In the latest in a series of articles, designed to provide advice on data-driven marketing strategies, we look into the charity sector.
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REaD Group’s recent report with the DMA revealed that charity marketing campaign effectiveness has declined over recent years, despite the sector outperforming other industries.
How do you measure response?
The DMA’s Intelligent Marketing Databank is built on the back of data covering 1,057 DMA Awards entries, 138 of which are charity campaigns. For this report, the DMA applied a methodology that would record the number of reported campaign effects: a larger number of effects is equated with greater effectiveness.
Each individual effect was recorded and grouped into one of four categories:
Response Effects: Effects that direct response and performance marketing campaigns are tasked with, such as conversions, acquisitions, sales, bookings, footfall, downloads, CPA efficiencies and response rates
Brand Effects: Effects that specifically relate to brand measures, for instance, the types of metrics that brand trackers are usually tasked with keeping tabs on, such as brand awareness, ad recall, consideration, purchase intent, brand trust, brand perception, recommendations, customer satisfaction and NPS.
Business Effects: Effects related to overall business performance. They are distinct from response effects in that they typically point toward the long-term sustainability of a business, including profit, market share growth, customer penetration, loyalty and shareholder value.
Campaign Delivery Effects: These measures are essentially media planning campaign inputs (e.g., reach, frequency and impressions) and so-called ‘vanity metrics’ such as clicks, likes and shares. These ultimately say little about campaign effectiveness, but as they have appeared in the results sections of the DMA award entries, they reveal a great deal about how marketers are currently measuring campaigns.
How has charity campaign effectiveness evolved?
The report showed that, over the past five years, charity campaigns are above average performers, generating more effects than the average campaign (2.9 effects vs 2.7 effects). However, this overall picture of effectiveness masks the underlying tensions between generating brand and response effects with charity marketing communications.
While charities are the second most effective sector at generating direct response (behind retail), they come second bottom for generating brand effects. The combined effects of a well-balanced approach to response goals and brand building will therefore be key to longer-term marketing impact: deep-rooted perceptions about brands are not easy things to shift, but they can provide a vital effectiveness boost to marketing activity.
Despite the fact that charity campaigns largely outperform the all-sector average, where they are in line with the rest of the market is their declining impact over the past two years. While effectiveness dipped in the early pandemic phase (i.e., 2020), charities still outperformed the all-sector average.
In the late pandemic phase (i.e., 2021), the number of effects generated per charity campaign declined 28% to a point where they now underperform compared to the market average. Declining response effectiveness in a challenging market where household budgets are under more pressure than ever has inevitably played its part.
What can charities do to create more effective campaigns?
The effectiveness of a charity campaign can be impacted by fundamental campaign planning decisions such as which consumers to target (existing donors or new acquisitions), how to appeal to them (through direct response or brand building), and how long for. Each planning decision must be carefully considered in the context of overall campaign strategy.
The DMA’s Intelligent Marketing Databank provided a unique source of insight into different campaign strategies and revealed a number of interesting insights. The first was that the duration of charity campaigns – relatively short term at up to three months – has changed little throughout the pandemic. However, while charities are more effective than average at driving a short-term response, it is long-term campaigns that generate the most effects overall. With only 8% of charity campaigns running in the long term (i.e., for over a year), charities should consider redressing the balance.
Secondly, the proportion of charity campaigns with a dual response and brand objective has doubled during the pandemic. 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 (28%), a greater shift in thinking is required to address the decline in charity campaign impact.
Charity campaigns with some sort of acquisition-based target audience are much more effective than a sole retention-based target. Existing donors are not likely to continue making unlimited donations when they are already invested in a cause. Exploring new audiences and targeting the entire addressable market is a cornerstone of how brands grow.
Which media channels are the most effective?
One of the questions we are repeatedly asked by not-for-profit organisations, irrespective of their size and the nature of the project is: which channels are working best for charities right now? The answer to that question is that this depends on many factors. This research has helped to uncover which channels work for the campaigns that charities and agencies themselves think are the most successful.
Firstly, a multi-channel approach does matter. Two-thirds of charity campaigns run across multiple channels and those that utilise three or more channels are more effective at generating brand, response and business effects than those running with one or two. A well-integrated multi-channel campaign must be considered when looking to arrest the decline in charity campaign impact.
Advertising mail is the most effective channel at driving immediate response for charities. 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.
Whilst TV and digital display are also effective channels in driving immediate response, TV also drives an above-average response and above-average brand effects. If planners are to give more consideration to campaigns with dual brand and response objectives, then TV becomes a vital component of campaign planning.