Decoding the 2024 M&R Digital Benchmarks

It’s been a full year since I posted my last roundup of the M&R digital benchmarks, and with this year’s report hot off the press, I’m back again to crunch through the data and distill the big outtakes so you don’t have to! 

But first — a shoutout to the awesome team at Rally who partner with M&R to get these to us every year, so we can shape data-driven digital marketing campaigns year-round. For those of you who don’t know, the M&R benchmarks are an awesome repository of insight for digital fundraisers — across nonprofits of various sizes and impact areas. I, personally, use them on a weekly basis — and if you don’t, I’d encourage you to! They’re an invaluable tool for any digital strategy.

This year, a whopping 225 nonprofits participated in the study, sharing their data and insights so the rest of the charity sector can benefit and learn how they’re faring. Here’s my roundup of the big outtakes from the US report. If last year’s cadence is anything to go by, the UK report won’t be far behind and I’ll be sure to share my thoughts on that, too.

Donors are flocking back to regular giving — at an astounding rate — while one-time revenue’s on a downward trend (but still going strong in December!)

While the 5% decrease in one-time giving wasn’t a pleasant sight, it’s reassuring to see the cost of living crisis is easing up on many, who now feel able to reactivate monthly donations. Regular giving increased, again this year, by 6% — and now accounts for 31% of all online revenue, up from 27% in 2022. 

Giving Tuesday 2023 and December remained the strongest time in the year to drive direct cash, accounting for 34% of one-time revenue (Dec). But a word to the wise: don’t stop your campaigns on Boxing Day! There’s huge promise in continuing the fundraising push through year-end, with December 31 accounting for 5% of 2023 revenue. 

Next year, I hope we get to see a little more around post-Xmas giving — in particular, I’d love to see how nonprofits lean into monthly giving at the start of the year, when donors are looking to the year-ahead and more in the long-term mindset.

Organizations are pouring more funds into upper-funnel activities, but probably need to shape holistic measurement frameworks to truly define the impact of this.

This year, we saw an increase in awareness spend: overall, it increased to 25% of the total advertising budget share, up by almost 10% on last year. This is a huge pivot from post-Covid digital fundraising, heralding a more stable nonprofit landscape and a shift in using digital channels not just to milk donors but to deepen audience engagement.

This is something that’s been coming for some time, with the phasing out of cookies from Q3 this year moving more and more nonprofits toward more holistic measurement frameworks and channel strategies. But as I read this shift, I wondered — how many nonprofits are truly measuring the impact of their activities? 

At a recent conference, I spoke with a director from Meta about how they’re measuring awareness activity with their 28-day post-view window, which is hugely limiting for measuring the impact of any brand-level activity. The answer? There isn’t a simple solution, in Meta’s ad platform or beyond (unless you have deep pockets for something like Campaign Manager). It’s all about ‘incremental measurement’ — and mapping out change over time.

As I read this year’s report, it made me hope the organisations who are increasing their spend on awareness so drastically have the frameworks in place to measure the impact of this spend on their wider digital fundraising programme. 

Most likely, this shift toward awareness is heavily driven by diversifying channels and testing connected TV and other digital video advertising solutions. And in a huge plot twist, some of this upper-funnel activity is actually driving direct income.

One standout takeaway was that connected TV spend has seen the largest spend increase across digital channels (up 50% on 2022), that digital video has also jumped by 33%, and display by 14%. This is no surprise, as CTV is the talk of the town right now — and I have, personally, witnessed an increase in returns across YouTube video advertising over the past 12-months at rates I haven’t ever seen before.

Likely, Pmax is a large part of this shift — with many nonprofits investing more heavily in the AI-driven bidding approach, which cross-serves display, video and search, to drive through-the-funnel intent and conversion. I would express a cautionary warning, here, as the general word on the street is that Pmax isn’t quite as effective as more manual approaches just yet. This is something I’ve seen directly; for an international nonprofit I recently had the pleasure of working with, Pmax returns were around 20% lower than manually-controlled channel bidding strategies. 

What did surprise me was the returns some nonprofits are claiming to be generating from these upper-funnel activities, with display coming in at a 1.26 return and digital video at 0.44 (which is very close to Meta’s 0.48). I can only assume many of the nonprofits in question are using more holistic measurement frameworks when quantifying income from their display activity, as this is a far cry from historic performance rates and doesn’t ring true from a last-click or data-driven perspective.

Search is the predictable winner for ROAS, and Meta’s still a strong player for social return on investment

Search spend increased by 11%, and PPC ROI remained the strongest revenue-driving channel with an ROAS of 2.7 and the average cost per donation coming in at $55. This will come as no surprise to most digital fundraisers, for whom their SEM campaigns are the bread and butter for most of their income generation. 

Next year, I hope the M&R report will go one level deeper — showcasing the level of spend that went on branded over non-branded terms, as Google’s Natural Language Processing capabilities continue to increase in sophistication. Certainly, for the nonprofits I’ve worked with this year, I’ve seen broader keyword bidding approaches are working surprisingly well, attracting and converting lower-funnel conversions who might not already be intending to donate to the cause. In other words, there’s a trick in using Google Search to prospect and convert simultaneously. 

While nonprofits shifted some spend away from Meta, which was the only channel to see a budgetary decrease (of 3%), it’s still a strong player — and part of the historically key Meta, Search, Display mix. But with ROAS dipping from 0.5 (in 2022) to 0.48 (this year), it’s no surprise nonprofits are starting to shift funds into other channels (at last!). I anticipate next year we’ll see a further drop, as cookies become deprecated and site retargeting becomes ever more arduous, further pushing that ROAS for Meta down.

While email remains a cornerstone function, its revenue is declining — and nonprofits would be well advised to ensure their mobile SMS programme’s up and running.

Organizations are still heavily using paid social to grow their email list through advocacy campaigns, and 2023  saw a continued email list growth, which increased by 7% this year after a 5% and 8% growth in the previous two years. 

But this isn’t translating to revenue as we’re used to. Overall, email revenue declined by 7% on average — and across the board, almost every email metric was lower in 2023 than it was in 2022. 

On the flipside, SMS messaging is on the rise: subscriber lists increased by 5% and messaging volume increased by a huge 40% in 2023. This is one to watch, with fundraising mobile messages generating $92 in revenue for every 1,000 messages sent, compared to just $76 for email. Certainly during my time at Comic Relief, I found our SMS programme was one of our most successful direct fundraising campaigns — if you haven’t already experimented on this front, start (or at the very least, start grabbing those SMS numbers in your lead gen forms so you’re set for the future).

TikTok saw a 4% increase in spend, but the sector hasn’t quite cracked fundraising on this channel yet — with multichannel journeys still key to driving returns.

Certainly, TikTok is one to watch. Not only was it fascinating to see that TikTok audiences have grown by 112% for nonprofits, it was interesting to see the increased testing that’s taking place on the channel. But with the channel’s ROAS coming in at 0.17, it’s currently one of the lowest performing digital channels from a fundraising standpoint. 

Most likely, this is due to the long-term journeys that are required for TikTok fundraising to be effective. Last year, I had the privilege of speaking at a Care2 event about this exact issue: I shared how one large UK charity has seen Facebook lead generation return similar CPAs to TikTok, and lead generation on TikTok is now a key part of their digital strategy.

For now, my outtake is this: for TikTok to work, a multi-stage journey’s required that captures data then nurtures audiences over other channels such as email and CRM retargeting. Naturally, this might not mean revenue gets directly attributed to TikTok as a channel — but if an holistic measurement approach is taken, channels can work as one ecosystem to nurture audiences from awareness to engagement and finally conversion. You can read more about this on my other blog, The Diversification Dilemma. 

My closing thoughts

Reading this year’s report, I was humbled to see all the great work that’s clearly being done across the sector, to diversify channels and test new approaches for online fundraising. It’s not easy, selling in a new channel or strategy — but clearly, it’s being done.

If 2023 has been the year of testing new channels, I hope that 2024 will be the year of crafting data-driven measurement frameworks to really quantify the impact of these shifts, so leaders across the sector don’t find themselves itching their heads at the end of the year and pondering what all of that spend actually achieved. 

As we move through the year, I have no doubt that marketers across the sector will be looking back at what they learned and asking difficult questions to make their 2024/5 fundraising stronger than ever — and hopefully, putting into practise some meaningful pressure tests or A/B approaches that pits AI against manual methods to really validate if that 25% awareness spend is translating to increased income.

As always, if you’d like to have a chat about any of your marketing efforts, or how you can craft measurable digital fundraising approaches, reach out.  

For the full M&R Benchmarks, check out the 2024 report.