For the last decade, Google and Facebook/Meta have been incredibly effective and cost-efficient channels for charities and causes looking to find and acquire new donors. We estimate that for our nonprofit partners, 4 in 10 of the digital donors come from either Facebook or Instagram over the last two years.
These platforms are also a place where nonprofits can reach a huge amount of their existing and potential audiences – in the US, 91% of the population (300 million people!!) access their account at least once a month.
However, in 2022 we have seen noticeable increases in the costs of acquiring donors and supporters on Facebook. We’ve seen many reports on how rising costs on Facebook negatively impact DTC businesses, however the impact on nonprofits and advocacy organizations has been much less discussed. Today, we wanted to share a few insights that we have seen across our work with Doctors Without Borders, UNICEF, the UN Refugee Agency (UNHCR), Amnesty International and many more.
What happened?
The rollout of new privacy controls on IOS 14.5 changed Facebook’s ability to track users, lowering the effectiveness of their targeting and attribution, which had been a unique strength of the platform. Facebook has consolidated ad topics and interest categories, including the removal of detailed targeting options that relate to topics people may perceive as sensitive.
We recognize and support efforts made to protect privacy and believe reform has been a long time coming. In this instance, the result is that it’s harder to target niche audiences and serve the right content to the right people, which is a critical way most nonprofits and causes raise money. Thus, it’s something nonprofits and causes must develop plans to address.
Costs are climbing!
With reduced targeting abilities and greater advertising competition, the cost to reach audiences and gain their interest is climbing — not insignificantly. It’s no secret that Facebook CPMs (cost per thousand impressions) are on the rise. The average CPM across all industries was 25% higher in 2021 with cost per acquisition rising alongside that.
Social issue ads are resumed but for how long?
You’ll no doubt remember the pause on ads in the US about social issues, elections and politics, put in place after the 2020 election. This provided an additional challenge for nonprofits looking to raise awareness or funds around sensitive topics. Ads that pertained to social issues were disapproved and, in some circumstances, accounts suspended. All of which takes time and resources to navigate.
So, what now?
If relevant, a rapid response strategy can help you get ahead
We work with a lot of organizations in the emergency response and humanitarian relief sector and, to move as quickly as we can in a crisis, we have an emergency protocol which includes components such as pre-approved ad content and accelerated internal approval processes, to allow us to get content out and fundraise within 12 hours of a crisis. Being quick to market also helps cost efficiency, reaching audiences before the platform becomes saturated with competitors targeting the same people. Often we raise up to 80% for an emergency in the first 7 days.
Every hour counts.
Outside of emergencies and/or rapid response, always-on isn’t always effective
Most organizations want to be visible to existing and potential donors across channels year round. To do this meaningfully requires audiences, content and formats be updated on a regular basis and performance reported on and optimized consistently. This may be attainable for some of the larger non-profits but it does not make sense for many. To avoid having to pay every time you want to reach people, invest in collecting and segmenting first party data. We have found email to be such an untapped channel for so many (we helped UNICEF USA triple their email revenue in 18 months). It is highly trackable and offers many opportunities for engagement with audiences via informative content personalized to their interests and donor history.
Brand building can lower acquisition costs, but it’s a longer term approach
Non profit organizations with impactful brand values, identity and a name that is recognised by audiences will often be less impacted by overall market value as they are achieving the cut through needed with potential and existing donors. It can be difficult to be heard if you are fundraising for a cause or appeal where there’s a lot of similar activity happening and brand is often where the opportunity to stand out comes from. But we recognise that it can take time, resources plus investment and not always offer the immediate ROI that acquisition does.
And let’s not forget about #stopfundinghate
We can’t deny the role the platform has had in aiding the spread of misinformation, hate or potential acts of violence and, while we recognize it is a complex area to consider how to regulate social media without breaking the First Amendment, Facebook could and should be doing more with both the profits and influence they hold to help drive positive progress in this arena. So, for some organizations we work with, a dependency on Facebook is also a moral dilemma and one they would like to have options to distance from should their position not improve in the future.
Diversification is protection
Any robust donor acquisition and engagement strategy should span across multiple channels, including a testing strategy that enables you to find out more about your audiences and what drives them to respond and take action, in order to implement this insight into future iterations of your campaigns. But it can be daunting to know where to start.
Outside of social media, build opportunities with VOD, audio & search
The pandemic has led digital advertising revenues to soar in 2020 and 2021; however, there is opportunity to utilize channels that are still growing and expanding. Video on demand (VOD) remains one of the fastest growing channels and offers an opportunity to drive greater brand reach, and subsequently improve acquisition performance with the right content and retargeting strategy.
Another platform to explore in 2022, if you haven’t already: 40% of the US population use voice search features. The channel has grown from emerging to almost mainstream. You may want to consider building it into your donor journey, or get set up to accept donations from Alexa. And outside of voice, what about other areas of audio such as podcasts? There may be relevant advertising opportunities you could consider, to connect to audiences here.
These kinds of top-of-funnel advertising channels may not have the cost-efficiencies or direct revenue as we used to see on Facebook, but they can be critical for building recognition of your brand and also for driving search volume. Search is still the bread-and-butter for revenue generation — most nonprofits returned between $3-4 for each dollar spent on search advertising last year.
Build out opportunities for first party data collection and engagement
Yes we’re talking about email! With as much energy as you put into donor acquisition, consider data acquisition and the right avenues and opportunities to gather email addresses from potential donors. Beyond your website, think about offline events and new campaign strategies focused on lead generation. This allows you to explore the conversion potential of such emails, not just to one-off donations but monthly giving.
Donors of tomorrow are more likely to use other platforms
Want a strategy that starts to think more long-term and is future proof? Under 18s are less likely to use Facebook than the average user, turning instead to platforms such as Snapchat, Twitch, and TikTok.
However you’re preparing for it, we encourage you to think about not just the role of Facebook in your donor strategy but how you are mitigating the potential risks of relying on this channel to reach and acquire donors.
Prepare and plan for different scenarios such as social issue ads being turned off around midterms – get ahead of your ROI dropping and tighter restrictions making your messaging less visible and more expensive. Test new channels and grow your own database outside of platforms so you can be in charge of what they see and how. And, if you need any advice? We’d love to hear from you.