Who Can Say No To A Puppy?

October 15, 2007       Marla Nobles      

The 13,000-acre Old Man on His Back Prairie Conservation and Heritage Area (OMB) is one of the last remaining expanses of native prairie grass left in the Canadian province of Saskatchewan. It is part of the country’s once vast prairie land, and just 30 percent of it remains.

The Nature Conservancy of Canada (NCC) selected OMB as the subject of a recent direct response television (DRTV) campaign. It’s a patriotic, love-of-country ad describing the plight of the land and the ranchers who are fighting to save it.

NCC also launched a DRTV ad about one of British Columbia’s most at-risk natives, the majestic Grizzly.

“What was surprising for us was which story worked best,” said Chris Carter, national director of direct marketing at the Toronto, Ontario-based nonprofit. According to Carter, viewers responded to the ranching story at a more than 20 percent stronger rate. “We anticipated that the story that was mostly about animals was going to have the strongest response. It didn’t have a bad response. But the story purely about people and being able to stay on their land, that was the one that by far had the strongest resonance.”

The rules of DRTV are changing. “It used to be that only nonprofits with little children, life/death and monthly pledges could make DRTV acquisition work,” said Tom Harrison, president and CEO of Russ Reid Company in Pasadena, Calif. “Today, we are seeing new subjects, new payment strategies, and new channels” working.

DRTV surpasses almost all other forms of fundraising in its immediacy of results — actions which can be evaluated within 24 to 48 hours of airing. “One of the most attractive reasons for leveraging DRTV as part of a nonprofit’s fundraising solution arsenal is its ability to provide the immediacy of results,” said Mark Blankenship, CEO of Baltimore, Md.-based direct marketing firm Barton Cotton Inc. “It gives you the ability to manage spots, adjusting markets and channels as seen most effective.”

According to NCC’s Carter, the charity’s success with DRTV is due to its unique message, one that Harrison speculates wouldn’t have “sold” in years past. “I think that’s actually been a benefit,” said Carter. “We have been able to make very emotionally compelling stories, involving people and involving wildlife. But the biggest difference is that what we do is actually tangible…we’re actually able to go down to a particular project and show the wildlife that we’re working on.”

Carter said the group’s DRTV program began with three goals:

  • Build NCC’s profile and awareness;
  • Establish NCC in the marketplace; and,
  • Secure new donors.

Since launching its DRTV program in 2005, the group has acquired nearly 4,000 new monthly donors, “which, in terms of Canada, that’s a good rate,” said Carter. But the biggest benefit, he added, has been the awareness that DRTV provides for NCC.

“We…are finding that lots of new potential partners, for example, corporate sponsors, the first thing they’ve ever seen by us has been our television show, and then they phone us up,” he said. “So, not only are we getting the direct monthly giving, but…it seems to be encouraging people to partner with us in…higher-end” ways.

NCC also created the microsite fightingforcanada.ca, specifically focused around securing monthly giving and branded along with the DRTV ads. “Last time I looked, it was about 20 percent of our donors came on through the Web,” said Carter. NCC uses unique URLs to track which television station is driving people to the site, just as it uses unique toll-free telephone numbers to track where calls should be attributed.

Carter said NCC is just starting to see the financial benefits of DRTV. With an annual budget of $500,000 to $1 million — including about $400,000 for creating the 60-minute shows, hundreds of dollars to $20,000 per media buy, and a few thousand dollars each month for the call center — NCC has now brought in revenue of several million dollars through DRTV. “The break even is anything from a year to 24 months,” said Carter. “We’ve crossed the point where our revenues are now exceeding how much we spent on DRTV.”

Long-form DRTV advertisements — typically 30- or 60-minute spots — have multiple benefits that can outweigh the high cost of entry. According to experts, using long form can significantly increase a charity’s value. Long form is also effective for branding — you can tell the complete story — and provides an immediate and measurable response. There’s smoother call arrival for the call center with long form — as opposed to the bombardment of calls that can occur with short-form ads — and it can be a good acquisition source in terms of volume.

When weighing long form versus short form (typically two minutes or less), experts recommend first considering the organization and its story. While lesser-known charities like NCC typically should stick with long form, shorter DRTV advertisements can work for well-known charities.

Larry Marks, media director for Eagle-Com Inc.’s U.S. clients, said he’s seen a trending toward more short form or spot ads with the Toronto-based company’s client base.  “We can place short-form spot ads in specific programming on specific networks, like TLC (The Learning Channel) or an Animal Planet, CNN.  It’s more targeted,” said Marks.  He added that despite the overall higher cost of short form – “You’re buying prime time, on the weekends, in the middle of CSI, which is the highest rated program in the country, so the media cost can be astronomical.” – the results are there.

According to Marks, production costs can range from $100,000 up to half a million dollars, depending on the type of ad. Media budgets are the kicker, he said, which can range from $70,000 to a high of $500,000.

Therefore, also look to content providers when deciding on ad length. Consider tapping into vertical markets, networks that are very specific or niche, (e.g. The Food Network, The Travel Channel, etc.) – but don’t forget your donors. Does your product or service lend itself to a particular filter or outlet? Is there a niche audience that would hold you as a hobby or special interest?

“What we’ve found is that the short form produces a much more efficient fundraising ratio,” said Steve Froehlich, director of development analytics at the American Society for the Prevention of Cruelty to Animals (ASPCA). Traditionally measured as a cost-per-lead ratio, the New York City charity’s DRTV program breaks even at seven months, besting the industry average of 12 to 24 months. Moreover, it exceeds a 3:1 return by the end of the second year. The group’s direct mail program takes one year to break even, he said.

The ASPCA began its DRTV program in 2004, focusing more on short form by early 2006. “We haven’t had much success with less than 90 seconds,” said Froehlich, who explained that the charity uses 90-second and two-minute ads. “To some degree, you still need at least 90 seconds to make the case, not so much that your charity is worth supporting, but that monthly donations are the best way to help. That’s the harder sell.”

The ASPCA has made the “harder sell” look pretty easy. The group’s direct marketing revenue has almost doubled from 2004 to 2007, from just more than $20 million to $40 million. Froehlich attributes a lot of that growth to DRTV. “Our number of automatic monthly donors on file has tripled from the beginning of 2005 until today,” he said. “We now have over 70,000 automatic monthly donors.”

Moreover, nearly 40 percent of the group’s DRTV donors give through the Web site, as opposed to telephoning in, something Froehlich is excited about. “Web donors tend to be better donors than phone donors…and free. There’s no processing cost,” except for credit card fees, he said. The charity is also toying with a text message-to-donate option, displaying onscreen a text message code along with the typical toll-free number and URL. The group also posts the ads on social networking site YouTube. The response thus far: “It’s small, growing, but free.”

Froehlich said the ASPCA offers callers a one-time gift option along with a monthly option. However, “given the high cost of entry for this kind of fundraising, and the size of the initial investment, it (DRTV) can be the most efficient fundraising channel only with a higher level donor coming in,” he said.

The group expects to spend $5 million on its DRTV program during 2007, up from less than $1 million spent in 2004. Froehlich said he expects that number to grow by 50 percent in 2008, “because we’re having that much success with it.” The charity uses Russ Reid to handle the creation and production of its television spots, and employs a call center to handle the influx of calls typical with any successful short-form ad.

Charities should not underestimate how complicated response handling for a DRTV advertisement can be. Some experts estimate that 90 percent of calls in response to an ad occur within three minutes of being aired.

“That’s where all sorts of variables come into play,” Froehlich said of response handling. “Depending on what station you’re airing, not every call is a donor, and you may spend between four and six minutes on the phone with someone.” The ASPCA call center averages 80,000 minutes each month, at a cost of between 90 cents and $1.20 per 2 words per minute.

Norfolk, Va.-based Operation Smile has been focusing more on the back end of DRTV, particularly on how calls are handled. “I think a lot of people underestimate that,” said Kyla Shawyer, senior vice president of response marketing and development. “A major part of that is training the call center that’s going to be managing your inbound calls, and working with them and scripting them properly and making sure that there’s an upgrade script as well.”

When Operation Smile began its DRTV campaign during early 2004, said Shawyer, the objective was to acquire as many donors as possible. “And then as you start finessing those objectives, you want to start acquiring more qualified donors because you realize during cultivation that you’re spending money on people that perhaps are just kind of one-off TV donors and they’ll never talk to you again.”

Supplemental to donor management, Shawyer said Operation Smile uses DRTV as part of an integrated strategy, not standalone. “You still need to integrate it with your other marketing methodologies. For example, following up with direct mail and with emails and the various other platforms that are available to us,” she said.

Working together as part of a multi-channel approach, DRTV creates a synergy and lift, said Barton Cotton’s Blankenship, without cannibalizing any other media. “DRTV provides a distinct channel of communications and distribution that augments any current marketing program already in place,” he said. According to Russ Reid’s Harrison, in the end being dependent on one vehicle is risky. “Wise nonprofits are learning the importance of diversifying their acquisition strategies,” he said. “You can’t put all your eggs in one basket just like you can’t put your retirement portfolio all in one stock.”  NPT