest in online behaviors too.

Value

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While maintaining an appealing, progressive company culture, the platform’s only broad responsibility is to ensure proper functioning for all users. Other than that, the users generate most of the traffic, data, and content of the page. These dynamics are different from normal platform-user relationships. For example, Facebook users add/generate most content on the platform, and Facebook organizes that data for user consumption. With ActBlue, both donors and form creators are users, each adding their data to the platform, then to interact with each other in a unique way to collect payment, hence tokenization.

As mentioned, the insights that can be harvested from user interactions on the platform propose incredible value to the nonprofit platform. While ActBlue’s employees keep the platform running and generate minimal content, they do share insights on user data. ​Among its findings: “Women are more likely than men to be recurring donors. It [ActBlue] also conducts experiments in fund-raising techniques, much in the way that the Obama campaign did. For example, the firm noticed that many of its donors labeled themselves as retired or unemployed on contribution forms. So it changed the form to allow users to check a box for these options rather than type them in, which increased completed donation forms by 4.7 percent” (Willis 2014). In this way, ActBlue is generating some content, however most of it is responsive and testable and dependent on user interaction.

Outlook The competitive value that ActBlue holds will likely anchor the platform as a pillar to Democratic and progressive campaigning and fundraising, as the platform is already the industry standard and has been mimicked by ‘competitors’ on the other side of the aisle. Further, with the

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projected growth of mobile commerce and mobile-centered user experiences, ActBlue will continue to generate mobile-friendly solutions ​(Shillair 16 March 2020).​ ActBlue’s blog reports that ​“more than half of the donations made on ActBlue in 2019 were made using mobile devices, marking the first year that the majority of donations on the platform were made on mobile” (Hee Lee 2019). ActBlue has been responsive to “​advances in technology -- the advent of one-click donating and Apple wallet, for instance -- to allow motivated donors to act quickly when candidates or causes catch their attention. Nearly 6 million maintain ‘express’ accounts that store donors' payment information and addresses, making it easier to donate to multiple candidates over an election cycle” (Schouten and Wright 2018). Thus, ActBlue has proven itself as a robust digital infrastructure adaptable to the ever-changing physical infrastructure of our technology.

Conclusion ActBlue has pioneered a new front in the political and digital landscapes, innovating online fundraising to facilitate valuable relationships between voters, advocates, and their favorite causes. The platform’s user-oriented infrastructure, internal and external user dynamics, and secure tokenization make it unique. Further, the adaptability of the platform allows many nationwide entities to use it for their own purposes, knowing this digital infrastructure is shared by entities with shared values and missions. Among all, perhaps the sense of unity and empowerment that ActBlue donors feel when contributing to a grassroots movement is the most valuable asset the platform provides.

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Works Cited Hee Lee, M. (2019). “Democrats Donated More than $700 million in 2019 through ActBlue, officials say.” ​The Washington Post. R ​ etrieved from https://www.washingtonpost.com/politics/democrats-donated-more-than-700-million-in-2 019-through-actblue-officials-say/2019/10/16/c1f622e6-f021-11e9-8693-f487e46784aa_s tory.html​.

Wayne, L. (2007). “A Fundraising Rainmaker Arises Online.” The New York times. Retrieved from​ ​https://www.nytimes.com/2007/11/29/us/politics/29actblue.html​.

Willis, D. (2014). “How ActBlue Became a Powerful Force in Fund-Raising.” ​The New York Times.​ Retrieved from https://www.nytimes.com/2014/10/09/upshot/how-actblue-became-a-powerful-force-in-f und-raising.html​.

Schouten, F., Wright, D. (2018). “This small-dollar platform helped Democrats win the House.

Now Republicans are racing to compete.” Retrieved from CNN Wire Services. https://search-proquest-com.proxy1.cl.msu.edu/docview/2157799437/C965F9C5E4C049 5APQ/5?accountid=12598 Shillair, R. (10 Feb 2020). ​Payment infrastructure and platforms to support small and medium Enterprise. R ​ etrieved from D2L. Shillair, R. (17 Feb 2020). ​Gaining Insights: Tracking Cookies and API. ​Retrieved from D2L. Shillair, R. (16 March 2020). ​Mobile commerce. ​Retrieved from D2L.