Maximising charity marketing campaigns’ effectiveness
New research has revealed that the effectiveness of charity marketing campaigns has declined over recent years, despite the charity sector being an above average performer compared to other industries.
In one sense, charities are an advertising sector like no other: driven by purpose and tasked with creating deep-rooted emotional connections with consumers while simultaneously asking them to part with their money.
But at the same time, charity marketing must behave like any other ad sector and comply with the principles of brand building and direct response, the mechanics of performance marketing, and the power of creativity, just like any other brand, irrespective of sector.
But in order to emerge successfully from the pandemic and to weather the cost of living crisis, charities must renew their purpose and vision, especially where their marketing is concerned.
A note about metrics
Before beginning, I should explain the four kinds of effects measured by the research:
1. RESPONSE EFFECTS – effects relating to direct response and performance marketing campaigns (e.g. conversions, acquisitions, sales, bookings, footfall, downloads, cost per acquisition efficiencies and response rates).
2. BRAND EFFECTS – effects that specifically relate to brand measures, e.g., brand awareness, ad recall, consideration, purchase intent, brand trust, brand perception, recommendations, customer satisfaction and net promoter score.
3. BUSINESS EFFECTS – effects related to overall business performance, typically pointing toward the long term sustainability of a business, e.g., profit, market share growth, customer penetration, loyalty and shareholder value. In the case of charities, stakeholder value.
4. CAMPAIGN DELIVERY EFFECTS – these measures are essentially media planning campaign inputs (e.g. reach, frequency and impressions) and so-called “vanity metrics” such as clicks, likes and shares. While they say little about campaign effectiveness, they reveal a great deal about how marketers are currently measuring campaigns.
These effects are sometimes taken as an average and are reported as the “total number of effects”.
Evolution of charity campaign effectiveness
While the research found that charity campaigns are above average performers, generating more effects than the cross-sector average, it also found that charity campaign effectiveness has been deteriorating over time, peaking at 3.4 total effects per campaign in 2019 and dropping to 2.3 effects by 2021 – putting charities below the cross-sector average.
Charities’ above average effectiveness is fundamentally driven by their ability to drive short term response effects, typically relating to donations and sign-ups all achieved at the lowest cost per acquisition (CPA).
However, charities are less effective than average at generating brand effects, which typically intend to change how consumers think and feel about organisations in a bid to stimulate future response. It’s not easy to shift deep-rooted perceptions about a brand but they can be a vital boost to marketing activity.
The overall picture of effectiveness masks the underlying tensions between generating brand and response effects with charity marketing communications. The combined effects of a well balanced approach to response goals and brand building should not be lost on the charity sector and will be the key to longer term marketing impact.
Response effectiveness is declining
While charity marketers are highly adept at hitting response-based KPIs (key performance indicators), it was a decline in response effectiveness that prompted the overall effectiveness decline in 2021. The average number of response effects halved from 2.6 per campaign in 2020 to 1.3 in 2021.
Of course, the last few years have been exceptionally challenging for marketing departments across all sectors due to increased regulation, the impact of Covid and the current cost of living crisis. Nowhere has this been felt more keenly than by the charity sector where the impact of GDPR (General Data Protection Regulation) was felt a long time before others after some high profile investigations. Household budgets are also under more pressure than ever, and this has inevitably played its part in the decline in total campaign effects generated.
In 2020, in response to the spring lockdown, charities rallied into action after on-street and in-store donations were wiped out, charity shops were closed and fundraising events were cancelled or postponed. Through a series of highly effective campaigns that maximised the potential of traditional direct response channels, such as direct mail and email, the nation responded to charity advertising.
But since then, response has tailed off, with the marginal returns of retaining the same targeting strategies diminishing year on year while consumer budgets are under more pressure from the rising cost of living.
In addition, the increased proliferation of marketing channels has presented a number of challenges for fundraisers around understanding and using how best to use them, ensuring these are maximised as far as possible and against very tight budgets. As such, knowing where to put a charity’s hard-earned cash to ensure the continued growth of both their supporter base and the vital revenue they generate is not easy.
Creating more effective campaigns
The effectiveness of a charity campaign can be impacted by fundamental campaign planning decisions such as which consumers to target (should they be retaining existing donors or pursuing new acquisitions?), how best to appeal to them (through direct response or brand building?), and how long for? Each planning decision must be carefully considered in the context of overall campaign strategy, and each decision will no doubt involve a set of trade-offs.
The research provided a unique source of insight into different campaign strategies and revealed a number of interesting insights. The first was that the duration of charity campaigns – relatively short term at up to three months – has changed little throughout the pandemic.
However, while charities are more effective than average at driving a short term response, it is long term campaigns that generate the most effects overall. With only 8% of charity campaigns running in the long term (i.e., for over a year), this is one area where charities could potentially make a significant difference to their campaign effectiveness.
Secondly, the proportion of charity campaigns with a dual response – that of a pure direct response objective combined with a brand objective – has doubled during the pandemic. With marketing budgets under more pressure than ever during the pandemic, efficiency of spend was of paramount importance, so campaigns that could both boost donations while also raising brand awareness and consideration is one way in which efficiencies can be achieved.
In addition, campaigns with a dual objective are more effective than those with either a singular response or a brand objective. Despite dual objective campaigns doubling from pre- to post-pandemic, they remain in the minority (28%), and it’s clear that a greater shift in thinking is required to address the decline in charity campaign impact.
Charity campaigns are much more likely to have a pure acquisition-based objective compared to the average campaign, with 62% solely focused on acquiring new donors vs 52% average. While this figure has changed little in the pandemic era, what is noteworthy is the rise in the proportion of campaigns with a dual retention and acquisition focus, such as campaigns that target as broad a market as possible, e.g. those that target people who are current donors alongside potential new donors.
The research also showed that charity campaigns with some sort of acquisition-based objective are much more effective than a sole retention-based target. Existing donors are not likely to continue making unlimited donations when they are already invested in a cause. Exploring new audiences and targeting the entire addressable market is a cornerstone of how organisations grow.
Finding the most effective channels
Media channel selection is the final – and crucial – element in campaign planning that can influence the extent of a campaign’s success. Planning a brand campaign involves assessing audience reach, frequency, context and attention, while planning a response campaign involves evaluation of spend efficiency (such as cost per acquisition) and directly attributable revenue-related impact. Either way, understanding which channel will be the most effective is an important consideration.
Irrespective of their size and the nature of the project, charities want to know which channels are best for them right now. The answer to that question is this depends on many factors, and the research revealed which channels work for the campaigns that charities and agencies themselves think are the most successful.
Firstly, a multi-channel approach matters. Two-thirds of charity campaigns run across multiple channels (compared to just over half for average campaigns) and those that utilise three or more channels are more effective at generating brand, response and business effects than those running with one or two.
In fact, the more channels that are added to the media schedule, the greater the brand effects (awareness, consideration and brand perceptions), thanks no doubt to the role that different media play in priming audiences in different contexts and at different times of day.
For campaigns looking to recruit new donors, new channels can mean new audiences and a wider net from which to engage potential prospects. A well integrated multi-channel campaign is therefore a must when looking to reverse the decline in charity campaign impact.
Direct mail followed by TV and digital display are the most effective channels at driving immediate response for charities. In a sector where short term charitable appeals can be triggered by changing global events, it is vital to understand which channels are best at generating the donations vital for achieving campaign success.
Whilst TV and digital display are also effective channels in driving immediate response, TV also drives an above average response and above average brand effects. If planners are to give more consideration to campaigns with dual brand and response objectives, then TV becomes a vital component of campaign planning.
Data is key
The results of this research demonstrate that, in order to inform the role of marketing in building charity campaigns, charity CMOs need to be armed with the data-driven insight, while at the same time striving to measure and attribute campaign success more accurately at a time when budgets are under greater scrutiny than ever.
By examining their campaign duration and the channels they are employing, charity marketers stand a much better chance of maximising their effects and hopefully reversing the downward trend of recent campaign effectiveness.
