No, it’s not just you.  Fundraising is harder than it once was in several important areas.  Today’s topic: online ads are getting more expensive.

Back in August, we talked about how Facebook was getting more and more expensive:

“Eventually, novelty wears off.  Tactics are forbidden.  Con men are banned.  And the fast give way to the effective.  We seem to be at that inflection point with Facebook.  In 2012, Facebook had fewer than one million advertisers; today they have over six million.  Those advertisers are facing an environment where Facebook has focused on organic content (not for brands, but for people), so there is less inventory.  And what happens when more demand meets less inventory?  Prices go up.  For the first quarter 2018, CPM and CPC (cost per thousand ad impressions and cost per click, respectively) were up 91% and 92%.

Now, let’s look at the audience.  North American daily active users are flat; European DAUs are down.  So you can’t count on new people expanding the audience.  And clickthrough rates (CTR) are flat.  So advertisers are getting less for their money with no relief in sight.”

That was general info: for-profit and non-profit alike.  Now we have nonprofit specific info from M+R’s look at end-of-year: The Good, the Bad, and the Meh.  They found that direct return on ad spend was down 25% from last year, due to rising costs:

“Cost per 1000 impressions was up across channels, and groups were spending 25% more for 2% fewer eyeballs (ouch!).”

Ouch indeed.  Online advertising was once a bargain.  Now it’s just another channel and should be guaranteed neither your budget’s first dollar nor its last.

Here’s the good news: neither should any other channel.  They are just channels.  The things that matter are how your donors want to hear from you, where your donors are, and what media are conducive to your message.

Here’s the other good news: we know how to deal with this.  Every media matures to a point that marginal cost equals marginal revenue, at least according to my old econ textbook. This doesn’t mean that ad spending won’t or shouldn’t grow. And it will still continue to grow according to eMarketer:

Rather, it’s about how to get more out of the costs you have.  As costs increase, it’s important to go deeper, not wider.  While our “Give to get more of the donors you want” discussion below failed to get that coveted daytime Emmy nomination we were shooting for, it contains a lode of tips and case studies on how you can (still) bring in constituents cost-effectively and turn them into donors by focusing on their reasons for supporting and giving:

We’ve also bolstered this with a case study (with a 42% increase in click-through rate and lowered costs) and some general tips for those dipping their toes in the water.

Long story short, the more you include about what you know about your donors in your advertising, the more clicks, and conversions, you can get for the same price.

Nick