The diversification dilemma: is it time to shake up your digital strategy?

Why nonprofits need to change how they view ROI if they want to keep up with and convert the donors of tomorrow.

The social media landscape is diversifying at a frightening pace. Users are abandoning Meta in their millions and spending more time on engagement-based platforms that offer light relief from doom-scrolling. 

Meta’s volume of active users has in the UK been shrinking, particularly since the tail end of 2022: falling from its peak of 57.1M users in March 2022 to 52M by the end of the year. TikTok, on the other hand, is skyrocketing: its user base grew by 200% between 2020-22 and shows no sign of slowing down just yet.

While we’re still waiting for the UK version of the 2023 M&R Benchmark Report, the US version that was released earlier this month found that 36% of digital fundraising ad spend went on Meta — with 35% going on Search and 22% on Display. It’s a model we’re all familiar with: raise awareness on Display then reap the rewards on Search, while prospecting and retargeting at scale on Meta, where budgets can flex more, and where growth hacking is more possible.

But it’s a tired model, with a shelf life. The writing’s on the wall: if nonprofits don’t diversify where they advertise, they’re going to be in a bind, soon. And by the time they’ve caught up, the donors of tomorrow might have gone elsewhere.

The problem with Meta

As a platform, Meta’s got its fair share of problems. 

It’s been hounded by the public and press in recent years, rightly so, for being a pawn in the Cambridge Analytica scandal, to turning a blind eye to hate speech on its platform.

In protest against Meta’s inaction toward combating hate speech, more than 1,000 brands withheld ad spend from the platform in 2022. The impact was, sadly, negligible: enjoying the decreased competitiveness, the majority of the top 100 spenders continued to pour advertising budget in, leading to ad spend growing by 10% during the boycott period than the previous year. 

But Meta’s poor form goes beyond inaction. It extends to its proactive drive to capitalise, at any cost. It’s moved at pace to monetise, without any regard to businesses or charities. In recent years, its algorithms have reduced organic reach, forcing brands into a corner where they need to pay to be seen. In 2022, organic posts were only seen by around 4% of page followers unless content was boosted. Meanwhile, CPMs increased - making it more expensive than ever to advertise, contributing to direct ROI falling from 0.7 to 0.6 among leading charities versus last year. With the cost of living crisis and COVID pandemic hitting nonprofits and SMEs hard, many simply don’t have the budget — and as organic reach continues to fall year-on-year, those with lower spends struggle to stand out. 

All of this is ‘in aid of user experience’, according to Meta. Even when the same user experience means a person who watches a far-right video from Katie Hopkins, Ben Sharpio or Candice Owens finds themselves propelled into an endless wormhole of suggested content by other far-right commentators that perpetuate divisive narratives and damage society. 

If enabling hate is the cost of being seen, that’s a tough pill to swallow for purpose-driven brands.

The way out requires a fundamental shift in measurement — and a willingness to test and learn

In order to diversify their spend away from Meta and traditional advertising models, nonprofits need a seismic shift — one that goes beyond paid media teams, into the very heart of budgeting. 

The paid media landscape is moving away from granular measurement into more holistic frameworks that make it tricky enough to accurately report on platform-specific returns as it is, but that challenge is going to get even tougher in the years ahead. Needless to say, there will be lots of headaches in lots of boardrooms across the country pretty soon.

Teams need to throw overly-simplistic return on ad spend measurement in the bin: moving away from GA reporting or short-term returns via Campaign Manager as a “source to truth”, to a more holistic view of measurement that considers the end-to-end user journey. Over a period of months, if not years. 

The day of Direct ROI is dying. Any donation that’s secured needs to be accompanied by a full-funnel view of 3-year projected outcomes that considers ongoing multichannel stewardship, second gifting and propensity to give monthly (which in turn needs a three to five year return scenarios overlaid). For this to be possible, nonprofits need to get their data in order and understand their audiences more granularly than ever, which is a huge barrier in itself.

The likes of TikTok might not be a competitor, just yet, for Meta’s donate ads with its ‘direct ROI’ attribution model. But if we can do away with an overly simplistic view of returns that isn’t as accurate as Meta would like us to believe anyway, we can start to truly diversify. By using fresher platforms to mine data, and get people into the lead generation funnel, nonprofits can list-build and generate returns over time through other channels such as email and SMS, or start even simpler, by testing their way into TikTok donate sticker functionality. As nonprofits move to use other platforms, you can be sure they too will follow suit and create products that give them what they need.

It may be bad news for Finance Teams in the short-term, that want a clear cost-return scenario from online fundraising activities to determine budget release for the year ahead, but it’s the way the market’s moving and like it or not it’s where we’re going to be in a few years from now anyway. Not only must we learn to be more flexible and cross-functional in our activation and measurement strategies, we need to ensure the targets that direct teams reflect the way the digital world actually works.

Until teams get flexible and realistic multi-year income targets that put audience acquisition at their heart and enable effective platform utilisation, nonprofits run the risk of forcing their teams to deploy short-term strategies that damage long-term growth.

If you’re looking for any advice on how you can diversify your advertising operation, get in touch.