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The 2020 merchandise primary has begun — and it could be key to presidential candidates' small-dollar fundraising

Tucker Higgins | @tuckerhiggins 5 months ago
The 2020 merchandise primary has begun — and it could be key to presidential candidates' small-dollar fundraising

That's just a hair cheaper than the one for sale from Sen. Kamala Harris and a 15-plus percent price bump compared with the iconic red Make America Great Again cap President Donald Trump popularized during his own primary battle. Like the hat offered by former Housing Secretary Julian Castro, Trump's cap sells for $25.

Those looking online for an official hat from Sen. Cory Booker will have no such luck, at least not yet. Booker's store has a smattering of stickers and t-shirts, but no hats.

Caps are missing as well at campaign stores belonging to Sen. Elizabeth Warren, Rep. Tulsi Gabbard and businessman Andrew Yang, all of whom are taking steps to earn their party's nomination.

Two candidates appear not to have set up online stores at all. Sen. Kirsten Gillibrand and former Maryland Rep. John Delaney did not have links to e-stores available through their campaign pages Monday morning, and neither responded to a request for comment from CNBC.

That could soon change, of course, as candidates step up efforts to raise small-dollar donations and distinguish their brand from a crowded field of fellow Democrats, nearly all of whom are shunning typical sources of big-dollar donations.

Merchandise sales are considered campaign contributions, according to the Federal Election Commission. Experts say the added revenue can serve as an important monetary boost in addition to providing a unique source of advertising.

"It allows them to activate a whole new class of donor," said Bentley Hensel, president of 1776 Consulting, a political e-commerce agency. "A lot of people aren't willing to pay $5 or $10 in a donation. But they will pay $25 for a yard sign."

The merchandise primary was key to the fortunes of a number of contenders in the last presidential cycle, particularly those of Trump and Sen. Bernie Sanders of Vermont.

Sanders sold more than $15 million in merchandise during his failed attempt at the Democratic nomination in 2016, according to Revolution Messaging, the progressive digital agency that managed the operation — half of the total funding the firm initially projected Sanders to raise through the Iowa caucuses.

Hillary Clinton, who defeated Sanders in 2016, did not disclose how much funding her campaign received from merchandise sales. But those sales provided "an important source of funding," her merchandise director told a fashion trade publication that year.

"This has really taken off in recent years," Larry Sabato, a top elections expert and the director of the Center for Politics at the University of Virginia, wrote in an email. "Big money is easy to collect, but small money gets a campaign votes, not just cash. People who give even five bucks have skin in the game."

"Anybody who buys a piece of merchandise from an e-store is almost certainly a strong supporter of the candidate who will give money, volunteer in some way, and give a candidate the best kind of advertising — vocal endorsement to family and friends," he wrote.

Perhaps no candidate went as all-in on the merchandise strategy as Trump, though. Trump's campaign famously spent about a $1 million more on hats than it did on polling.

The Trump campaign has continued to raise funds using its famous red hat and other merchandise, pulling in more than $20 million that way between 2016 and 2018, the campaign has said.

Hensel said he attributed a lot of Trump's success in edging out a stacked GOP primary field to the campaign's branding, and said Democrats need to "act quick to gather as much early support as they can to stay and fight it out."

American presidential campaign merchandise dates back to the days of George Washington, but President Barack Obama's 2008 and 2012 campaigns had a lasting impact on the way campaigns formulate their strategies.

Obama's 2012 campaign pulled in nearly $40 million in merchandise sales, trouncing Mitt Romney's $15 million that year, and drawing the attention of the Republican Party establishment, according to a CBS News report published in 2015.

"In this day and age, you have to have a robust store," then-Republican National Committee spokesman Sean Spicer, who later served as White House press secretary, told CBS News.

Though it is still early in the 2020 race — Iowa caucusers will not convene for a year — there is a clear front-runner in the merchandise primary already, at least in terms of available options.

Warren, despite having no baseball cap on offer, has the most complete campaign e-store by far. Its five pages of options include a "Purr-sist" cat collar ($23), "persist responsibly" pint glasses ($20), and state-specific t-shirts for $25 a pop.

The phrase "nevertheless, she persisted" went viral in 2017 after Senate Majority Leader Mitch McConnell uttered the words to criticize Warren for attempting to continue to talk over Republican objections during Jeff Sessions' attorney general confirmation hearings.

These campaign products "shape the perceived stereotype in someone's mind" about who a supporter would be, said Bruce Newman, the editor-in-chief of the Journal of Political Marketing and a professor of marketing at DePaul University.

"It's really no different to business, when it comes to branding a politician," said Newman, co-author of the 2017 book "Brand."

At the bottom of the merchandising pack so far are Delaney and Gillibrand, who have nothing for sale online yet.

The lack of action from those campaigns might be mitigated by alternative fundraising strategies. FEC records show that Delaney has already loaned his campaign more than $4.5 million, while Gillibrand is outpacing her rivals in reaching out to big-money donors, CNBC has reported.

Both Gillibrand and Delaney have said they will not accept contributions from political action committees associated with corporations, and Gillibrand has also said she will disavow any super PAC that attempts to support her.

Newman noted that the two candidates' relatively low profile among voters could limit the potential impact of any merchandise sales, in contrast to Warren and Trump, who are "known commodities."

"No one knows who [Delaney and Gillibrand] are. So does it really matter if someone starts using a coffee cup with their name on it?" he said. "They basically have to focus on different channels, other than this one."

Hensel said it was a "mistake" for these campaigns to lag on merchandise sales but pointed to some of the logistical challenges of selling campaign products.

"If a campaign is late in deliveries, that is going to cause issues," he said. "You can get some pretty viral social content off this merchandise, but if a candidate is pushing an environmental message, and they send a package with packing peanuts, that is not going to be good for them."

"My sense is that they want to have campaign stores," he said. "But it's not easy."