OPINION30 June 2022

Volunteering for success: Charities and marketing

Charities Opinion Trends UK

What does effective charity marketing look like? Ian Gibbs of Data Stories Consulting and the Data & Marketing Association (DMA) examines best practice.

Jar of money

The last few years have been difficult for every marketing department with increased regulation, Brexit, the ongoing impact of Covid-19 and the current cost-of-living crisis. That has been especially true for the charity sector where the challenges presented by the General Data Protection Regulation (GDPR) were felt a long time before other sectors after a series of high-profile investigations.

Most charities have met the challenges head on and have produced some of their best work under the most difficult circumstances. Even though the latest DMA research investigating charity marketing campaign effectiveness reveals a decline over recent years, they are still above-average performers when compared with other sectors, including the public sector.

In many ways, charities are an advertising sector like no other. While other organisations grapple with the appropriateness of purpose-driven marketing, charities have no choice but to consider their purpose. They are tasked with creating deep-rooted emotional connections with consumers while asking them to part with their hard-earned cash, for little reward other than a good sense of altruism.

Yet, at the same time, charity marketing acts just like any other advertising 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.

What factors make this unique charity marketing successful? How can they improve their marketing campaign effectiveness in the coming months?

Main drivers of charity marketing success
The DMA’s Intelligent Marketing Databank (IMDB) provides an invaluable source of insight that shines a further light on the evolving effectiveness of charity marketing. With more than 1,000 DMA Awards campaign entries covered, 138 of which are charity campaigns, the recently launched report between the DMA and ReAD Group shows a number of notable trends and drivers of marketing success in the sector:

While charitable organisations might appear intrinsically noncommercial in their not-for-profit nature, there is nothing noncommercial in their approach to marketing effectiveness. In fact, the average charity campaign generates 2.9 effects per campaign, making the sector more proficient at generating marketing-based outcomes than the cross-sector average ( 2.7 effects).

This above-average effectiveness position is fundamentally driven by charities’ ability to drive short-term response effects: the types of effects that performance marketing campaigns are tasked with and that this sector typically relates to donations and sign-ups – all achieved at the lowest Cost Per Acquisition.

Two-thirds of charity campaigns run across multiple marketing 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). Ad mail is the most effective channel at driving immediate response for charities ( 3 effects). TV is the best all-rounder for charities. While TV and digital display are also effective channels in driving immediate response, TV also drives an above-average response and above-average brand effects.

Three key tips to improve effectiveness
However, 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. The spring lockdown of 2020 caused many traditional revenue streams for charities to dry up entirely. On-street and in-store donations were wiped out, charity shops closed their doors and fundraising events, from the London Marathon to smaller localised events, were cancelled or postponed.

The resulting challenges galvanised charities into action and through a series of highly effective campaigns that maximised the potential of traditional direct response channels, and the nation actually proved to be more responsive to charity advertising. A year later, however, and response has tailed off. The marginal returns of retaining the same targeting strategies year-on-year have diminished – at the same time that consumer household budgets are under more pressure from the rising cost of living.

To help, the DMA and ReAD Group’s research uncovered three tips for improving campaign effectiveness. Firstly, The majority of charity campaigns are short term (up to three months) in duration, and this has changed little throughout the pandemic. While charities are more effective than average at driving a short-term response, it is long-term campaigns that generate the most effects overall. Over the past decade, the marketing industry has been typified by a march to short-termism. Focusing on achieving quarterly targets as efficiently as possible with decreasing amounts of attention paid to long-term business outcomes and ensuring the long-term success of an organisation has become all too commonplace.

The challenges and pressures that charities face, however, often necessitate a primarily short-term approach to marketing success. Specific charitable appeals that respond to changing world events demand an immediacy of response that many other advertising sectors do not face. However, outside of these immediate short-term demands, only 8% of charity campaigns run into the long term (i.e. for over a year). Charities should consider redressing the balance if they are to arrest this recent decline in effectiveness.

 Secondly, in line with the appeal-based immediacy often required from charity marketing, the majority of charity campaigns ( 56%) have a pure direct response objective, 20% have a brand objective, and a quarter have a dual brand versus response objective. Perhaps surprisingly, given the overall marketing industry’s move to short-termism throughout the pandemic, the proportion of charity campaigns focused on pure direct response has declined between pre- and post-pandemic (from 64% to 42%) and the proportion focused on a combination of direct response and brand building has doubled from 14% to 28%.

Campaigns with a dual objective are more effective than those with a singular response or brand objective, but with dual-objective campaigns still in the minority, a greater shift in thinking is required to boost charity campaign impact to pre-pandemic levels.

 Finally, 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.

It is vital for charities to come out of the pandemic with renewed purpose and vision, especially where their marketing strategies are concerned. Charity chief marketing officers need to be armed with the data-driven insight to inform the role of marketing in building charity brands, 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. Redressing the balance between short-term and long-term campaigns, as well as the targeting of brand and response effects, will certainly be a step in the right direction.

 Ian Gibbs is founder of Data Stories Consulting and adviser at the Data & Marketing Association.