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February 2nd, 2016

How Trump Trusted The Laundry … And Got Moneyballed By Ted Cruz

A strong analytics game is table stakes in the world of modern politics.

Sometimes you wear the shirt.

And sometimes the shirt wears you.

The shirt has been wearing Donald Trump for probably his entire life.

Why? Because Trump seems to always bet on the laundry.

Trump came in second in the Iowa caucuses. He underperformed his lead in the polls by something like six points. Ted Cruz overachieved by a couple points with the swing big enough to turn Trump into the runner up.

How did this happen? Trump has been dominating the polls and the national conversation since the beginning of summer 2015.

Basically, it goes something like this: Trump bet on his name and his bravado while eschewing modern data practices that have proven to win elections over the past decade.

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Moneyball, Elections And The Modern Business World

Trump is a Yankees fan. Because of course Donald Trump is a Yankees fan.

A baseball analogy is apt for what just happened in the GOP Iowa caucuses. The presumptive favorite who traded on his name and legacy lost to a strong upstart who built a competitive campaign based on data analysis, predictive modeling and personalized messaging. In doing so, the upstart exploited the inefficiencies of the favorite and swung the result by several points.

If you’re a baseball fan, this should sound familiar. It is the story of Moneyball, the term coined by author Michael Lewis when he chronicled how the early 2000’s Oakland A’s built some of the best teams in baseball by exploiting market inefficiencies with analytics.

Cruz’s campaign spent $3.6 million on data, predictive analytics and progressive modeling from a firm called Cambridge Analytica. He had been preparing his so-called “ground game” based on messaging and data since last June.

Trump, offered the same data, didn’t agree to use it until December. Trump spent some paltry sums (in caucus and primary terms) on analytics …

And he spent $1.2 million on hats.

From Politico:

Trump’s reports show that his self-funded campaign has spent relatively little on voter data or outreach. They showed $200,000 in list rental payments to the conservative Newsmax Media, and $47,000 to Targeted Victory, a leading GOP digital firm, as well as $700,000 on field staff and consultants.

By contrast, the campaign has spent at least $1.2 million on hats—presumably mostly for the now-iconic hats bearing Trump’s campaign slogan “Make America Great Again.”

Basically, Trump trusted the laundry.

And as we have learned in baseball, laundry doesn’t win anymore.

For decades, the Yankees bet on laundry … the pinstripes. They relied on counting statistics (home runs, RBIs, batting average etc.) that have since proved to be surface level indicators of success with large performance swings. And they spent a lot of money on those traits. Trump relied on the same type of surface stats—polling data with significant margins of error—and spent big on … hats.

The 2004 Red Sox won the World Series with an analytical approach to baseball.

The 2004 Red Sox won the World Series with an analytical approach to baseball.

To be fair, the modern Yankees have embraced analytics. What Trump just did in Iowa (and presumably has already made the same mistake in New Hampshire and South Carolina) is more the equivalent of what the Philadelphia Phillies have done in recent years. The Phillies built a traditional powerhouse and won for several years. The equivalent would be Trump’s father, who made the family money. The regime of the Phillies then trusted that base to Make It Great Again, year after year, ignoring the best practices and analytics, pouring money into aging names and players until it was the worst team in baseball. The Phillies learned that, in the modern business environment, a brand name and an illusion of success does not build a base of success without a proper analytical background.

The margins between success and failure are extremely slim in modern business environment (especially in winner-take-all contests like sports and politics). Optimizing performance through data, modeling and progressive analytics is table stakes … not an afterthought.

The surprising aspect of Trump’s Iowa loss is that he was in a position to be Moneyballed by Cruz in the first place. Barack Obama famously won two presidential elections with strong local ground games predicted on data and analytics. In 2008, Obama’s approach was a revelation. In 2012 it was considered par for the course and one of the reason’s Republicans use for Mitt Romney’s loss to Obama was the failure of its own—supposedly superior—analytics department.

For someone who purports to be a successful businessman in 2016, it is a surprise that Trump does not understand the value of modeling, predictive analytics and personalized messaging. Trump has always been a successful negotiator … a strong will with a big stack of chips … but that is a 1986 skill, not a 2016 skill.

Editor’s note: This column is an op-ed by ARC editor-in-chief Dan Rowinski and does not necessarily reflect the views or opinions of ARC’s parent company Applause or its affiliates.

Lead image: “Donald Trump” speaking at CPAC 2011 by Gage Skidmore via Flickr, Creative Commons.

  • John Davis

    He spent WAY more than he needed to, as the Cambridge boys took Cruz to the cleaners. Cruz wasted lots of resources, and got a result that is hard to demonstrate as added votes…maybe contributions is the best place to spend that $$$, but that’s not data analysis.

    This article actually does not help the cause of evidence-based decision systems such as those reported in Moneyball. Its just a tad soon to unveil the MISSION ACCOMPLISHED banner for Cruz. Other candidates are using those tools and techniques with MUCH greater efficiency. And they don’t have such a scary product to sell.

    • Sasha Shokolova

      Yeah, Constitutional government. ‘Scary’ product. Meanwhile, the guy with the TRULY scary product is considered harmless because he has goofy hair and the college kids love him. Feel the Bern? God willing not in THIS lifetime.

    • DanRowinski

      The article is not an endorsement of one candidate or another. It was an example how how progressive modeling was effective at optimizing one parties performance (Cruz in this case) while the lack of diminished another (Trump).

  • spintreebob

    Just because the Oakland A’s discovered Moneyball and had a great book and movie does not mean it is new. The very essence of volunteers and/or staff/patronage going door-to-door is that the local precinct worker gets to know his voters and gets to know their motivations to vote. The Chicago precinct captain has always known how to narrow cast his message to the individual voter. Does technology make a ground game better than the paper precinct polling list pasted into a 4×6 little black book? Hasn’t been proved yet. What has been proved is the ground game is an essential part of a complete campaign.

    • DanRowinski

      We’re talking efficiency here and black books that are much bigger and much more accurate. Some of the reports of how Cruz used Cambridge Analytica are fascinating. Changing the script on the phone with different voter profiles and so on. That’s big data employed in a smart way … and proved effective from the last two presidential election cycles.

      Also, on Moneyball: it is a baseball term. But it was not a unique concept. It is really based on a financial concept that derivative traders have been employing since the 1980s.