Three digital metrics nonprofits can value too much

by David Schwab, Digital Strategist

By now, as a metric-savvy marketer, you probably already know to discount vanity metrics like Facebook likes or web site visits.  But there are some digital metrics that can be valuable… but only to a point.

Return on ad spend (ROAS).  The calculus on this seems simple—higher return on ad spend is better.  But this view has the consequence of leaving money on the table.

Take hunger (please).  In my work with food banks and rescue missions, I’ll see return on ad spend of five to 11 times ad spend.

When ROAS is that high, it means that there’s likely missed opportunity.  Think of it this way: if you had a magic box that you could put one dollar in and get two out, you’d put money in the box.  That means you’d be willing to accept two times ad spend, but you likely aren’t tapping those audiences yet, as you try to keep your ROAS high.  Thus, you could be raising more money and adding net revenue but aren’t.

Take this one more step.  If the magic box took your dollar and gave you $.99 back plus a donor that you could resolicit for another gift, you’d take that deal too.  Just as for-profits invest to get customers, you absolutely should be willing to invest to get donors.

There’s another problem with optimizing toward ROAS.  There’s a whole marketing funnel out there from people first learning about your organization to those ready to make a gift.  If your ROAS is too high, you could be squeezing the bottom of your marketing funnel dry (good) while ignoring top-of-funnel awareness and engagement strategies that will make up your next cohort of donors (bad).

Donor age.  There is often a focus on getting younger donors.  This is understandable given that the actuarial tables tell us they will have a longer time over which to give AND buying power is rapidly shifting to younger generations.

The challenge is that 18-34-year-old donors can be a bit of a rollercoaster.  Their interests are not necessarily set; for example, there’s a noticeable shift from animal charities to educational charities when donors have children.  Additionally, their revenue streams are less predictable and thus their giving is less predictable.  They may have a bonus from work and choose to pay that bonus forward, but unlike a direct mail donor getting the same amount in Social Security each money, that’s not going to necessarily happen again.  You need to balance your investment so that you can keep the organization going while opening the door to donors of the future.

One upside to younger donors is that they are natives to the subscription economy and thus look to fuel the continuation of the monthly giving movement.

So this is not to say to ignore younger donors any more than it is a plea to go after them.  Rather, it’s a call to action to meet your donors where they are and address them by their interests and their identities, not their ages.

Transactions.  Yes, when and how much someone donated is very predictive of when and how much they are likely to give again.  But there’s so much more data that can factor in that the transactional marketer misses.

When you are set up to track behavior, interests, when someone reads your blog and who their favorite author is there and more, you can cater to that person’s interests on a granular level. 

To start, these can all be triggers for automated marketing campaigns.  But zooming out from that, they become ranking and value indicators.  All this gets thrown into the data stew and each part adds flavor, helping you better understand likelihood of giving and what communications are best for individuals to get.

All three of these metrics can be helpful but suffer without context.  What metrics have you seen that can be overblown or misleading without context? How do you make sure you get the “full picture” when you look at your data?

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