Charities are losing out from competition in paid search
John Onion, Managing Director of digital marketing agency upriseUP, argues that competition for paid Google searches is diminishing the effectiveness of charities’ online fundraising campaigns, restricting the amount that goes to good causes.
This article was written by John Onion, Managing Director of digital marketing agency upriseUP. John started upriseUP to deliver better digital marketing. Overseeing campaign results keeps John passionate in the hunt for opportunities – and continued improvement.
Search Engine Marketing (being listed on Google), is an extremely effective means of reaching valuable audiences; nothing beats targeting those who are actually looking for an organisation such as yours (or your competitors).
As there are only a limited number of people looking on Google for a particular organisation, this audience is not only valuable, but in scarce supply. And here’s the problem: In paid search, the cost of an ad is effectively calculated in an auction. Charities need to bid against each other for each click.
I’m not talking about the free ‘Google Ad Grants’, which without going into detail, are penalised beneath paid Google Ads. Google’s latest changes in December have been the final nail in the coffin for using the ‘Google Ad Grants’ for a concerted fundraising campaign anyway.
The danger for charities using ‘paid’ ads is that some competing charities (or over-zealous agencies) are working on a model of trying to maximise on donation revenue achieved for their own organisation. This is increasing the associated costs for everyone, to the detriment of the actual funds raised for charities.
For example, let’s say that the keyword or search query: “Donate to children’s charity”, on average returns £5 to the charity for every click made. Charities would likely be able to increase their total revenue (minus costs), by bidding as close to that £5 as possible; meaning that they would achieve far more clicks. To that extent, they might bid £4.50.
When charities compete this way, the outcome is troubling. Effectively the typical donor knows little about the costs involved with Google. She believes that she’s donating to a particular cause, not realising that actually 90% of the money she is donating is being paid to Google’s coffers for placing the ad. It might not be over 90% in all cases, but from what we have seen at upriseUP, we believe on average across various causes that it is over 50%.
The clear loser here is the beneficiary.
Let’s imagine an International Disaster campaign, with many organisations on the ground and many Fundraising departments working extremely hard to raise money for urgently needed projects. There is little time with which to co-ordinate, and extreme pressure on each individual fundraising team to generate a sizeable income quickly.
If charities don’t co-ordinate their efforts and continue bidding against each other, the final amount of funds available to that particular cause – from paid search marketing – is significantly diminished by Google’s cut.
And, nothing against Google, but that isn’t what we want to see.
It won’t be easy, but this is a substantial issue and I believe it should be discussed within the sector. Open discussion on fundraising forums is probably overdue too.
Ideally what I would like to see is for those conversations to involve Google, who are perfectly placed to be able to set caps on bidding for fundraising related terms. This would be a big task and it would mean a (proportionately small) hit to Google’s revenue. But that shouldn’t prevent us from at least speaking to Google, who may have a socially responsible reaction when presented with the issue. This is a pretty major concern, and it may also generate significant social pressure.
The other organisation I would like to see involved in this discussion is the Charity Commission. They could actually open the debate and possibly represent the sector by taking details of the issue to Google. If exact rules cannot be established (nor a change in policy with Google) perhaps a self – regulatory approach could be agreed upon. The Charity Commission would be well placed to co-ordinate this effort.
There are several layers of complexity including the many nuances surrounding paid search. Reducing the average cost per click to charities in the UK might open us up to competition from charities registered in other countries; some of whom are already targeting UK audiences. It might also be the case that commercial operations would be wanting to bid on some of the same keywords.
However, there is a very big prize here – making paid search work much more effectively for charities. This should drastically improve the good that can be achieved from online donations, and I think it is well worth the effort to try to resolve.
It would be brilliant if we can amass a group that would like to progress this subject. If you are interested in finding out more, or recognises the issue and would like to be part of a group seeking to find a way to resolve this, please get in touch: email@example.com