In this guest post, Matt Moorut, digital marketing executive at Technology Trust looks at the reasons behind why charities aren’t investing in online advertising.
A recent study by nfpSynergy has shown that the charity sector is far less inclined to spend on online advertising than the private sector.
UK charities currently only spend 2% of their advertising budgets on Internet advertising, compared to the rest of the advertising industry, which spends around 46% on such adverts.
In fact, in each of the past 8 years, private companies have spent more and more on online advertising while cutting back their spend on print advertising, including direct mail and ads in printed media such as newspapers and magazines. This is very different to the charity sector, in which direct mail still takes the vast majority of advertising budgets.
Here are some more results of the study:
- Charity spending on advertising has nearly reached £400m in the UK.
- This makes up 2.9% of the UK’s total advertising spend, which is a figure that has remained fairly constant over the past 8 years.
- Charities spend the majority of their advertising budgets on direct mail (61%).
- The advertising industry as a whole has increased spending on Internet advertising from 17% in 2006 to 46% in 2013.
- Meanwhile, the charity sector continues to spend about the same amount on online ads (1% in 2006, 2% in 2013).
- Charity spending on TV ads increased to 20% in 2013, while spending on radio (3%), press (9%) and outdoor ads (2%) barely changed from the year before.
There are a number of factors that could have led to charities spending much less online than private advertising firms. It could be down to:
- Risk aversion, as charities don’t want to waste donors’ money on untested campaigns.
- A lack of the skillset necessary to produce online ads within charities.
- Reluctance to take up new, digital techniques among ageing workforces that are focused on supporting a cause, not changing methods.
- A level of success from traditional ads causing limited inclination to change methods.
- The benefits of online grant schemes such as these.
- The nature of charities’ work, as they simply don’t need to spend as much as the private sector to get people to share their content and create a successful campaign. After all, in spite of the findings of the nfpSynergy survey, over a quarter of all fundraising now comes through digital channels.
Each charity will have their own reasons for avoiding spending on online advertising, and this is probably a combination of more than one of these factors. Regardless, as the Internet becomes more and more prevalent in peoples’ lives, you risk falling behind if you don’t exploit online ads as much as you can.
How to allocate funds
As with all advertising, it’s important to do your research rather than jumping in blindly. This is especially true in the charity sector, where you’re dealing with donors’ funds and are obliged to spend sensibly.
With this in mind, the first action should be to look at your existing advertising and marketing efforts to see what’s working and what isn’t. You can then reallocate a portion of funds from your least successful campaigns to small-scale online advertising. If these adverts prove to be successful, then pursue them further. If they’re unsuccessful, find out why they didn’t work and make necessary changes.
In terms of the specifics, exactly how you spend your budget is up to you, but some elements that you might want to consider spending on are banner ads on specific sites and social media, retargeting (adverts that ‘follow’ a user), investing in good SEO ranking (how high you appear on searches on Google and others), making sure your website’s design is intuitive and secure, connecting your email marketing platform to a donor management tool to better tailor messaging, and, most importantly, creating great content to separate yourself from the crowd.
As more people jump aboard the online advertising bandwagon, acquiring space for adverts will become more expensive on the most effective sites. It also becomes more challenging to build an audience once a market becomes saturated. With that in mind, you should get involved as soon as possible.
At Technology Trust, we used to spend the majority of our marketing budget on print advertising and a much smaller portion on digital marketing, but we’ve switched that around over the past two years so that we now allocate more to digital marketing than print media. What we’ve found is that we can reach far more people with lower costs, while conversion rates have remained as high as they ever were, and success rates have almost doubled.
The exact results of your own online advertising will depend on your audience and the efficacy of your ads, but generally speaking, you’ll find there are lower costs for reaching more people than through traditional marketing. If you are struggling to connect with younger people, you might have more success online (for advice on connecting effectively with millennials, click here). You’ll also find more opportunity to tailor your messaging to individuals than through traditional methods.
If the results of the study are accurate, then the charity sector as a whole is underinvesting in Internet advertising. Don’t abandon traditional advertising altogether if you’re having success from it, but you should be as prudent as you can be with your marketing budget to best raise funds for your cause. If you can have more success online, and our experience suggests you can, then it’s worth investigating, even if you only allocate a small portion of funds at first. Current opportunities won’t be available for ever, so don’t miss your chance!
Digital technology is the great enabling force of the 21st century according to new report
Virgin Money Giving has announced a series of live online events designed to help charities with their corporate fundraising skills
New campaign launches to increase the digital expertise of charity trustee boards