Three lessons for fundraisers from a recent report into marketing effectiveness.
There’s been a strong shift towards fundraising efficiency over the past 10 years. This shift was supported by better access to data and digital media, which improved segmentation and targeted fundraising communications. The initial result was an uplift in revenue with reduced cost per acquisition. But this is no longer the case and fundraising campaigns must work harder than ever to maintain a comparative year-on-year return.
A recent report on marketing effectiveness conducted by The Communications Council explored why some marketing campaigns perform better than others. Titled the Australian Advertising Effectiveness Rules, the report offers a glimpse at what might be holding fundraising back and what we can do to reverse the trend.
It’s clear from the report that fundraisers are not alone – marketers across every category are facing similar pressures.
“Australia is in a low growth climate where marketing budgets are at great risk of being cut to meet bottom line targets,” says the report.
“This environment creates more pressure for marketers to prove the effectiveness of their investment and can lead to a shift in focus towards efficiency.”
This means pressure for quick wins and immediate growth. Combined with a need to demonstrate short-term return on investment, this is leading marketers to adopt the same approach as fundraisers with an emphasis on direct response sales activation.
An unintended benefit is that this research reveals lessons on how to fundraise more effectively.
Three lessons for fundraisers
- The need to broaden targeting in acquisition campaigns
- The need to run campaigns for longer
- The need rethink how we determine return on marketing investment
In recent years I’ve seen examples of each of these lessons being successfully applied within a fundraising context.
1. Broaden your audience targeting
The problem with tighter segmentation is fewer people are exposed to your brand. This improves short-term efficiency as you target those more likely to give. You should however expect fundraising results to decline over time as a result of poor awareness and a limited prospect pool.
By broadening targeting, more people are exposed to your brand. Over time it develops better overall awareness and salience, which translates into a bigger audience better primed to respond to active giving triggers.
I’ve seen this applied successfully in the United States, United Kingdom and Germany during my time as a global marketing director at World Vision International. Working with our US office, we tested the theory by complementing a traditional campaign by leading with brand storytelling and an engagement layer focused on the need. The intention was to build awareness with a broad audience and then prime those engaging with the content by focusing on the need. The later stage of the campaign built on this with direct response fundraising asks.
The campaign result was a 17% year-on-year uplift in revenue. We repeated the test in two smaller markets and saw similar results. These pilots were limited in scope but indicate the need to further explore the impact of broader targeting.
2. Run campaigns for longer
The second lesson from the effectiveness report is longer term campaigns perform better than shorter campaigns. Intuitively this makes sense. The longer your campaign is in market the better it performs. Budget constrains can make this challenging, as too does internal desire for fresh creative.
As with the above example, starting earlier and staying in market longer pays dividends. Likewise, some not-for-profits are moving to an always-on approach that they dial up during peak periods. Local examples of running campaigns in market for longer are The Smith Family and Fred Hollows. Both have grown as a result of sustained market presence and consistent creative.
3. Rethink how we determine return on marketing investment
Putting the above two lessons into practice means prioritising sustainable growth over quick wins. This can be a hard pill to swallow when the CFO is demanding to know why cost per acquisition is up and some marketing channels hardly converted. Yet the third lesson is rethinking how we measure return on marketing investment.
Doing so requires a strategic commitment to long-term growth. Or, at the very least, acceptance that it’s not the role of every marketing channel to convert. Some channels are best used to build awareness, some to create interest and others to convert. We can only optimise performance if we’re measuring each channel based on what it’s intended to do.
If your organisation can shift its approach to planning campaigns and measuring their performance, it can break the cycle and start optimising for fundraising effectiveness rather than fundraising efficiency.
Stephen Ellis is an independent marketing consultant and trainer helping not-for-profits grow. He has supported numerous high profile not-for-profits, social innovators and foundations. Stephen previously worked with World Vision International as global digital director where his team was responsible for fundraising growth in major markets around the world. Stephen is a regular speaker and member of the FIA’s Victorian committee.