New research from REaD Group and the Data & Marketing Association (DMA) has found that charity marketing campaign effectiveness has declined over recent years, despite being above-average performers compared with other industries.
What is causing this decline and what can charities do to combat it?
A downward trajectory
The report’s findings revealed that charity campaign effectiveness has been declining over time, peaking at 3.4 effects* per campaign in 2019 and dropping to 2.3 effects by 2021 – falling below the cross-sector average in 2021. Even though charity marketers are highly adept at hitting response-based KPIs, it is actually a decline in response effectiveness that has 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, it’s no secret that the last few years have been difficult for marketing departments across all sectors with increased regulation, the impact of Covid, and the current cost-of-living crisis. That has been especially true for the charity sector where the challenges presented by GDPR were felt a long time before others after some high-profile investigations. Households’ budgets are also under more pressure than ever, and this has inevitably played its part in the decline in total campaign effects generated.
Added to this mix are the challenges for fundraisers around understanding and using the increased proliferation of channels, 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.
How charities engage
Charities, by their very nature, are purpose-driven organisations. Their aim is to create deep-rooted emotional connections with consumers while asking them to part with their hard-earned cash, often for little reward other than a good sense of altruism. Yet at the same time charity marketing is just like any other ad sector: the principles of brand building and direct response, the mechanics of performance marketing, and the power of creativity are not considerations unique to the not-for-profit sector.
One of the questions we are repeatedly asked by not-for-profit organisations, irrespective of their size and the nature of the project (e.g. basic data cleaning or larger campaign planning activity) is: Which channels are working best for charities right now?
Of course, the real answer to that question is, “That depends”, and it depends on so many factors. This research has helped to uncover which channels work for the campaigns that charities and agencies themselves think are the most successful.
Charities above-average performers
Despite the large decline in the number of effects per campaign in 2021, according to the five-year average (2017-21), a typical charity campaign generates 2.9 effects per campaign – making the sector more proficient at generating marketing-based outcomes than the cross-sector five-year average (2.7 effects). Typically, this is determined by their ability to drive more immediate direct response effects, such as donations and sign-ups, rather than brand effects where they tend to underperform against the average.
Total Number of Effects per Campaign
This above-average performance from charity brands puts them at fifth place in the overall sector effectiveness rankings: behind the financial, retail, utility and automotive sectors, but ahead of the remaining majority, including public sector.
Average Number of Effects per Campaign (five-year average)
The majority of charity campaigns are short term in duration (54% ran up to three months), and this has changed little throughout the pandemic. While charities are more effective than average at driving a short-term response, typically generating 3.1 effects per short-term campaign vs the cross-sector average of 2.7, it is long-term campaigns that generate the most effects overall (3.4). With only 8% of charity campaigns running in the long term (i.e., for over a year), this is an area where charities could consider redressing the balance.
A multi-channel approach matters
Two-thirds of charity campaigns run across multiple channels. Campaigns that employ three or more channels are more effective at generating brand, response and business effects (3.4 effects) than those running with one or two different media (2.7 effects).
A well-integrated multi-channel campaign must be considered when looking to arrest the decline in charity campaign impact. 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. If planners are to give more consideration to campaigns with dual brand and response objectives, then TV becomes a vital component of campaign planning.
Ad mail is the most effective channel at driving immediate response for charities (3 effects). TV is the best all-rounder for charities. 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.
Average Number of Response Effects Generated by Charity Campaigns, Including
What the results of this data demonstrate is 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.
*We should take a moment here to explain the terms used:
Response Effects: Effects that direct response and performance marketing campaigns are tasked with (e.g., conversions, acquisitions, sales, bookings, footfall, downloads, CPA efficiencies and response rates).
Brand Effects: Effects that specifically relate to brand measures, for instance the types of metrics that brand trackers are usually tasked with keeping tabs on (e.g., brand awareness, ad recall, consideration, purchase intent, brand trust, brand perceptions, recommendation, customer satisfaction and NPS)
Business Effects: Effects related to overall business performance. They are distinct from response effects in that they typically point toward the long-term sustainability of a business (e.g., profit, market share growth, customer penetration, loyalty and shareholder value).
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. These ultimately say little about campaign effectiveness, but as they have appeared in the results sections of the DMA award entries, they reveal a great deal about how marketers are currently measuring campaigns.
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