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advertising

The New Realities of Advertising Costs (Hint: You Are Getting Less Than You Think)

Budget expenses

Many nonprofit organizations misunderstand the increasing costs of advertising – and it’s costing them dearly.

It’s that season when organizations are preparing their budgets for the upcoming year. For many of us in the communications space, tis the season of spreading tough-love  in the hope that nonprofit organizations don’t hamstring themselves with a flawed “save one’s way to prosperity” approach to budgeting for marketing expenses – especially social media and advertising. Increasingly, advertising is not an optional expenditure – it is a basic cost of doing business for any organization that relies on the time, engagement, or concern of audiences (…which happens to be most organizations).

When it comes to budgeting for a necessary advertising investment, a tremendous challenge confronting many nonprofit organizations is a reliance on precedent behaviors to inform our future planning efforts. The advent of digital technologies amplified by an increasingly platform agnosticism market have rendered many of the traditional “rules” of advertising obsolete. The communications world – and, in turn, the advertising world – is in a period of significant revolution and reinvention. A dogmatic beholdenness to the past is likely to leave an organization forever behind.

Here are two important points that your organization should keep in mind when it comes to the basic cost of advertising:

 

1) The cost of advertising has increased dramatically in recent years and many organizations are not keeping pace with inflation

Though you may be spending more, you are probably getting less return on your advertising investment than you were a few short years ago. The few percentage points that organizations add to their advertising budgets each year is simply insufficient when contemplated in the context of the escalating costs of advertising.

For instance, in my experience, even forward-thinking organizations keep their annual ad budgets relatively stable (“Hey, this is how we’ve always done it!”) and will sometimes add 5-10% if there’s a special program or campaign taking place that they’re trying to promote. The thing is, while organizations think that they are spending more (because they are actually spending more), they are increasingly getting less.

Take a look at the chart below. The chart indicates examples of observed advertising costs during the last five years.  For relativity purposes, the escalating cost factors have been standardized and charted as index values.

 IMPACTS cost of advertising

“Blended CPM” indicates the growth in costs “blended” across all media types (i.e. broadcast, radio, print, digital, outdoor, etc.) as observed by the actual media plans of twelve IMPACTS clients.  CPM is an acronym representing the Cost per One Thousand impressions.  Thus, the average observed costs to advertise have increased by 41% in the five-year duration ranging from years 2010-2014.

As additional examples of advertising costs, within the same five-year duration, the chart indicates that the costs of a 0:30 second advertisement during the Super Bowl and Grammy Awards broadcasts have respectively increased by 60% and 105%.

We are living in an increasingly personalized world that emphasizes speed and convenience. We can simply TiVo, Apple TV or On-Demand our way out of most ads on our favorite television shows because we watch these shows at our convenience. Because of this, programs that folks watch live (e.g. sports, news, award shows, etc.) command premiums when compared to the costs of similar programming a relatively few short years ago.

In the simplest terms: Yes, on average, your organization will need to have increased its advertising budget by at least 40% in order to match your advertising efforts of five years ago. If you’ve added less than 40% to your budget, then your organization may actually be achieving less advertising impact than you were in 2010.

In the end, it’s a lesson in business and economics: You cannot just throw a bit more money at something year over year and get mad when you don’t get correspondingly “more” in return. If you’re not increasing the budget at the rate of what things cost, then you’re actually getting less. This lesson seems particularly challenging for nonprofit boards to understand when they are confronted with a proposed increase in the advertising budget. “So, if we spend more money on advertising, how much more support will we get?” is a perfectly reasonable question posed by many a board member. However, the question from board members probably ought to be, “If we don’t sustain significant investments in our audience acquisition strategies, how many visitors will we lose…and what will be the costs of trying to re-acquire them in the future?”

 

2) The first thing that organizations often cut is marketing (despite the increasing importance of funding in this area)

Compounding matters is the fact that – despite an abundance of the well-publicized reasons why it is a terrible idea – many organizations trying to balance budgets still seem to cut the marketing budget first.

This may be particularly relevant for visitor-serving organizations (museums, theaters, symphonies, gardens, aquariums, zoos, etc.) as these types of organizations are having a rough time meeting attendance goals. The anxiety associated with this causes organizations to deny data and do a lot of dumb things (and maybe some more dumb things) that will hurt them even more in the long run, and cutting marketing budgets in the Information Age is another one of them.

It’s a tough pill to swallow for traditionalists and specialists within organizations, but marketing is increasingly important for the survival of your organization. For many of the most successful organizations, marketing is at the center of strategic conversations. It’s a big change for many entities! And, organizations aren’t solely deciding that this should be the case…the market is deciding for them. As I say in nearly every post: Organizations can sometimes determine importance, but the market determines relevance.

Mix one part “not keeping up with the cost of advertising” with one part “cutting your marketing budget” and watch your audience awareness dwindle to record lows. For those persons in the nonprofit sector who may continue to balk at the idea that they need to spend more to acquire, engage, and communicate with their audience than they did five years ago, I ask you: What makes advertising exempt from the most basic laws of inflation? Again, these cost increases are the most basic costs of doing business.

 

For marketers, it is a tough road ahead: The “This is how we’ve always done things” and “Last year plus five percent” approach to budgeting and media planning that permeates many organizations is an increasingly doomed strategy. In a way, this post isn’t exclusively about marketing or advertising. It’s about a new way to think about the constantly evolving world that we live in. The world waits for no one. We need to keep pace or risk being left behind.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by colleendilen in Branding, Community Engagement, Management, Marketing, Museums, Nonprofit Marketing, Nonprofits, Technology, Words of Wisdom Leave a comment

The Viral Oreo: A Social Media Lesson for Nonprofit Organizations

Let’s be honest: Some people watch the Super Bowl for the game, others for the commercials, and others still – though this may be a new phenomena – for the social media buzz. (Enter: Me…glued to the Super Fish Bowl and refreshing the #MuseumSuperBowl, only looking up to watch commercials and all the while totally unaware of my beautiful real-life surroundings.) In the aftermath of Super Bowl XLVII, one particular happening (aside from the Ravens win) keeps coming up as a reliable conversation starter in my circles – the timely image that Oreo posted during the blackout that received over 15,000 retweets and 20,000 likes on Facebook:

Oreo

Buzzfeed quickly posted about how Oreo was able to get this ad up in a timely manner, but why this image has received so much attention is arguably more important. Moreover, there seem to be two, broad misunderstandings regarding the success of the tweet: that it was all about timing, and that this is an exemplary, stand-alone social media win. There’s a bit more to it…

Here is why Oreo scored a touchdown with this image and what nonprofits and businesses can learn from this marketing/PR play:

(…both puns intended).

1) It was a carpet bombing

We were carpet bombed, folks. Oreo grabbed us through multiple media outlets with a string of advertisements and the timely image sealed the deal, crossing marketing outlets in a way that seems to have blown our minds. We had all just seen the $4 million Oreo Super Bowl commercial on our television screens. This ad alone crossed the realm from television (generally low overall weighted value as a marketing channel) to social media (generally high overall value) because it enticed audiences with a brand participation opportunity on Instagram (“chose a side”). Oreo gained tens of thousands of new Instagram followers from its Super Bowl commercial alone.

This is a key factor in the consequent virality of the Tweet Heard ‘Round the World.  Oreo had already prepped the market for consequent communications and engagement. They were top of mind to all of us and primed for a win. Oreo knew this, as they were extremely prepared to create a timely ad at some point during the Super Bowl. The virality associated with the Oreo image isn’t just about social media. This is about marketing strategy and understanding the benefits of respective marketing channels and how they can work together to achieve a goal.

The Take-Away: Consider how social media plays into your own goals and overall marketing strategy so that it may be used most efficiently. Social media efforts are generally stronger with support from efforts on other marketing/PR channels and should not operate independently.

 

2) It was an ad on the one day when we are excited about ads

Audiences generally do what they can to avoid excessive advertising in day-to-day life. However, the Super Bowl may arguably be the single day of the year when we actually look forward to commercials. The fact that our tolerance may have been higher for advertisements on Sunday may have contributed to the Oreo image’s virality. It was clever. It played the game. It gave us exactly what we expected from one of the businesses promoting themselves during the Super Bowl – a smart advertisement. And, critically, it retained the genre classification…it just changed the marketing channel. Would this kind of ad have gone as viral on any other day (provided it was just as timely)? Maybe…but probably not.

The Take-Away: Be aware of what your audience is doing and thinking, and what they expect from you. Not all social media general best practices apply all the time (“Beware of posting blatant marketing messages”). In fact, success may come in finding the appropriate exceptions.

 

3) It was an all-in-one image

According to Pew Research, we increasingly suffer from A.O.A.D.D (Always-On-Attention Deficit Disorder). This may contribute to the trends we are observing of a movement toward a more visual web.  Images are quick and easy. They generally don’t require any additional clicks or even very much time to digest. Most importantly, however, images are easy to share.  The sandwich cookie’s PR and marketing team were smart not to divorce the image from the message as this allowed for easy amplification. In other words, they made sharing fool-proof for us.

The Take-Away: Make it easy for online audiences to promulgate and amplify your message.

 

4) It had perceived effort

It’s one thing to take what is in our digital back-pocket and repurpose it for a timely initiative. This has been wildly successful in garnering online attention before (even when it’s only passive). It’s another thing to think of a quick message and create a professional, branded image in the midst of a “hot moment” on social media. Perhaps that’s what is most impressive: not only did Oreo post something timely – they posted something new and clever. Like the most memorable lines of an improv comedy show, it was quick and it was created for the occasion.

The Take-Away: You want folks’ attention? Show them that you are working for it. Just because you are operating on social media doesn’t mean that it is necessarily low-cost or low-energy to do it right. Sometimes it takes good old hard work and preparedness.

 

5) It was relevant and posted quickly

This is undeniable. It was an image posted at the right time, and it was relevant to audiences (i.e. we all saw the blackout and we all experienced the stalling of the game). While being quick and timely may have be the most discussed takeaway of the initiative, “timeliness” was hardly the sole factor in the ad’s virality. In fact, organizations like the Getty and the National Museum of American History tweeted timely social media gemstones regarding the blackout whole minutes before the Oreo tweet was posted. While they certainly garnered attention, they did not achieve the level of recognition that the Oreo blackout ad realized. What arguably impressed us most is that all of the elements mentioned above were incorporated in a witty ad that came out quickly.

The Take-Away: Find a way to make your brand relevant when it counts. Aim to promulgate messages at times when they may hit a shared understanding with audiences. Timing matters.

 

No doubt, the Oreo ad was a big success with regard to online engagement and amplification. This kind of virality is helpful in making brands top-of-mind and (hopefully) sparking affinity for a product or business. While the story and virality of this ad offers significant lessons for nonprofit organizations on social media, the true outcomes of Oreo’s collective Super Bowl efforts will not be truly realized until we know if the ads were successful in strengthening the company’s bottom line and increasing sales.

At the end of the day, social media success pays off in elevating reputation and aiding in achieving organizational goals. If a “like” does not inspire a desired behavior, then – really – it’s just a “like.”

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter!

Posted on by colleendilen in Community Engagement, Marketing, Museums, Nonprofit Marketing, Nonprofits, Public Management, Social Media, Technology, Words of Wisdom Leave a comment

The Contrasting Mindsets of Nonprofit and For-Profit Marketers

There’s generally a big difference between the skill sets of for-profit and nonprofit marketers. Quite simply, for-profit marketers aim to encourage people to buy. Nonprofit marketers encourage people to give– and those two things are pretty darn different, and these tasks often require contrasting skills and mindsets.

For-profit marketing is much more tried-and-true than nonprofit marketing and for some obvious reasons. Below are the circumstantial truths for-profit markets often rely upon in order to ensure success (or at least the likelihood of it).

 

In for-profit marketing, more often than not:

1. There is a set price for goods and services as determined by the market. For-profit companies set prices of goods and services relative to the supply and demand for a good. In other words, companies set prices at an equilibrium point where they can get the most amount of money for a good without losing business because the price is too high. Nonprofit donations, while they often tend to be tied to the health of the overall economy, do not have this set price (or a set “ask”). We can say, “It costs $125 to buy a costly college textbook for an aged-out foster youth,” but nonprofit marketers and fundraisers actually hope that individual donors give more money than that. In short, there is no fixed price to end individual transactions– making the transaction a tad more difficult to market in a traditional sense. Therefore, nonprofit marketing is often limited, as they cannot say “give us $100 dollars, and we will give you tangible good X.” … which leads us to point #2 below. By contrast, the amount of money pursued by nonprofit marketers depends upon knowledge of individual donors/donor base rather than market value of a good.

 

2. The actual goods are tangible and/or measurable: “I will give you product X for amount Y.” Often a private company is directly promoting a specific product or service (“buy this shampoo”), while a nonprofit organization aims to promote awareness of a social cause and through that, the organization’s individual programs (“alleviate homelessness by giving to our organization”). Because nonprofit outcomes are not always measurable, it creates a problem with the “X in exchange for Y” mentality that for-profit marketers bank upon when attracting customers. For instance, what’s the set price for curing cancer? Making a donation to a nonprofit organization means making a contribution to solving a bigger problem. It’s not a measurable, quick-fix exchange with customer satisfaction guaranteed. In fact, sometimes the donor doesn’t even directly benefit from the service provided by the organization– and even more contrary to for-profit marketer-mentality– that’s often the point. I would argue, however, that both sectors have the same aim when generally promoting their brand- but the promotion of the actual goods/services is different because what is being “sold” often cannot be quantified.  Nonprofit marketers must promote programs (often with unmeasurable social outcomes) through awareness of social causes.

 

3. Goods are purchased by a consumer, and for the consumer’s use. For-profit marketers can rely on the sexy concept of direct ownership which is a thing with extreme value in a capitalistic society. Take a look at traditional messages behind for-profit marketing campaigns: If you drink Gatorade, you could become an Olympic athlete. If you buy a BMW, you’ll be suave and sophisticated. Buy Proactiv, and you’ll have flawless skin like Jessica Simpson. Not even Wal-Mart’s roll-back prices platform translates directly to nonprofit organizations that aren’t selling consumer goods. Nonprofit marketing is different. Nonprofits are often tasked with marketing programs that benefit people who are not the donor. Of course, many nonprofits offer great perks and publicity for big donors, but that doesn’t often directly compensate for small-scale donations. Even folks donating to their own community centers face a free-rider problem that for-profit marketers don’t need to deal with in their message. Namely, even if you donate to an organization you participate in, the benefit you receive is still diluted among other community center users (the money doesn’t come directly back to you– see point #2). The key to nonprofit marketing? Telling stories, tugging heart-strings, making people care about something. Nonprofit marketers must appeal to donors by promoting goods/services that benefit people other than the donor alone.

 

4. One-way transactions are frequent- and they work. This section offers what I believe is the biggest fundamental difference between nonprofit and for-profit marketing: though it’s often the aim, for-profit marketers do not need to build personal relationships– often because it’s for-profit companies that sell things we need to buy like food and shelter. In fact, consumers would no doubt find it annoying to be very personally courted by their television, toilet paper, and fabric softener companies by name (how creepy). No doubt companies would invest more in building personal relationships if they could (and indeed, many do), but it would/does take a tremendous amount of resources on the part of the company. Thus, companies must prioritize– and, due to sector differences, for-profits and nonprofits prioritize these relationships differently. Most companies don’t need personal, two-way relationships in order for people to buy their products, and they can rely almost exclusively on building a trusted brand to make products and the company feel personal. In other words, for-profit marketers focus on one-way transactions; they state a price, and consumers buy the product at that price with minimal actual company interaction. Nonprofit marketers must also build a trusted brand, but conversation and relationship building are key to securing donors.  This difference lies at the very core of nonprofit verses for-profit marketing mentalities. To state it dramatically: a for-profit marketer will come off more like a used-car salesman if she or she  does not fully understand the way that relationship-building in nonprofits  function. Nonprofit marketers must facilitate two-way interaction between the organization and potential donors.

 

5. User experience with the good/service fuels repeat customers. Because consumers purchase a good or service from a for-profit company for their own use, the buyer is in a position to recall their experience with the brand and decide if they want to purchase the item/service again. In nonprofit organizations, donors are similarly more likely to give again if their first experience was a positive one. Considering that for-profit goods are usually measurable, for the user’s own purpose, and delivered for a set fee, a private company customer is in a position to buy again based on their perception of the good and how it meets their individual needs. Nonprofits must rely on the customer’s positive relationship with the organization (because the donor doesn’t always receive a tangible good that they can judge). What does this mean for the difference in nonprofit and for-profit marketing mentalities? For-profit marketers focus on the good. Nonprofit marketers focus on the cause and the relationship. Nonprofit marketers must think ahead of a one-time transactions, speak to bigger issues, and  put quality and care into two-way communications. In nonprofit organizations, experience with the organization fuels repeat donors.

 

Despite these differences, many similarities obviously still stand. Marketers in both sectors are promoters and benefit from being savvy in traditional marketing skills and methods (partnership, buying ads, tracking web stats, advertising, guerilla marketing, etc). While both nonprofit and for-profit marketers are promoters with the goal of enticing buyers/donors to award funds to an organization or company, the bottom line of what is being promoted is different, and thus the mentality and specific aims of these marketers must be different.

Many nonprofit marketers must be skilled in balancing both nonprofit and for-profit angles of marketing. Museum marketers and those working in other nonprofits earning commercial income from revenue-producing activity must be knowledgeable in both marketing skill sets. They are promoting both a social cause, as well as an excludable, rival good (like tickets to a nonprofit theater performance or museum entrance). Having a nonprofit marketing mentality certainly does not necessitate a lack-of for-profit marketing savvy and vice-versa. However, hiring managers should note– for the sake of their organizations– that the mentalities fueling both sectors are different in regard to marketing. If a marketing position requires knowledge of both types of marketing, then hire someone who can summon the proper skills set at the proper times. Resourceful marketing, after all, requires a strategic plan-of-attack. How wasteful it may be for a (previously successful) marketer with a for-profit background to step into a nonprofit organization and spend funds simply buying up excessive Facebook ads (one-way methods) when they should be on social media or connecting with potential donors in a more personal way (two-way methods).

Here’s a (maybe crazy) idea: as for-profit companies continue to evolve toward nonprofit-like practices and relationship-building increases in value to private companies, it just may be the nonprofiteers who are sought after for high-power for-profit positions across sectors.

Photo credits to issnaf.org (base image) and Hugh Macleod

Posted on by colleendilen in Branding, Community Engagement, Marketing, Museums, Nonprofits, Public Management, Words of Wisdom 1 Comment