Donald Trump Bets Big on Online Advertising

(Bloomberg) -- Donald Trump placed a big bet that online advertising will help him defeat Hillary Clinton in the presidential race, directing $8.4 million in July to a digital marketing company in Texas, according to his latest campaign filing.

The spending is more than five times what Trump paid the firm, Giles-Parscale of San Antonio, in June, and appears to be outpacing any similar effort by the Democrat.  

"That's beyond a tremendous amount of money to spend on digital," Austin Barbour, a Republican fundraiser and political strategist in Mississippi, said in a tweet on Sunday. "Almost hard to figure out how to compute this number."

Clinton, on the other hand, reported just $132,500 spending on online advertising in July, with Washington-based Bully Pulpit Interactive. Yet, Priorities USA Action, the super-PAC that supports her, has said it will spend $35 million on digital advertising, while another outside group, Correct the Record, is putting $1 million into challenging negative comments about Clinton on social media sites like Reddit and Facebook.

The online push by Trump may reflect his expanding efforts to raise outside cash, after relying mostly on his own funds during the Republican primary campaign. Earlier this month, Trump touted his campaign's success in raising $64 million through online and direct-mail operations, although that figure included some funds raised through other channels and destined for the Republican National Committee.

The Trump campaign itself gathered $36.7 million in July, compared with $52.3 million for Clinton. Trump, who contributed $2.1 million of his own money, is looking to close the fundraising gap by courting small donors through e-mails and postcards, and by hosting wealthy Republicans at fundraising events that cost as much as $50,000 a seat.

Trump's filing with the Federal Election Commission on Saturday also showed $100,000 to Prosper Group, which raises money through text messages to supporters, and $100,000 to Cambridge Analytica, a data and analytics firm that is owned in part by Robert Mercer, a prominent Republican donor.

Brad Parscale, a co-founder of Giles-Parscale, has consulted for Trump's campaign since it began and was named digital director in June. Like Trump and some of his top advisers, the firm hasn't worked on a major political campaign before. It has served Trump for years, however, building websites for his family's businesses.

"Every day millions of Americans use the internet to get their news, be entertained, and connect with people," Parscale said in an interview on Aug. 19. "It is the perfect medium to help Donald Trump."

It's likely that online fundraising helped with the $12.7 million that Trump collected in contributions of $200 or less during July. Clinton brought in $11.4 million from these small contributions.

Persuading loyal, small-dollar conservative donors to give shouldn't be hard, said Walter Lukens, president of the integrated marketing firm Lukens Company. "We're not persuading them -- there's a brush fire out there and we're throwing gasoline on it."

Still, if Trump is spending a lot of money on raising more money, that's less to spend on reaching undecided voters in battleground states. He bought no television advertising in July; the campaign said just this week that it had made its first $4.8 million purchase. Clinton spent $25.8 million on TV ads last month. 

The Trump campaign spent about $1.8 million in July on the "Make America Great Again" gear, including hats, mugs, and T-shirts, that it sells to raise money. Trump didn't report any significant expenses for direct-mail fundraising, which suggests that those expenses are being borne by an affiliated committee that works with Trump and the RNC. That group wasn't required to disclose its finances on Saturday.

Since beginning efforts to raise money from donors in May, the Trump campaign has taken tentative steps to embrace super-PACs, the independent groups that can collect contributions of unlimited size from wealthy donors and corporations.

But reports filed on Saturday suggested that a deluge of money that could help Trump's super-PACs draw even with Clinton's has yet to arrive. Two groups that reported their figures received a combined $4.4 million in July. A top official of a third group, which doesn’t have to report figures this month, said in an interview on MSNBC this week that he's raised $10 million so far.

By comparison, Clinton's main super-PAC pulled in more than $9 million in July, and finished the month with over $38 million cash on hand heading into the final three months of campaigning before the Nov. 8 election. 

To contact the authors of this story: Zachary Mider in New York at zmider1@bloomberg.net, Bill Allison in Washington at ballison14@bloomberg.net.

To contact the editor responsible for this story: Joshua Gallu at jgallu@bloomberg.net, Ros Krasny