Is the Internet effective for Charity fundraising?

Can the Internet deliver donations to Charitable causes more effectively than conventional media routes such as direct mail and press advertisements?

Many fundraisers responsible for spending advertising budgets believe so.

Many experts have their doubts.

Andrew Papworth writes a regular newsletter called Harvest. His December issue has an article titled: Why you should not rely too much on the Internet.

“According to the Office for National Statistics, more than a third of women aged 65 to 74 and almost three-quarters of those over 75 have never used the Internet”.

And 

“Elderly women are often a key market for fundraisers and they are particularly likely to be missed by online communications”.

Drayton Bird says that Social networks can lose fundraisers a lot of money. He quotes using a statistic from the 'causes' application from Facebook:

“Over the last 12 months for which figures are available just $2.5 million has been solicited in the US by 19,445 charitable organisations. That’s an average of just $126 per organisation. They would have done infinitely better using Direct mail, but that isn’t fashionable”.

The problem is the sad fact that Internet advertising is peopled by practitioners who have made jargon an art form and who use it to make the practice very opaque. Transparency is absent for many campaigns.

The initial start point was search, a digital equivalent to Yellow pages where people looking for something specific are nudged into choosing a brand or service using adwords. This market is for people who are 'engaged'.

The digital version of mainstream offline advertising such as Press or TV are leader boards, banners, skyscrapers and MPU’s. When all this started they were priced in Cost per thousand impressions or Cpm’s in the American vernacular. And initially they were expensive, as high a £25 per thousand impressions. This was clearly unsustainable because it made the cost of buying online impressions more expensive than on established offline media. Digital publishers began to offer more flexibility in terms of geographic selection, behavioural and contextual targeting but prices had to fall. Advertisers were now more interested in the number of people who clicked on to their landing page or website. The average click through rate was 0.06% or 60 clicks per 100,000 impressions, so if you were foolish enough to buy impressions at £25 per thousand you would pay £42 per click. Horrendous.

The first to offer a low cost option were the blind networks or exchanges, who took over the unsold inventory of publishers and offered these for very little but at the expense of information about exactly where the ads appeared.

More recent is re-targeting where using cookies implanted in your computer, advertisers can provide messages to people who have previously shown an interest. Furthermore these messages can be transmitted across all the devices such as mobile phones, tablets, laptops and smart TV’s. This is known as householding.

Now the accent is on trading desks, real time buying using algorithms and programmatic platforms. Some of the more informed advertisers query the excessive jargon, are concerned about the lack of transparency and are considering having their own trading desk.

The jury is still out about whether these developments will make digital medium more effective.  

Gaining a better share of tourisms largesse

Tourism is leading the drive out of the recession. Its importance to the world’s economy is suggested by the work produced by the World Travel & tourism Council who estimated that in 2012, tourism generated 6.6 trillion dollars worldwide. This represents 9% of total GDP and a similar share of jobs. Tourism grew faster than the other economic powerhouses such as the financial, manufacturing or retail sectors.

Most of the gains are due to the belief that the bad days are over and because a resurgent airline business is making access easier by laying on more flights. Six months ago, a spokesman for IATA talked about European airlines being on a knife-edge. Now Lufthansa, Easy Jet and IAG, the owners of British Airways and Iberia have announced large profit gains for the most recent accounting periods. Tony Tyler, IATA’s Director general said:

“The strong growth of recent months, coupled with the continuing improvements in air travel demand in September, suggests that there could be a further acceleration in air travel growth before the end of the year”.

Not all of the smaller undifferentiated airlines will benefit from this trend.

People make their independent holiday destination shortlist first and easier access helps the decision process. For countries with limited advertising budgets, it helps if the national airline also promotes their country. A surprisingly high proportion do not. Sell the destination and then your differentiated, easy access service. Why else would you fly with Air Argentina if not to visit that country?  

It doesn’t have to be an airline though. Eurostar is giving people a reason to travel on its trains by promoting the hidden treasures of Paris in a charming typically gallic film commercial. See it here.

It makes you want to be impulsive and visit. And Eurostar is so convenient. 

Sometimes the favoured destination is served by a number of airlines. Price may be the major factor in the decision, but if this advantage is marginal, then flight convenience, departure airport, and perceived image matters. Skytrax rates airlines on the basis of product and service criteria. The top airline is Emirates because of the age of its fleet, quality of the website, airport service, cabin staff efficiency and friendliness and the on board product. The other podium places were taken by Qatar and Singapore Airlines.  

Airlines that don’t pay attention to all the service ideals risk being marginalised and prey for the major operators.

To see the Eurostar video in full: 
http://www.youtube.com/watch?v=NCyQo6rVrOI

Netflix and programming research

Netflix is soon to be launched onto the stock market. It will certainly be a success and part of its attraction is that it has ambitions in the TV and film production business. It understands that control of film software can be an asset to what is currently a distribution business. Rupert Murdoch adopted this philosophy earlier with huge financial gains.

Netflix already produces some original programmes, such as a TV series called ‘Orange is the new black’; a prison drama featuring nudity and sexual scenes. Recently its spokesman appeared on Channel 4 trumpeting their magic ingredient that would guarantee large audiences. This involves an algorithm and big data. Put simply the algorithm sifts through the audience preferences from their huge database to suggest the ideal ingredients for hit shows.

Forty years ago, two enterprising researchers at Masius Wynne Williams, then the second largest Ad Agency in the UK, successfully developed ‘TAPE’ which I think referred to Television Audience Preference Evaluation. It purported to predict audiences to TV channels based on their programming contents. Of course things were simpler then. In the UK we only had two channels, but the model was exported to the States where it was adopted by more TV channels and film Studios.

The problem with these models is that they can only use existing data and the key element that constitute programming success is originality. What algorithm would predict the success of ‘Steptoe and Son’ or ‘Dad’s Army’?

Raymond Snoddy, writing in MEdiaTel’s newsline, reports on the huge successes of ‘DR’, Denmark’s small public service broadcaster. They are responsible for hits that include The Killing, Borgen and the Bridge. The rest of this piece is based on Mr. Snoddy’s thoughtful report.

Morten Hessedahl is DR’s head of cultural affairs and responsible for the programmes mentioned. He says: 


“Never trust your research department and certainly do not let them inhibit your creativity. Numbers are good and reassuring, but they can only tell you about what worked in the past.

Stand behind the vision of the author at all times.

Don’t use external production houses”.

Mr. Hesserdahl is a talented, experienced and original thinker. I would trust his judgement over any algorithm invented by Netflix.

The importance of tourism to a nations economy

Travel weekly published a story, which claims that Greece expects to attract 17 million tourists this year. They will spend £9.3 billion and this gain of 9% has already positively contributed to the country’s still fragile economy.

The decline in GDP will be lower than anticipated. Tourism already accounts for one in five jobs and employment in this sector is growing.

The troubles in Egypt must have helped Greece. However their reduction of Vat from 23% TO 13% has made a difference to what is already an inexpensive destination.

All this has attracted the likes of opportunistic operators like Ryanair who have opened their first base in Crete. UK visitors in 2012 amounted to 1.8 million and this is expected to increase to over 2 million in 2013.

Soon the EU will approve another tranche of bail out money for Greece. They should make it conditional that part of it should be invested in tourism advertising.

The function of advertising for charities

Charity advertising has a number of functions.

The most common ones are:

1. To generate awareness of the charity, what cause does it act for, to make prospective donors appreciate why this need is urgent and tell them what is already being done to alleviate the condition. Awareness building also helps other more direct forms of fundraising.

2. To lobby influential bodies, politicians, corporate business leaders and financial institutions. 50% of the revenue raised by the top 500 charities come from non-voluntary sectors.

3. To raise money, ideally in the form of regular giving as well as from legacies.

As such Charity advertising is not classic direct response marketing and very rarely pays for itself directly. The return on advertising investment direct off the page or television screen averages 30% which is why fundraisers use a 'lifetime' donor value to make the investment seem more palatable. Some Charities simply justify their advertising and other fundraising expenditure by expressing this as a percentage of their total income generated from all sources.

Advertising does do more than raise money directly and helps improve responses from other areas of fundraising activity such as appeals to existing supporters, street collections, trading revenues and corporate sponsors.

Some advertising seeks to attract the attention of the people they seek to help. Combat Stress exists to help ex-service personnel suffering from post-traumatic stress disorder. War is hell but reliving its horrors every day is torture.

Well known charities can be brave and not ask for donations as the Royal Society for the Protection of Birds does in the attached great ad. It borrows the line from the movie 'Field of dreams': 
"If you build it, they will come".

The manoeuvering of free choice

Nudge, a book by Thaler and Sunstein was a hit when first published in 2008, despite some criticism from people who described it as dull. Its theme is that people can be nudged into making the right decision when attempts at persuasion, compulsion or other forms of pressure might fail.

David Cameron was converted to this notion and created a “NUDGE “ team of strategists charged with changing public behaviour without them noticing.

Their latest finding is that legacy income attracted by charities could double if people were reminded of making a charitable bequest when drawing up a will. Most charities actually do so anyway, and the reason legacy income has fallen may have more to do with concerns about future income, drop in savings rates, fear about the cost of long term care and the need to provide help to children and grandchildren onto their first steps up the housing ladder.

Nudge is not a new concept.  Edward De Bono called his theory: Lateral thinking. Indeed its origins go much further back. Kemal Ataturk, the founder of modern Turkey wanted his country to look westwards. He believed that the covering up of women’s faces by the traditional veil was wrong, so tried initially to ban its use. The clergy objected. Ataturk then decreed that all women of ill repute would be compelled by law to cover up their faces. Overnight respectable women abandoned the veil.

Back to charities. The ones that continue to attract donations and legacies are the ones that have a high level of spontaneous awareness, are known for the essential role they play and the public’s belief that this charity makes a difference. Cancer research and the British Heart foundation do well with legacy bequests because everyone knows someone who has died from one of these dread diseases. They also have a large base of supporters. According to the Target Group Index, Cancer research has 15 million supporters.

It follows that this generates a large mailing list, so they have plenty of opportunities to ask donors to remember them when it comes to making a will. Charities spend 65% of their advertising budget on direct mail.

But what can the smaller, less well-known charities do?

The answer is to get known, for the cause and your contribution to alleviating the situation. Advertising investment by charities in 2012 was nearly £ 400 million. Find some rich trustee to provide the money. Raid your reserves. Hold events. Ask advertising experts to help. Develop a clear objective that can be evaluated. If it is to raise money, ask yourself if this is compatible with building positive awareness and creating a larger donor base.

Two charities that attract legacies are The RNLI and the Guide Dogs for the Blind. Research I have seen suggests that potential donors are giving money for the brave life boat men rather than the hapless sailors in trouble and for the beautiful dogs rather than the blind person. It is important to understand what the emotional triggers are.

More than that, find someone to advise you. Someone who cares.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Getting it right for Charities

"When markets are in decline, the only way for a Company or Brand to maintain sales is to steal market share from its competitors."

This applies to Charities as well. They too have to operate on business principles even though their purpose is altruistic. And charities have been badly affected by our economic doldrums.

Some organisations have seen their income fall by 20%. This is true from both the individual private donor and Government sources.

The general public has concerns on the impact of the stagnant economy on their future finances. The elderly now feel the impact of inflation on the returns on their savings and on their pensions. Many now feel the need to help children and grand-children onto the housing ladder. Some may also be fearful about the rising cost of care. Many feel "compassion fatigue ".

When they do give, a re-prioritisation of causes takes place. The repertoire of charities that used to be supported are reduced. Most health charities will continue to feature in the list, with the possible exception of mental health causes and aid charities. Third world charities may move off the burner and service aid organisations could find their support dwindling as returning troops and fewer headlines reinforce the view that this is a job for the Government. 

And Government cuts will not just affect those charities who used to benefit from their largesse. These organisations will seek to make up their losses from private donors and their problems have already been listed.

Advertising investment is now even more important. In 2012, £371 million was spent in the UK promoting charities. Two-thirds of this sum was defensively spent on direct mail with the emphasis on appeals to existing supporters.

According to the Charities Aid Foundation, the causes  that continue to attract donors, other than disaster relief, do so because they have a good reputation, are believed to be likely to have an impact in this area and enjoy high levels of positive awareness.

The lessons are: Think clearly about your objectives and distinguish between business and communication objectives. Understand how best to integrate the need for building positive awareness and attracting regular donors. Invest in good creative work. Drayton Bird  quotes Sr Silva, the current President of Brazil: "The pocket is the most sensitive part of the human body, so we must touch the heart and the mind first."

Macmillan nurses manage their advertising investment better than any other charity. Other institutions could learn from them.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Travel trends in and from the UK in 2012

Last year was an atypical year in the United Kingdom. Concerns about the economy, the crisis in Europe and the violence that started with the jasmine revolution in Arab countries were put aside by the celebrations for the Queens diamond jubilee in June and the hosting of the Olympic games between July and September.

It should have heralded a boom in tourist visitors to Great Britain.

Visitors from abroad did rise, but only by 0.9% in 2012. And rather surprisingly actually fell in the third quarter when the games were held, by 4.2%. All the expectation of a huge influx of tourists was proved optimistic. The crowds in the streets and in the tube never materialised to the chagrin of hotel managers and greedy games ticket sales people.

Visits abroad by UK residents were  down by a marginal 0.5%, so tourist visits abroad at 56.5 million are still depressed from the heady days of 2008 when 69.0 million visits were recorded. A decline of 18% is very serious but relatively speaking, not as bad as visits to North America, which dived by nearly 27%.

Countries heavily dependent on tourism revenue are handicapped by their Governments austerity measures but still need to do something.

The Irish republic lost 28% of UK visitors since 2008. For 2013 its advertising campaign invites people of Irish descent to attend ‘the year of the gathering’. A tactic that could be adopted by India where 28 % of UK resident visitors already have Indian passports. Many million British passport holders are of Indian descent. Jamaica has a similar opportunity. 39% of visitors from the UK in 2012 were visiting friends and relations.

Some countries benefit from historical ties with Great Britain, and distance by encouraging visitors to stay longer in culturally familiar surroundings. Average length of stay in Australia and New Zealand is 36 nights.

And then there is advertising.

Tunisia, which showed an actual increase in visitors from 353,000 in 2008 to 388,000 in 2012 talks loudly with an increased advertising spend of  ‘There’s more to celebrate’.

Countries where tourists still feel unsafe include Egypt with a fall of 39% since 2008, appear dazed.

For concerned tourist boards, make sure tourist have easier access to your country, exploit your cultural and geographic assets, create stronger ties with tour operators and tell prospects why this year is the time to enjoy the unique advantages of your dream destination.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Coping with congestion at London’s airports.

Travel chaos is to be expected in a British winter and particularly so at airports.

Heathrow however managed a modest growth of 0.3% in passengers during January and estimate that would have been bettered to 1.7% had it not been for the disruption caused by snow. Still a total of 5.2 million travelers is good and on line to meet its target of 71 million for the year. Gatwick despite wheeling out their new snowploughs suffered a passenger drop of 0.8% in January but will easily reach a yearly total of 35 million. Stansted copes with half of Gatwick’s passenger, so together with the two other airports that serves London, Luton and London city, these airports serve about 132 million passengers a year.

The view is that there is a pressing need for more capacity.

Mayor Boris Johnson favours the building of a new modern airport on the Thames estuary at a cost of billions. The alternatives are to build a third runway at Heathrow, expand the facilities at Stansted and Luton and progress the expansion of Southend airport.   

But there are alternatives to building what might become huge and costly white elephants.  

The trend towards the use of larger aircraft will increase. Better airline promotion has filled more seats, but a 70% sold seat capacity suggests that they can do much better. See how well Emirates promote their services.  

Our Government appears to under rate the importance of tourism to our economy except as a taxation cow. The industry has created nearly two million jobs and contributes 4% of GDP. Britain is still very popular as a tourism destination.

We can all do much better.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Reviving the tourism market

There is evidence that the dramatic drop in tourism since 2008 has plateaued. We are still however bumping along at the bottom.

The long recession hasn’t helped of course, but people can get tired of feeling poor, particularly when they haven’t felt any real hardship themselves. Asset rich folks can be persuaded that the meagre returns on their savings justify spending on indulgences.

One element holding back the long haul tourism business is the much-hated Airline passenger duty.

Now the four leading airlines in the British Isles have published a report by Price Waterhouse, which calls for scrapping this ‘green’ tax. Using a model favoured by the World bank it examines the impact of one such element can impact on other sectors of the economy.

PWC claim that scrapping APD will stimulate the economy, create up to 60,000 extra jobs, encourage in-bound tourism and reduce business costs. Moreover the income lost will be made up by extra revenue from income tax and Vat. 

This APD tax has not been as lucrative as the Chancellor had hoped. The ‘Laffer’ effect works here as well. However George Osborne may take comfort in the fact that the fewer Brits who go abroad aids the tourism deficit. We earn less from in- bound tourism than we spend abroad.

And our new Visa rules make it more difficult to attract the new middle classes from China and India. We couldn’t even persuade more tourists to visit during the Olympics, though this may have been a marketing blunder.

We must create conditions to kick-start our tourism business. This means greater capacity at our airports and a better understanding of the benefits tourism deliver to the economy.

Would you defer this holiday?

People often make irrational decisions about spending money. They are however more careful when deciding on their major holiday.

This can be the most expensive purchase made in the year, so prospects decide on the type of holiday, draw up a list, and choose a destination that is highly desirable within their price range and distance. Provided it is accessible and safe.

The destination that offers unique qualities such as stunning landscapes and wildlife, will be preferred to countries that are ubiquitous. France or Italy rather than Greece if you are interested in fine dining and culture.

However there is a third dimension in this decision taking.

You’ve cut the orange, first on the basis of desirability and then again on uniqueness. The quarter you are left with includes destinations that meet your criteria.

The third factor is deferability.

Canada and New Zealand are wonderful countries for British tourists. However their political stability and friendliness of locals is not going to change in the short term. This makes it less of an urgent decision, unlike the possibility of a holiday in Cuba. Will it retain its old world faded charm after Castro, particularly if the USA decides to re-engage?

What can you do if you wish to generate an artificial sense of urgency?

Create events and festivals as Germany does. The Oktoberfest in Munich is just one of the many incentives to visit.