Case Study On Advertising Budget Chart

Guest post by Amanda Sides
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In its simplest description, Facebook advertising is essentially placing ads within the Facebook interface with a goal of increasing visibility for your target audience.  While it’s still relatively new when compared to other ad platforms (like Google AdWords), it’s constantly growing in popularity, which in turn leads to even better targeting options and updated features.  So why exactly is this a great opportunity that shouldn’t be overlooked by nonprofits?

Why Facebook Advertising is Beneficial for Nonprofits

Minimal Costs. When comparing Facebook ad costs to other forms of online paid media, it tends to come at a very low cost-per-click (how much you pay every time someone clicks on your ad), contributing to low costs-per-conversion as well. As competition increases and more advertisers start utilizing Facebook as an ad platform, costs-per-click may start to increase, but for now it’s a relatively cheap way to get traffic and conversions.

Granular Targeting. Since users share so much information about what they like and who they are, this gives advertisers an advantage by allowing them to target very specific audiences. By having that ability, you can spend your marketing budget more efficiently and effectively. Here are just a few of the ways Facebook allows advertisers to target:

Retarget Site Visitors. Facebook offers a targeting feature where advertisers can show ads on Facebook to people who have visited their site before. You can even narrow this down to certain actions or page views, and tailor your ads specifically around that information. This enables you to show ads to people who you know are already interested in or supporters of your nonprofit, increasing the likelihood that your ad will gain some traction.

Testing & Measuring Performance

Before you get started, be sure to nail down your overall goals you want to achieve from this initiative. Do you want to send people to your Facebook page to promote more likes? Or do you want to direct people to your website to perform a certain conversion action? This will help guide your strategy, as you never want to lose sight of your ultimate end goals.

Once you’ve established your goals, be sure you set up conversion tracking so you have something measurable to let you know how you are doing.

When you first get started, be sure to write your ads with your audience in mind. Are you targeting moms of young kids or male college students? How about people who have certain interests, such as baking or running? You’ll want to tailor both your images and verbiage to that audience so it’s compelling to them and also conveys what action you want them to take on your website. You should always be testing your ads, to continually strive to improve conversion performance.

There are two places ads can display on Facebook, the right-hand column and directly in the newsfeed. Don’t neglect to monitor performance to see which works best for you; having this insight could help you hone your ad spend to get the most conversions at the lowest possible cost.

How Share Our Strength Increased Support using Facebook Advertising

Share Our Strength, a Washington, D.C. nonprofit fighting to end child hunger in America, wanted to increase registrations for its Bake Sale for No Kid Hungry , a national fundraising initiative that encourages people to host bake sales in their communities to help end childhood hunger. Those who were interested in holding a bake sale could register via the Bake Sale for No Kid Hungry website. Share Our Strength continually comes back to Facebook advertising to promote this campaign, since performance has proven to be successful season after season.

From the start (Fall 2012) through the most recent season, we’ve helped Share Our Strength and the Bake Sale for No Kid Hungry narrow targeting to focus ad spend on their heaviest hitting audiences, test ad copy, images and landing pages, as well as introduce new features and campaigns along the way, all contributing to significant improvements in conversion performance over time.

The results are the perfect example of why testing and tweaking to figure out what works best is so important.

  • Conversion rate increased by 134%
  • Cost-per-conversion was reduced by 64%
  • Cost-per-click decreased by 20%

Not only is Facebook advertising one of the most efficient channels for their ad budget, over time through testing, it consistently improves, allowing for more efficient spending of that limited marketing budget.

For more details, read the rest of Share Our Strength’s Facebook Advertising story at Marketing Mojo.

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About Amanda Sides

Amanda Sides is Account Director at Marketing Mojo, managing SEO, PPC, LinkedIn and Facebook campaigns for both nonprofit and for-profit organizations. She develops and manages tactics to improve performance and manages an account management team in Marketing Mojo’s Charleston, South Carolina office. Her clients have included MazdaUSA, SRI International, DS Cases, Share Our Strength and Taco Bell. Amanda graduated from James Madison University with a Bachelor of Business Administration degree with a concentration in Marketing.

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Question: What percentage of a nonprofit’s budget should be spent on marketing and communications?

–Sherri Greenbach, Executive Director
Jewish Women’s Foundation of New York

Dear Sherri,

What a great question! The answer is (as you probably expected) “it depends.”

You definitely need to have a comprehensive, realistic budget. It’s a critical component of your annual marketing and communications plan and, like the work plan, serves as a map to ensure you reach your goals. The budgeting process helps you to determine whether your plan is realistic. If not, cut the plan to focus on ultimate priorities and retool the budget.

In the for-profit world, it’s fairly standard to determine a marketing budget by allocating 10-20% of projected gross revenues to marketing and communications. However, things aren’t so black and white in the nonprofit world with our dual bottom line of people and dollars. You can take the percentage approach OR the flat dollar approach.

What’s most important is that you establish a detailed marketing and communications budget prior to the start of each fiscal year, and track costs (by strategy and program or project) and results AS YOU GO so that you can analyze cost vs. benefit. The budget should be integrated into your annual marketing and communications plan, with a dollar cost allotted to each strategy (direct mail, email, paid advertising, media relations, etc.) and program or project, each of which should be broken out by its various components (consulting, evaluation, printing, postage, etc.).

Each organization’s plan (and budget) will cover a unique set of components. Don’t forget to budget for the tasks – such as researching your audiences and evaluating outcomes – that give you the information to make your selected strategies as successful as possible.

The Percentage Approach

This approach is favored by those who believe that marketing and communications expenditures should directly reflect a nonprofit’s evolution and the size of its budget. Personally, this is the approach I prefer. The advantage of developing a budget based on your organizational finances is that it’s organic. Communications spending grows as does your organization. Of course exceptions are made for special needs such as the launch of a new program, introducing new leadership, or tackling an urgent advocacy campaign.

The average allocation is from 9-12% of your annual organizational budget (start with 10%). Advocacy organizations tend to allocate a higher percentage (12% or higher) of their organizational budgets to communications, since much of their advocacy work is communications based.

Here’s a highly-simplified example of a budget shaped by the percentage approach:

2%Purchasing all advertising and promotion media, including internet, newspaper, radio, TV, and direct mail (postage).
+
4%Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5%Producing special events.
+
3.5%Salaries, consultants and freelancers.
=
11%Total percentage of the organizational budget going to marketing and communications.

The Dollar Approach

Others in the field consider a flat dollar approach to be more relevant (and safer) than the percentage approach since your total budget has to cover utilities, rent, taxes, health insurance, etc.

Defining the dollar figure is challenging the first time round but becomes much easier once you have records of several years’ marketing expenditures to work from. Start out with a quick-and-dirty calculation based on last year’s costs and revise it to reflect special campaigns, inflation, etc. Or, if this is your first year out, estimate the costs of what you think you’ll be doing based on what you know today. Contact colleagues in the field and prospective vendors to get your projections as accurate as possible. Either way, you’ll end up with a baseline budget.

Frankly, I’ve heard a lot about this method as a viable alternative to the percentage approach, but have never seen it put into practice.

What Budgeting Does for You

Whichever approach you take, you’ll find that a formal budget is a great aid in decision making. To begin with, your marketing communications budget (and plan) will help you distinguish between needs and wants. You’ll see clearly how much you have to spend to reach your goals and, via tracking results, will gain a sense of what strategies work best to achieve which goals. For example, based on your budget framework, you may decide to promote your advocacy campaigns via direct mail and email, media relations, and paid advertising in order to match legislative timeframes. However, you may decide to hold off on enhancing your already strong membership campaign with the launch of a members-only web site.

So, Sherri, start your budget process today, even if you’re in the middle of your fiscal year. Make sure that you track costs by category and maintain a spreadsheet of actual vs. projected expenses. By next year, you’ll have an accurate map of expenditures that will serve as a great foundation for next year’s planning process and a sure means of ensuring you make the most of your marketing and communications budget.

Do keep in mind that your budget will have to be adjusted each year to reflect increasing costs and changes in your organization. For example, launching a new program requires an increased marketing budget for the first year or two so you’ll need more dollars or do less on other fronts.

Tagged as: case study, marketing budget, nonprofit budget, nonprofit communications, nonprofit marketing

Nancy Schwartz in Planning and Budgets | 6 comments

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