The nation’s nonprofits increased spending by 69 percent on digital advertising last year, with almost half of that was devoted to new donor acquisition as online and monthly revenue grew by double digits.
The 11th annual M+R Benchmarks Study released today analyzes 2016 data from 133 nonprofits about email messaging, email list size, fundraising, online advocacy, web traffic, digital ads, Facebook, Twitter, Instagram, and more. The report examined results from almost 3.6 billion email messages to nearly 50 million list subscribers, more than $535 million in online donations from more than 8.3 million online gifts, and 7.2 million advocacy actions.
“Everything about 2016 had larger audiences and more volume, so it’s only appropriate that this is our largest report yet,” said Madeline Stanionis, principal with M+R. “The study includes some surprising breakout hits that we believe are a signal of what’s to come for nonprofit fundraising, advocacy, and marketing,” she said in announcing the results.
Of the 133 participants in the study, 100 reported that they spent money on digital ads in 2016 and overall dollars spent was up 69 percent compared to 2015. The biggest change in digital advertising investment came among cultural organizations, jumping 152 percent, and 85 percent by wildlife/animal welfare organizations. Environmental organizations matched the overall 69 percent increase while international organizations saw a change of 53 percent.
Almost half of all digital advertising dollars were spent on new donor acquisition:
- New donor acquisition, 46 percent;
- Branding, 23 percent;
- Lead generation, 18 percent; and,
- Existing supporter conversion, 14 percent.
For every dollar they raised online, nonprofits spent 4 cents on digital ads but the report emphasizes that does not translate to return on investment (ROI). For example, a nonprofit that raised $1 million online — from all sources combined — devoted on average $40,000 to digital advertising last year.
Education nonprofits invested the largest amount as a percentage of online revenue – at 11 cents, far more than other types of organizations. Environmental, hunger and poverty, and international organizations, devoted the next largest proportion on digital advertising, at 7 cents. Public media matched the overall average of 4 cents. Investing smaller proportions than the overall average were cultural, health, and rights organizations, 2 cents.
The largest organizations also invested more heavily, at 10 cents, compared with 4 cents by medium organizations and 1 cent by small organizations. Almost half of digital ad dollars were devoted to display ads (46 percent), nearly one-third to search ads (31 percent), and less than one-quarter to social media ads (23 percent).
Among other highlights of the 2017 M+R Benchmarks Study were:
- The response rate for fundraising messages was 0.05 percent, down 8 percent from 2015, meaning that a nonprofit had to send 2,000 fundraising emails before getting a donation. Cultural nonprofits had the best email response rate of any sector, 0.09 percent;
- Overall online revenue grew by 14 percent last year, with monthly giving growing at 23 percent;
- For every 1,000 fundraising emails delivered, nonprofits raised $36;
- Traffic to nonprofit websites grew by about 4 percent compared to 2015;
- Nonprofit email lists grew by 10 percent, building on 16 percent growth the previous year;
- Email volume grew with nonprofits sending 10 percent more messages per subscriber last year than in 2015 and on average, subscribers could expect to get 69 separate email messages from a single nonprofit during 2016. Environmental organizations sent the most emails, 86 messages per subscriber. Health nonprofits had the lowest volume, 1.5 messages per subscriber per month, versus the average 5.0 per subscriber per month;
- Nonprofits’ audience on Facebook by grew 23 percent and by 50 percent on Twitter by while doubling on Instagram;
- The percentage of website visitors who completed a gift was up by about 8 percent. Environmental organizations had among the lowest conversion rates at 0.08 percent yet represented growth of 35.6 percent, one of the fastest growing subsectors;
- Email accounted for 26 percent of all online revenue last year but open rates declined by 7 percent, for an average of less than 15 percent; and,
- Response rates for advocacy messages declined by 17 percent, dropping to 1.6 percent.
On average, a nonprofit will reach 8 percent of its Facebook fans — about 1 in 12 — with a post that is not promoted. Only about 3 percent of posts by the study’s participants had paid reach. About 45 percent of Facebook users who saw a given post were not already fans of the nonprofit.
To analyze your nonprofit’s own results and compare them to industry norms, visit www.mrbenchmarks.com