65. Some Personal News

Why Effectiveness should be a higher priority than Efficiency in Q4, and locating Gen Z

Sep 24, 2023

Happy Sunday. A very warm welcome to all the new subscribers. I’m thrilled to have you as readers and truly appreciate your feedback and support.

It feels like yesterday when I published Edition 48 of SPN, chatting about using Q3 as a testing ground for the year-end fundraising bump. To those of you whose Q3 flew by as quickly as mine – I hope you find a helpful gem or two in today’s edition.

Holiday’s aside, Q4 affords us an unmatched opportunity to fundraise - accounting for up to 75% of some Org’s annual revenue. Today, I’ve shared some approaches that I’ve used to maximize revenues in Q4, and some thoughts around TikTok, Amazon and planning in Themes.

As with every edition of SPN, please reach out with any questions or comments. I respond to every single one.

Let’s dig in!

Locating Gen Z

Building on the progress in social shopping we talked of last week, a smart reader of SPN and I chatted at the superb Donor Experience Summit last week on whether TikTok could kill Amazon.

Clearly killing Amazon is unlikely but hurting Amazon? If social shopping takes off and TikTok, Shein and Temu become the go to choice for a younger audience then that could hit Amazon hard.

The creator network TikTok has is a strategic advantage over Amazon for sure and there’s plenty of commentary about TikTok wanting to be Amazon for Gen Z.

Some precedent can be seen with search - TikTok has built a strong position amongst a younger audience who use TikTok search for news and nearby restaurants, as well as content. It looks like they’re trying to strengthen their search results too, with Wikipedia snippets. Keep your eyes peeled for them - they’re appearing for me as I scroll through in-app search results, sitting sandwiched between “relevant” videos.

Testing budget aside, a far more considerable chunk of my budget is allotted to Amazon’s DSP (Ads). It’s where I’m finding a segment of Gen Z- operating in and expecting a de facto mobile-first world - most willing to donate. (When was the last time you ran through your donor journey on mobile?)

Serving an ad to a Gen Z prospective donor related to an aspect of my Org’s mission (e.g. education, health, nutrition…) when they’re searching and purchasing tangentially related items for themselves, thematically at least, makes a ton of sense. It’s also paid dividends.

The broader story of Amazon Ads, of course, is the “retail media” gold rush. (I know… I reference retail media a lot. The segment is one huge opportunity for your advertising, which hopefully you’re exploring). Amazon hit $38bn in ad revenue for 2022. What’s even more impressive is it probably had well over 50% operating margins, which would mean it brought in as much operating profit as Amazon Web Services (AWS) - $20-25bn, and without anything like as much capex. Mind-boggling.

Anyway, TikTok and Amazon are wonderful examples of the realization that a high-traffic website or app can be ad inventory despite not being a media company. You have very relevant “consented” first party data (at the very least intent if not broader profiles) and probably purchase attribution too.

And of course all of this now has more relative value given the push against cookies and third party data everywhere else. Working in combination, TikTok and Amazon may be your best bet yet to tap the donor intent that’s very much alive among Gen Z.

I’m curious if you’re experimenting in TikTok and what success you’re seeing? And how you’re defining “success”.

P.S. Just this week Wavemaker published a fascinating research report on Gen X and their behavior on social. Link in the Reads Section below. Including this stunner: “28% of all TikTok users are Gen X’ers but only 5% of brands target viewers in that age group with influencer marketing.”

Keep it Simple, Stupid

I’m borrowing from a design principal to title this post and talk about a Quarterly approach to positioning and storytelling. I hope it still resonates. This may be the simplest approach to getting the most out of your marketing in 2024 that there is. 13 weeks to go ;)

It doesn’t guarantee you success. Plenty of nonprofit’s say they do it but get distracted or persuaded otherwise 9 weeks into a quarter. And plenty also think about Q4 in this way and then lob it out the window when planning Q1. But it WILL help you get the most out of almost anything you do next year.

Themes. What’s your theme for Q1 2024?

In any given quarter you probably have emails, ads, mid-level donor group zoom calls, brand campaigns, podcasts, events all happening. And in most cases they’ve been treated as One-Off Campaigns.

One-off campaigns can create buzz, but they’re often short-lived. Once the campaign ends, it’s back to brainstorming the next attention-grabber, often losing the momentum you just built.

Instead, I have a New Year’s Resolution suggestion for you to consider. Build a theme around Q1. And every Quarter going forward. Maybe it’s about maximizing the donor dollar, the journey of that dollar, or celebrating the recipients of your mission’s good work. Choose a theme that aligns with your Org or mission’s strengths and your audience’s understanding of what the pain points are that feel solvable.

From there the key is to deploy this thematic lens across multiple channels over an extended period. Video, written pieces, organic social media snippets then boosted with paid efforts when you see what’s working, and email campaigns. What else am I missing? Q1 planning sessions (happening anytime now) can then orientate around how the theme can be consistently communicated and integrated across platforms.

What you want to orchestrate is channels that play off each other and create engagement loops from one channel to the next. It also helps you with:

Seamless Storytelling. Instead of isolated campaigns, themes offer a cohesive narrative. This consistency makes it easier for donors to engage with what you’re up to and the outcomes you’re driving.
Reinforce Brand Positioning. Coming off the crowded space that is Q4, maybe extending your Holiday campaign into March helps reinforce your brand and its mission? That wouldn’t work for everyone but most people don’t remember a message they just see once either.
Optimized Resources. By focusing on a theme, you can produce content, tools, and resources more efficiently, and get more ROI for each marketing effort - each one can build off each other.

Before jumping headfirst into another fragmented year of campaigns, there’s value in taking a step back in your 2024 planning exercise. You could and should be telling a more compelling, longer-lasting story.

This isn’t about reinventing the wheel every single time. It’s about driving it in a direction that builds momentum, traction, and impact.

The Year-End Finish Line

Between now and EOY the time has come to lock in your MarTech stack as-is – even if it isn’t ideal. Don’t go tinkering. The data loss from implementing a new CRM or a half-day outage during a website migration isn’t worth the potential uptick in CVR – regardless of how tempting that is.

Go right-to-left on the Donor Lifecycle.

Throughout SPN, I’ve referenced the Donor Lifecycle probably at least 93 times – always talking about it as a left-to-right framework of developing Suspects into Prospects into One-time and Multiple-time donors.

October is the time to go backwards and ensure the right-hand side of that journey works as well as possible. In Q4, half of the donors in most Org’s are net-new to that specific Org – and the other half have been giving religiously over the last several years. Making it easy for the latter group to donate and “preventing” them from being acquisition targets of other nonprofits is the defense played right.

Send your emails early. I’ve seen tremendous success in not counting on the December email bonanza with red-colored CTAs going out multiple times a day. Start the sequence earlier in the quarter and focus on the donor experience. While December is the time to ask for contributions, October is for sharing the impact made by your Org, being thankful to long-term donors, and sharing next year's ambitions.
Maximize branded paid search impression share. It’s no secret that CPCs go up in Q4, especially in December. But the value of each click is hard to overestimate, and the risk of competitors bidding on your branded terms isn’t worth it. By the end of October, your first position impression share should be 95% - now is the right time to check those keyword lists and implement a broad match impression share bidding strategy in Google Ads. (It’s the new function they launched earlier in the year, subtly prioritized by Google in the rankings).
Let donors schedule their donation. While not the most common tactic, I found including in an email or a reactivation display campaign in October an option for the donor to schedule a donation for a particular day in December extremely well-performing. And if your donation platform doesn’t support it – send them a calendar invite as a CTA instead! This can remove an element of stress for donors and helps your Org stand out from the crowd from those constantly asking for a donation “right now” without an immediate emergency.

Cut 25% of your target Acquisition audiences based on CVR.

This is counter-intuitive to some – but in October, your Acquisition priority should be to cut budget drastically. Efficiency is hard to achieve in Q4 because of ever-rising media costs and competition. Effectiveness is the name of the game.

Your website or donation forms won’t change in the next three months, so an increase in CVR from those non-performing prospects is unlikely. Cutting the worst-performing 25% of your audiences across all channels will give you the resources to go big on fewer tactics that proved working.

Reactivate those inactive donors.

Most organizations I know “retire” inactive donors after a year, two years maximum, of no active donations or interest shown in communications sent to them. However, those who donated to your organization during an EOY period 2-3 years ago are still donating at this time – possibly to a different organization and without a strong affinity for any specific cause. Targeted email and programmatic (display or social) reactivation campaigns against this list, leveraging your current best creative, are guaranteed to reconvert many of them.

Over-communicate on the Acquisition side.

Cutting 25% of the targeted group as per the above will create some room in your budget – use half of that to increase the frequency of communications for your 25% of the highest CVR audiences and leverage your best-performing content from last year instead of reinventing the wheel.

Even the highest CVR you’re getting now is well below 100% - and with Effectiveness being the higher priority than Efficiency in Q4, getting that % up is the only target. Reusing the best content based on engagement a year ago is a quick option to meaningfully increase frequency – while maintaining the quality of donor experience.

Go big on the remaining budget. And How…

After executing the above, you should have about 10% of your planned budget unallocated – this is the growth part of the budget, dedicated to aggressive, quick investments with the highest chances of succeeding.

Go DOOH. How?
I’m a big fan of OOH/DOOH, covered in great detail in Edition 6, and I’m especially fond of it during Q4. Focused on the Top-1 City and Top-10 Zip codes of your donation performance from the last EOY season, OOH is almost guaranteed to generate a significant uptick in revenue.
Land that content partnership. How?
Looking at the domain-level performance from your display performance, identify 1-3 websites with the highest CVR overlapping between last year’s EOY season and the last three months while driving a considerable amount of donations (my threshold is at least 100), and take over their homepage top-of-page banner for December with a beautiful interactive ad. I’ve no doubt their website’s creative team will gladly assist any nonprofit with creative development.
Invest in CTV. How?
Similar to the first bullet, you can minimize the risk of a last-minute investment by selecting just one city – and, for the CTV use case, overlap it with your Top-25% CVR lookalike audience. There’s no time left to produce a new video creative, so selecting the best-performing asset from last year and making minor edits to ensure it’s relevant is your best bet.

The above recipes are not the most innovative or risky tactics. I’m not hitting on various tactics like AI-generated creative at scale, visual recognition product placements for your gift catalog, or partnering with one of the rapidly expanding retail media networks. But that’s because Q4 requires ambitious yet “safe” ideas. And I hope these “safe” ones give you the best shot at success.

That’s it for today. Let me know if you take any of these ideas and put them into market. Now onto the fun stuff!