SPN. 138: ROAS Doesn’t Define Success
Plus, your Brand is an intangible asset on the 990 and is the point of Facebook ads getting missed?
A very warm welcome to all the new subscribers.
You’ve joined a community of 2k+ marketing and fund raising operators at mission-driven Org’s. I’m thrilled to have you as readers and truly appreciate your feedback and support.
What’s the best and most efficient way I’ve doubled the performance of an ad campaign?
→ I halved donation cart abandonment.
With Fundraise Up’s Abandoned Donations feature you can capture every opportunity and turn intent into donation revenue.
Turn on the “Remind Me Later” screen in Checkout. It’ll capture supporter email addresses then automatically send an email sequence to remind them to complete their donation.
It’s like a whole new revenue stream, and free too because I’m not having to pay to retarget them!
Game-changer? It is for me.
In this week’s SPN →
It’s raining Brand-building RFPs.
ROAS doesn’t define success; scaleable acquisition does.
Is the point of Facebook ads getting missed?
Context matters: look at the whole picture instead of a single metric.
and, plenty of Jobs & Opps that took my fancy this week.
Let’s jump in!
More RFPs for Brand Building?
There’s a recalibration going on.
I’ve seen the most requests for proposals (RFPs) seeking partners for brand building within the last two months than at any other point since launching SPN in August 2021.
It’s been fun fielding some interesting questions from Org’s about brand affinity, brand strategy, brand identity and brand refreshes and redesigns, and where to seek support and inspiration.
This month the fund raising landscape shifted (again). Certainly for some Org’s the economic uncertainty in some markets isn’t as tense, which has allowed them to open the aperture and consider brand needs along with performance marketing. For others, a political climate is forcing their hand and they’re needing to double down on telling their story as to who they are and why they exist.
At the same time, the increasingly fragmented digital landscape (SPN #137) and sheer volume of competition for eyeballs makes it doubly challenging for fund raisers to win online with solely performance-oriented tactics. Another way to look at this is Org’s are finding it difficult to stand out and differentiate themselves.
So this pivot to thinking in terms of refresh, reinvent and create is exciting.
You may enjoy the excellent and just published recent WARC report “Building Brands as a Multiplier for Growth” that I dropped in my Reads from this Week section. Feels very relevant: “the biggest returns come when marketers see brand equity as an accelerant of (fundraising) performance.”
As always in SPN, we love a rich dose of brand + performance. Bring on that moment where the top of the funnel and the bottom of the funnel collapse into the middle!
What’s doubly exciting here is that Org’s are acting on their own realization that long-term thinking and building is critical, and are seeking partners for this.
Cheers to finding the soul of your brand 🥂
It’s never been more essential!
Jobs & Opps 🛠️
If you have any jobs that you’d like me to profile please reply to this email.
Girl Inc., NYC: Director, MarComms ($100,000 - $110,000)
Big Brothers Big Sisters: Senior Manager, Executive Comms & Engagement
American Cancer Society: Strategic Director, Marketing Operations ($117,000 - $140,000)
Amazon: Senior Manager, Community Engagement ($148,300 - $245,200)
LBJ Library: Manager, Member & Donor Relations
Easterseals: National Director, Major Gifts & Planned Giving
MSF UK: Acquisition and Emergency Fundraising Manager (£51,577)
Tony’s Chocolonely: Social Media Community Champion ($60,000 - $70,000)
Disney: Senior Manager, Enterprise Social Responsibility (ESR) Programs ($137,200 - $183,900)
ALSAC St Jude: Sr Advisor, Media and Public Relations
World Vision: Senior Head of Relationship Fundraising (UK) (£59,375 - £62,500)
Project HOPE: Chief Development & Communications Officer ($300,000 - $325,000)
Make-A-Wish: Lead Manager, Peer to Peer Fundraising ($66,772 - $75,000)
J&J: Senior Director, Social Impact Systems
UNICEF UK: Media & Communications Manager (Partnerships) (£42,000)
→ More jobs updated daily to SPN’s sister website: www.pledgr.com
ROAS Doesn’t Define Success
Return on ad spend (ROAS) is important; the higher your ROAS, the more funds you’re raising on your campaigns per donor. I get the appeal.
I’ve managed plenty of excellent agencies and off-boarded my fair share too. And those who are focused exclusively on touting ROAS are typically going all in on heavy retargeting campaigns, reaching warm audiences at relatively low costs and potentially taking credit for donations that would have occurred anyway.
On the flip side, as an internal team if all you’re doing is pushing ROAS demands onto an agency, what else can you expect?
Is the point of Facebook ads getting missed?
Retargeting campaigns are great and they have their place, but focusing too much energy on them will limit your campaigns and keeps you from properly scaling, high ROAS or not.
The true and intended strength of FB is all about reaching and acquiring new donors at scale.
I know this because I’ve now tested it with multiple Org’s, one of whom was very focused on a higher ROAS goal when we first started working together. They felt FB Ads weren’t profitable enough at a lower ROAS and didn’t want to invest in lower ROAS campaigns.
Having learnt this lesson the hard way and only prioritized campaigns that translated into a high ROAS before, it was pretty clear they were leaving donations on the table. Counterintuitive’ish but their high expectations around returns was limiting their ability to scale significantly and see greater donation revenue.
Seasonality is also a factor. Yes, track month-over-month results to understand how increasing/decreasing spend impacts performance, but don’t neglect the context and impact of seasonality and auction dynamics. $100K in August won’t yield the same results as $100k in November.
Anyway, the Org ran a split test to look at the impact of a larger budget in the same environment, prioritizing cost efficient scale over a high ROAS alone.
For one campaign, they kept their typical budget.
In the second, they increased their standard budget by over 60%.
Result: When they put more investment into the ad system, they saw 50% more donations. More impressively, it only cost them 10% more to acquire a donor and their ROAS only 6% lower.
Based on the numbers, they were driving considerably more donation revenue from more net-new donors when they were investing more, even if it came at a slightly lower ROAS per campaign.
The increase in fund raising costs were offset by the number or donors acquired - especially when you factor in the percentage conversion to monthly pledge giving, increasing LTV significantly.
So here’s the question:
Why does FB only drive nominal changes in performance as you scale against new audiences?
There’s two core reasons I can think of:
1. CPM’s increase nominally compared to an increase in spend if the audience is large enough.
2. Conversion rates don’t dramatically decrease if the qualified audience is large enough.
Do any others come to mind?
Ultimately, advertising spend only becomes a CPM factor when you look at it relative to audience penetration. In my experience, when you get close to about 60%-70% audience penetration, you start to see significant increases in CPM’s. This is what you need to watch for closely when scaling.
Might you see a decrease in conversion rates? Maybe but if your audience is large enough, this shouldn’t be an issue. When I’ve split tested this, CVR’s only decreased by ~1%.
Why?
Because CVR’s don’t dramatically decrease as long as you’re going after a broad enough audience where the cost to acquire your next donor might not be that much more expensive than the first because both people are just as likely to donate. (This is only going to be an issue if you’ve already tapped out of your addressable audience at your Org’s investment level). E.G., if you’re targeting 100K people who’ve visited your site and reach 90% of them, you’ve already converted all the low hanging fruit.
As long as your audience is large enough and qualified enough, you should have the ability to continue scaling against your target audience at a nominal cost.
How Org’s Can Leverage This to Scale
Knowledge is power here, so while campaigns with high ROAS are great, remember that they aren’t automatically the end-all be-all; especially if you have a little flex in your budgeting.
To be clear, I’m not saying you ask for more budget. Rather the way you set up the budget needs to allow for budget fluidity across channels or buckets. That fluidity is your avenue to scaleable revenue right there.
Here are some SPN tips to scale more effectively:
Be aggressive about creating and testing your campaigns early in the funnel. It’s all about reaching high-quality new donor audiences. These audiences typically won’t convert right away, but they’re crucial building blocks to bring people who will convert later into your funnel.
Allocate 70-80% of your budget to cold audiences, especially at this time of year. You need to be putting most of your budget into attracting new donors. Only 20-30% of your budget should focus on re-engaging warmer audiences. You can only scale your donation revenue with a larger donor base (plus, bringing in new donors can help combat natural attrition).
Put more of your budget into campaigns prioritizing your Org’s objectives. Are you wanting more conversions? Then prioritize conversion-based campaigns by investing more of your ad spend here, even if the CPC overall is a little higher than on other types of campaigns.
Wrapping Up
Plenty of LinkedIn “gurus” will tell you to find your campaign with the highest ROAS and put all of your eggs into that advertising basket. The highest ROAS, however, doesn’t always mean the highest return and LTV. Nor does it build a scaleable revenue engine.
Find the campaigns that are the most effective overall, which sometimes means finding those who can attract higher quality donors who in turn will contribute to higher average donation values and higher retention rates.
Context matters: as you build look at the whole picture instead of a single metric.
Weekly Reads
Perplexity AI Deploys Chinese DeepSeek AI Model (Search Engine Journal)
The Agentic Economy (Medium)
Amazon have built on their success with Performance + to develop Brand + - now out of beta and boasting of strong results from the testing.
TikTok Tells Advertisers They Are Not Breaking the Law By Running Ads (AdWeek)
Vidmob - analyzing and optimizing creative - their CEO is interviewed by Ari Paparo (Marketure Podcast)
Why – And What – Marketers Need To Know About AI Agents (AdExchanger)
Uber's Vision for the Future: EVs, AVs and On-Demand Logistics (WSJ)
Building Brands as a Multiplier for Growth - Report (WARC)
OK, that’s all for today.
I hope you’ve found one nugget today that you can put into play next week.
If you enjoyed this SPN, please consider sharing with your network. Thank you to those that do.
If a friend sent this to you, get the next edition of SPN by signing up below.
And huge thanks to this Quarter’s sponsor Fundraise Up for creating a new standard for online giving.