Study: Click-Throughs Decline 25%, But Online Revenue Improves
October 8, 2014 Mark Hrywna
Nonprofits sent 60 percent more email last year and open rates are stabilizing. Click-through rates are falling, but repeat and sustaining donors are boosting online revenue.
Those were among the results from 800 nonprofits found in the 2014 Luminate Online Benchmark Report unveiled this week during a session at Blackbaud’s 15th annual conference for nonprofits at the Gaylord Opryland Convention Center in Nashville, Tenn.
Lauren Firestone, senior fundraising and marketing consultant, and Rachel Simon, senior product marketing manager, presented the findings of the eighth annual report. The 800 charities raised $1.27 billion, had 18 million transactions and sent 7.6 billion email messages last year. Some of the largest charities in the country are represented but more than 80 percent of participating organizations raised less than $2 million per year online.
The study breaks down 20 cohorts, including 17 verticals based on NTEE Code and three others: national nonprofit mailers, with house files larger than 1 million; team event, consisting of organizations generating more than 80 percent of revenue from events; and, Canadian organizations. The report historically had been released in the spring, however, this year covers a fiscal year (July 2013- June 2014) versus a calendar year. The change allowed for its release at the annual conference but also at a time of year when organizations are preparing for next year and refining end-of-year campaigns.
Annual online revenue per usable email address was $12.46, down from $13.90 in the previous fiscal year, with a median change of -4.87 percent. Organizations could be collecting higher quality email addresses at a faster rate while online fundraising revenue grows at a comparatively slower pace. The same organization can see improvement in both house file size and online revenue yet still see a decline in revenue per usable address.
Overall median online fundraising revenue growth was 8.07 percent, with sustainer donations up 16.8 percent. First-time gifts were down a median 1.59 percent in revenue and 5.19 percent in gift count while repeat donations are up 19 percent and 14.79 percent, respectively. That may indicate that repeat donations have grown at a faster rate to a larger proportion of the total fundraising, according to the authors, while the number of returning donations may be a result of acquisition efforts that have happened in previous years. Any large acquisition year should naturally lead to a focus in retention of those donors in the following year.
Despite a decrease in fundraising email conversion rates, the number of gifts, total revenue and average gift amount are all up. The median number of constituents who donate was up 15 percent last year, compared to the previous year.
Donors are online, they are giving, and they are giving more, Firestone said. “This doesn’t mean email is dead,” she said, but indicates a continued trend of the multi-touch, multichannel donor experience. With mobile, the trend in email will be changing, she said, as people will not want to click that much on email. Mobile is changing everything, Firestone said, with less opportunity for a call to action in a mobile email. It reinforces the importance of having a multichannel, multi response fundraising strategy. “It can’t be just email anymore, like only direct mail a few years ago, so you need to have multiple ways for them to respond.”
Email message volume is up year-over-year, with a median number of emails sent of 144, an increase of about 60 percent over last year in the number of distinct messages and campaigns.
The median change in usable house file email addresses, year over year, was almost 13 percent. Usable house file growth counts emails that don’t have a hard bounce, which would be a significantly higher number.
There’s a direct relationship between house file growth and money raised, Firestone said, and a robust email file is critical to fundraising. There are no signs of slowing in attracting new supporters and people are giving their email addresses. “Constituents want to be communicated with via email,” she said. “Supporters who believe in your mission are the best ones.”
A robust email file is critical to organizational growth, she said, so make email acquisition a priority by nurturing and cultivating but be wary of list fatigue.
The ALS Association didn’t know what was going to happen with the Ice Bucket Challenge but they had to devise a plan to talk to those people, to nurture and cultivate those people to become longtime supporters, Firestone said.
Overall median open rates were up anywhere from 0.42 percent to 1.76 percent, hovering between 15 and 17.6 percent for any kind of email (appeal, eNews, advocacy, other). Open rates are holding steady, Firestone said, and constituents are engaged and still consuming information via email. She suggested sending differentiating and more engaging emails to supporters also could be factor. Maximize constituent engagement: Send differentiated messages and be responsive.
Click-through rates (CTR) and email conversion rates are declining. The median fundraising email conversion rate was 0.05 percent, down 25 percent from the previous year. Click-through rates on all four categories of emails ranged from 0.61 percent to 2.05 percent, with year-over-year declines running form -5.75 percent to -12 percent.
The most important metric, Simon stressed, is an organization’s own historical performance. The full 62-page report can be downloaded at www.blackbaud.com/luminatebenchmark