It’s that time of year again! M+R, in partnership with the Nonprofit Technology Network (NTEN), has released its annual benchmark report on nonprofit digital activities. It’s chockablock with interesting information about how nonprofits are using various digital tools and how it’s working out for them. M+R has a great interactive site to explore the report’s details, which I highly recommend.
Rather than just summarize their report, I’m taking a close look at one issue the report revealed: The growing use of digital advertising by nonprofits.
According to the benchmark report, digital advertising spending by the nonprofits studied grew by 69% over the last year. Not all nonprofit sectors grew their digital spends at the same rate. The biggest investor in digital ads according to M+R’s report was the cultural sector, which increased its digital ad spend by a whopping 159%. At the bottom end, but still a nice boost, were international nonprofits averaging a 53% increase in digital ad spend.
The report also notes a discrepancy in digital ad spend growth by size of the organization. The largest nonprofits increased their spending by more than half as much as the smaller organizations. I can only speculate, but I can see how smaller organizations with less budget and perhaps less access to digital ad buying expertise may be less willing to allocate budget to digital ads. Yet they do have options to gain that experience and minimize their risk (more on that below), which may be well worth taking. Especially when you look at the positive impact digital ads have for the nonprofits using them.
Digital ad contribution to nonprofit’s bottom line
Alright, the fine folks at M+R really really want to make sure that we don’t misunderstand how we characterize the value of digital ads for nonprofits. Fair enough. Per the M+R team’s explanation of their findings: for every dollar nonprofits raised online, they spent 4 cents on digital ads. This isn’t the direct ROI for their ad spend. Attribution remains a challenge. Should that donation that came in through an organization’s main donation landing page be attributed 100% to that page? Or did that new donor first come across the organization through a digital ad or perhaps some social media content? Maybe a friend forwarded an organization’s email? Tracking online touchpoints to attribute a donation is getting more sophisticated, but remains imprecise and perhaps out of budget for smaller organizations.
In any case, M+R’s data point is an indication of how nonprofits are allocating their budgets. At a high-level, this benchmark provides an idea of how much a nonprofit may want to devote to digital ad spends relative to their fundraising goals. In their example, a nonprofit that raised $1 million online spent $40,000 on digital ads. Does that mean if you spend $40,000 on digital ads you’ll raise a $1 million? No. Especially since we don’t know how big a percentage that $40,000 is in that nonprofit’s overall digital marketing budget. Go to the full article.