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Digital Ads and Nonprofits: It’s a Match!

By Elisa Silverman on May 10, 2017

Reading Time: 11 minutes

It’s that time of year again! M+R, in partnership with the Nonprofit Technology Network (NTEN), has released its annual benchmark report on nonprofit digital activities. It’s chockablock with interesting information about how nonprofits are using various digital tools and how it’s working out for them. M+R has a great interactive site to explore the report’s details, which I highly recommend.

Rather than just summarize their report, I’m taking a close look at one issue the report revealed: The growing use of digital advertising by nonprofits.

According to the benchmark report, digital advertising spending by the nonprofits studied grew by 69% over the last year. Not all nonprofit sectors grew their digital spends at the same rate. The biggest investor in digital ads according to M+R’s report was the cultural sector, which increased its digital ad spend by a whopping 159%. At the bottom end, but still a nice boost, were international nonprofits averaging a 53% increase in digital ad spend.

PW nonprofit digital ad 1

The report also notes a discrepancy in digital ad spend growth by size of the organization. The largest nonprofits increased their spending by more than half as much as the smaller organizations. I can only speculate, but I can see how smaller organizations with less budget and perhaps less access to digital ad buying expertise may be less willing to allocate budget to digital ads. Yet they do have options to gain that experience and minimize their risk (more on that below), which may be well worth taking. Especially when you look at the positive impact digital ads have for the nonprofits using them.

Digital ad contribution to nonprofit’s bottom line

Alright, the fine folks at M+R really really want to make sure that we don’t misunderstand how we characterize the value of digital ads for nonprofits. Fair enough. Per the M+R team’s explanation of their findings: for every dollar nonprofits raised online, they spent 4 cents on digital ads. This isn’t the direct ROI for their ad spend. Attribution remains a challenge. Should that donation that came in through an organization’s main donation landing page be attributed 100% to that page? Or did that new donor first come across the organization through a digital ad or perhaps some social media content? Maybe a friend forwarded an organization’s email? Tracking online touchpoints to attribute a donation is getting more sophisticated, but remains imprecise and perhaps out of budget for smaller organizations.

In any case, M+R’s data point is an indication of how nonprofits are allocating their budgets. At a high-level, this benchmark provides an idea of how much a nonprofit may want to devote to digital ad spends relative to their fundraising goals. In their example, a nonprofit that raised $1 million online spent $40,000 on digital ads. Does that mean if you spend $40,000 on digital ads you’ll raise a $1 million? No. Especially since we don’t know how big a percentage that $40,000 is in that nonprofit’s overall digital marketing budget. But it is a benchmark.

To quantify some actual ROI on digital ad spend, we can look at Goodwill’s experience. A market research firm and the Ad Council decided to study the impact of a mixed ad spend PSA campaign. They studied a Goodwill campaign that ran from September 2013 through April 2015 which had TV, radio, print and digital ads.

The campaign raised 363 million pounds of donations. The digital ad spend accounted for only five percent of the media budget but accounted for 49% of the donations. Per the market research firm’s model, 177 million pounds was raised as a direct result of the digital advertising. The bulk of the media budget was taken by the TV ads, 69% of the spend, and accounted for 33% of the donations.

Adweek put it this way: “… if it were a traditional advertising campaign for a brand, the ROI of digital would have been more than 10 times that of any other media type.”

Breaking down types of digital ads

M+R included display ads, search ads and social media ads in its “digital ad” bucket. These terms can be slippery for a lot of people, so here are some working definitions and examples:

Display ad: These are the ads you see on websites that look like obvious ads. They appear at the top of a web page (banner ad) or interspersed in the body or as a sidebar ad. For example, here’s a nonprofit display ad for CASA that appeared on a hockey blog I read:

PW nonprofit image 2

Search ads: Whenever you run a search through a search engine, the top spots are reserved for paid ads relevant to your search. When I ran a search for “services for autistic adults,” these were the search ad results:

PW nonprofit image 3

Social media ads: Social media ads can be harder to detect or can appear as a typical sidebar ad. For example, you can “boost” a Facebook post, which expands its reach within the newsfeeds of a targeted market. In contrast, an organization can design and publish a typical display-looking ad, which gets published in a right-hand sidebar on a Facebook user’s home page.

According to the Q1-2017 4C Insights report, social media ad spending up 61.5% over last year. They looked at the social media ad spend by more than 900 brands on Facebook, Instagram, Snapchat, Pinterest and LinkedIn. Social media ads are big, especially as organic reach diminishes.

The M+R benchmark report found that nonprofits paid to increase reach for 2.7% of their Facebook posts as their social media audience on Facebook grew by 23%. When it comes to deciding where a nonprofit should place social media ads, note that the M+R report found that Instagram had the greatest audience growth, more than doubling in the past year.

Wondering about mobile ads? The M+R report didn’t break down mobile ads. (Look for a future post here on nonprofits and mobile marketing in general.)

Ways for nonprofits to use digital ads

Of course, behind every digital ad is a goal and a landing page. At least, there should be if you want a digital ad campaign to be successful. Before building the content of the ad and the landing page behind it, first specify the goal of the campaign. The nonprofits surveyed for M+R’s benchmark report spent 46% of their digital ad dollars on new donor acquisition. After that, they spent 23% on branding, 18% on lead generation, and 14% of existing supporter conversion.

As M+R summed up, this means that 60% of nonprofit’s digital ad spend went towards driving donations. Not a bad goal to have, especially considering that M+R’s benchmark report also found that 26% of all online revenue came from email solicitations. That means 74% on nonprofits’ online donations came through other channels.

Here are other ways nonprofits can use digital ad campaigns:

  • Testing new messages: Before you build a major campaign around a new fundraising or advocacy message, test out a few iterations through digital ads. You can run smaller, less expensive campaigns to field test which messages are resonating most before investing in a major campaign around one new message.
  • Retarget website visitors who aren’t yet leads: This accounted for 18% of the digital ad spend by the nonprofits surveyed. Retargeting campaigns can be highly effective means of capturing names and emails of people who’ve shown interest but haven’t yet revealed themselves. Segment retargeting campaigns based on which pages were visited. People who abandoned your donation page can be retargeted with a donation campaign driving traffic to a donation landing page. People who read about a certain program or initiative can be retargeted with a campaign that attracts them with new information about that program and directs them to a landing page.
  • Campaign or event-specific solicitations: If you have a special event coming up or a discrete campaign running, use retargeting to motivate action and expand your reach. These specific campaigns are great opportunities to attract people you might not otherwise catch. When you define the audience for one of these campaigns, include criteria that show an affinity for your mission, even if not a direct interest. Let’s say you’re a historic preservation nonprofit and you’re trying to raise funds and advocacy to save a particular city building. Don’t just look for people who’ve shown interest in architecture. Look for people who’ve shown interest in urban living, design or history. One of digital advertising’s strongest powers is attracting new eyes to your cause; a perennial need for any nonprofit. So scope out a potential audience that will have people you can interest, but who might get scooped up through more direct target market definitions.
  • Promote high-value content: How much time and effort do you invest in creating an informative, beautiful annual report each year? Maybe your team went on a mission and from that you can create a moving video report. Or you’ve put together an in-depth report designed to inspire awareness and advocacy for your constituents? Don’t keep your light hidden under a bushel. Run digital ad campaigns directing traffic to a download landing page for your premium content. It’s a tried and true lead gen strategy that will grow your lead database.
  • Present rebranded organization: If your nonprofit has entirely rebranded, don’t just let your current community know. Take it as an opportunity to bring in donors and advocates who weren’t moved by your previous branding.

Getting started with digital advertising…

…can be intimidating. People hear horror stories of out of control PPC spends. Fortunately, there are numerous resources designed specifically for nonprofits to help you out. One not to overlook is Google’s Ad Grants program, which offers up to $10,000 of in-kind advertising on Google’s AdWords platform for eligible nonprofit organizations.

Digital ad tools, including those on social media platforms, typically let you set a maximum daily spend budget and overall campaign budget. You can start with a campaign as small as a $50 digital ad budget. Keep your expectations in line. These initial campaigns should be as much about learning how to set up and optimize a digital ad campaign as gaining new leads or donors.

Approach every digital ad campaign as you would any other: Have a clearly defined goal and target market, specify metrics that indicate what qualifies as success, and create awesome content (ad and landing page design and copy) that aligns with your goal and target market. Specify your budget and your timeline, and stick to it. Then take what you learn (goal met or not) and use it to run an even better digital ad campaign next time.

Here’s a nice overview of the details of setting up and running a digital ad campaign. Talk to your peers and colleagues who’ve run digital ad campaigns for their organizations to learn from their experience. Do have some digital ad experiences you want to share? Leave a comment below.

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Elisa Silverman is a B2B content writer with a background in law and technology, who’s spent a career helping diverse groups of people communicate well with each other.

Also published on Medium.