LTV, Positive ROI and Exploring a New Channel (part 1)

#9

Oct 02, 2022

Happy Sunday. The first weekend in October necessitates a lasagne. While mine’s in the oven, let’s dig in to this week’s edition of Some Personal News!

As we race into the final quarter of the year it may be worth sharing with our teams or exec sponsors, or flat out reminding ourselves, that videos won't produce a positive ROI.

Nor will blog posts.

In fact, SEO won't produce a positive ROI.

LinkedIn ads won't produce a positive ROI.

Remote events won't produce a positive ROI.

A podcast won't produce a positive ROI.

An email newsletter won't produce a positive ROI.

That is...

Not on their own.

These things above are NOT items on a menu. When you pick and choose tactics and then move on to the next thing when you don't see a positive ROI after three months, you're not gonna get anywhere.

Digital Fundraising is a holistic effort.

These things work together. Each has its own purpose. Collectively, they become a machine. But it doesn't happen overnight. And in most cases, they won't do it on their own.

Last week a non-profit (and now a subscriber to SPN (welcome!)) asked how to go about acquiring "monthly" donors from the get-go. Given how crucial regular giving and LTV is to our industry I thought I’d write down some thoughts. I also tackle what marketing channels, at least outside of Facebook and Instagram, non-profits could be exploring to acquire new donors.

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News to Peruse

Instagram Stories that are under 60 seconds will no longer be broken into 15-second clips. Meta also released a new three-part series on Facebook content discovery.
Amazon is rolling out email marketing to US brands and sellers in early 2023, which will let advertisers target repeat, high-spend, and recent customers. Amazon DSP should not be over-looked this Q4.

Uncle Zuc announced a number of platform updates, including a new Advantage custom audience, which will deliver ads beyond custom audiences to “improve performance”.
Google is integrating ad extensions and assets with campaign setup to further streamline your ad management workflow.
What makes a successful TikTok ad campaign? TikTok’s global head of marketing science shared his perspective covering topics like frequency and customization.

How to Acquire "Monthly" Donors from the Get-Go

I think of donor types in terms of the following “ladder of ascension”:

Emergency, irregular, “random” donors – those donating at no predictable pattern
Micro-moments, irregular donors – those sharing some of our goals but they’re hard to predict
Micro-moments, regular donors – those aligned with the mission but not yet ready to make an ongoing commitment yet
Micro-moments, monthly donors – those committed to support regularly and make additional donations from time to time (end of year, emergencies)
Legacy donors

Demographic groups can move through these levels sequentially:

Table

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The above is simplified but gives you an idea of what I mean.

So, a straightforward answer to how to obtain monthly donors is to focus your advertising on current donors and move them level by level “up” in their support.

This is a necessary but not sufficient play if the goal is to build a powerhouse fundraising program and who doesn’t want that?

To do more and acquire monthly donors from the get-go, these are my 3 considerations:

Who do I target? ~ Donor Obsession
How do I bid? ~ Value-Based Bidding
What do I tell them? ~ Seamless Conversion

Donor Obsession is about targeting the right people from the beginning. In earlier editions of SPN, I’ve shared how to use Google Analytics for segmenting your donors based on intent – now is the time to take that one step further.

Most of us are not limited by the size of our addressable audience. Fortunately for non-profits, our addressable audiences are usually close to the entire population of the country within which we reside.

So, instead of focusing your segmentation efforts on just about “any” donor more likely to donate to a given cause, you need to focus your analysis – and marketing spend - only on those willing to donate “monthly” for your “exact” cause.

Similar to the for-profit space - focus on your best customers, not just any customers - to grow faster than the competition. From first-hand experience of pulling the levers myself coupled with the non-profits I work with today, the situation is usually similar:

20% of donors drive 50%+ of total revenue.
And of that 20%, most are your monthly donors.

Here is the “master segmentation table” example I shared in SPN Edition 1:

Adding one more column to the criteria can already change the distribution of segments:

Value-based bidding is using technology to help us be more donor-obsessed. Google Ads has a lot of bidding settings available – below is how I think about progressing through them:

Timeline

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Use Google’s algorithms only in addition to your audience segmentation. You want to retain knowledge and insight. Relying squarely on automated algorithms is risky – it takes away the control and the understanding of what’s working/not working.

When used correctly, though – with your campaigns set up per audience and reporting in place to analyze performance – automated bidding can help find insights you’d miss otherwise.

For example, it was eye-opening to see many of our “Millennial campaigns” targeting the 25-34 age group perform really well under ROAS and LTV models, while not doing well in other settings.

After digging deeper, we discovered that the share of monthly donors is much higher among Millennial donors than in other age groups. My hypothesis is that these donors have been conditioned/don’t know any different to “subscription economy” behavior. They’re used to low-amount, regular commitments. I’m very interested in whether you see a similar trend. Let me know. (And if you’re unsure how to figure this out, email me and I’ll show you how).

Finally, Seamless Conversion ensures that the messaging – both in your Creative and on the Landing Page/Donation Form – makes it easy for prospective donors to select a monthly option. Below are some successful tactics I deployed. Most worked even better in concert with each other:

Comparisons – target people currently at Starbucks with creative that explains the value of a $5 monthly donation over a picture of a coffee cup
Defaulting donation forms to the monthly tab, while calling out the Monthly element and lowering the average donations to $5-$15 options
Adding a pop-up at the end of the donation form for one-time donors to convert to monthly right away
Following up via email within 5 minutes of the one-time donation offering to convert to monthly
Retarget donors who just gave with “thank you” messaging in Display, a vision statement of what can be solved with their commitment, and a CTA to make it monthly.

Exploring a New Channel (Part 1)

The most important thing to consider is how the ads live in the context of the content. All the platforms that I’ll share in this mini-series are technically "publishers" - they distribute or create content, and your ads live within this content. Some platforms like Instagram or Outbrain very naturally generate clicks that lead to site experiences. Others like TikTok or display ads might not — horses for courses!

Note to self: don’t judge everything like it's the Facebook Ads Manager.

Not every platform has the same design and data team as Facebook
You just can't rely on publisher numbers for your most accurate data

TikTok today reminds me of where Instagram was a few years ago with advertising but with slightly more advanced features earlier on.

If you're not investing in organic TikTok content with a creator then you should start there.

It's important as an advertiser to know how a platform works, from how to swipe around, to how badly no one wants to visit a complicated web page, to how to play into trends or the comments section.

The easiest way to start with TikTok ads is find what does well organically, and then amplify it.

If you seed an idea to creators and the TikTok does well, ask them for the ability to whitelist their post (more info here). TikTok makes it 10x easier than Instagram to whitelist and begin running ads.

If you're wondering how to easily find creators, use the TikTok Creator Marketplace. It's free. You just apply to join and approvals are quick.

Similar to Snapchat, don't expect last-click conversions to be driven by TikTok. It should be additive to the funnel to drive someone outside the platform to get back to your site. Start testing with a retargeting pool, understand what traction and engagement look like, then hit more prospecting-type audiences.

Interesting Reads & Listens This Week:

We’re seeing the rebirth of big ideas: 5 Creative Behaviors Shaping The Future of Campaigns | Facebook IQ | Meta for Business
A secret weapon in a tight labor market? Investing in career development
Combining data and creativity in equal measure: How to Build a Personalisation Strategy Embedded in Creativity | LBBOnline
What Is a Chief Metaverse Officer and Do You Need One? - Bloomberg
So much potential with AI and Creative, with new tools constantly emerging. This Twitter thread is a good collection of resources and this is a helpful background on the sector and the main players.
Listen: How Can You Improve Your Mental Endurance? - Freakonomics

BONUS re AI & Creativity: the most well known service Dall-e is now available without the waitlist. Sign up - check the box “for personal use” - go to the Playground section - and play!