Liberal sources who have worked with the party on its digital campaign strategy over the past three years say a rift between the federal organisation and state branches underpinned the ditching of i360, a controversial American voter data machine the party used in recent state elections in Victoria and South Australia.

The rollout of i360 - which began in 2016 and has cost the Liberals an estimated $1.2 million - marked a significant investment in the new frontier of Australian political campaigning: data collection.

Both major parties curate databases to identify swing voters and tailor campaign messages. i360 uses hundreds of data points on every voter - from how many bathrooms their house has to whether they have hearing difficulties or enjoy cruises - to predict how they will vote and how they will respond to different campaign messages.

The company is run by American billionaires Charles and David Koch and was formed five years ago to assist the country's conservative Republican Party.

Labor has carefully invested in sophisticated digital campaigning apparatus over recent election cycles but the Liberal Party has largely lagged behind. Those with a detailed understanding of its efforts describe an operation of "low IT maturity" and hamstrung by leaders hesitant to move on from decades-old software.

Recent changes to the parliamentary expenses guidelines allow each member of Parliament to spend an undeclared portion of their taxpayer-funded office budget on voter software. The change presented the Liberal Party with the dilemma of sticking with current provider Parakeelia - a Liberal-owned firm that returns much of the taxpayer funds it receives back to the party - or abandoning the lucrative revenue stream in favour of the more sophisticated i360 tool.

One source who helped the Liberals implement the i360 system said federal figures urged branches to retain Parakeelia, despite protests from state branches.

"i360 was positioned as the silver bullet that would solve all of the Liberal Party's data problems," the source said. "But because it really threatened the monopoly that Feedback had in the party, there was a massive rearguard action to quash it."

A Liberal Party spokesman confirmed the party was not using i360 for the May 18 federal election but did not elaborate why.

"The federal Liberal Party organisation has not used i360, and will not be using i360 for the federal election campaign," he said.

After the 2014 state election, South Australia Liberals travelled several times to Ohio and Arizona in the United States to meet with American political consultants and be shown the i360 service. At least one trip was attended by current South Australia state director Sascha Meldrum and James Stevens, who is contesting outgoing defence minister Christopher Pyne's Adelaide seat of Sturt.

The party's i360 contract was signed 18 months out from the South Australian election, which Liberals feared left them little time to create a complex new voter data tool.

Doubts over i360 were also magnified by a botched rollout, which sources pinned on Liberal Party operators' lack of digital nous.

There were also concerns the software would be an ill-fit for the party and little understanding of how existing data would be rolled into the new system.

"We wasted all our money on this platform that no one knows how to use," a source said.

The interest in i360 led some within the Liberal Party to raise concerns that sensitive voter data information was at risk of hacking or misuse.

"They were particularly wary of data being hosted in countries that potentially had weaker security laws compared to Australia," another person familiar with the Liberals' digital strategy said.

i360 did not respond to questions on what data it collected for its Australian service.

It is understood a number of Liberal Party candidates were side-stepping feedback for the 2019 federal election and had approached i360 independently in order to use the more sophisticated service.