But then we got to talking about money – about making it.
He admitted that for charities, making money online remains incredibly difficult.
He agreed that online media were undoubtedly a great way to enrich a supporters’ experience, and so perhaps increase their lifetime value.
In fact, at the agency I work at we do quite a lot of work in this area, creating online opportunities for donors to develop a stronger relationship with the cause they’re supporting.
But we’ve a long heritage in fundraising. We know how it works, we know how to engage and motivate our audiences. And we’re ‘media neutral’, so we can recommend the media mix that’s going to work best.
But there are a lot of start-up digital agencies (with a vested interest in online) who are pushing digital as the main channel that charities should be putting their time and and money into.
And social media – how they love to bang on about that. I’ve just read another hyperbolic article from a digital agency saying ‘any company that doesn’t have a Twitter strategy will get left behind’.
Really? Two small points:
1: Here today...
ITV bought Friends Reunited for £175 million. Then sold it less than four years later.
For £25 million.
In other words, a one-way ticket on that particular bandwagon cost them £150,000,000.
Ok, that was a soft target. Everyone knows Friends Reunited is old news. Twitter, Facebook, YouTube – they’re the big successes. Aren’t they?
Well, for their founders, perhaps – Facebook’s co-founder is the youngest-ever self-made billionaire.
But the phenomenon he created actually loses money. Big buckets of it. Its electricity bill alone is estimated at around £600,000. A month.
Twitter loses millions too. Only rivers of cash from venture capitalists keep it flowing. Though for how long is anyone’s guess.
And YouTube is apparently going to lose about 300 million quid this year.
Now, I’m not a genius economist (actually, there don’t seem to be any genius economists right now). But I do know that no business can lose that kind of money forever. Either they’ll have to close one day, or they’ll have to drastically change their business model in order to make money.
And who knows what effect that will have. MySpace plastered itself with ads to become profitable – and has been shedding users at a frightening rate ever since.
2: The culture of free.
One thing all the users of these sites have in common is that they like getting it for free. More than that: they expect it to be free.
That’s why most Spotify users choose the free version rather than the (very reasonably priced) paid-for service. And why Spotify is yet another popular online service that loses money.
So what happens when you try and get that audience to pay for something? Or, in the case of a charity, ask them for a donation?
The answer is, it’s really hard.
Like I said, despite the huge audiences on those sites, the digital guy I spoke to didn’t know of a single example of where social media was proving a significant way of recruiting people who go on to become genuine, valuable donors.
But I’ve lots of examples of how that’s still being done – very, very successfully – using so-called ‘traditional’ media.
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You're right that it is hard to fundraise successfully using social media.
ReplyDeleteHowever, I don't think that the two points you raise are such hindrances to fundraising. The fact that Twitter the company might not be around in a year's time, that MySpace was popular for just a few years, that YouTube is still not profitable after more than four years are worth noting. But they are all simply opportunities for fundraisers.
Someone else is paying the bill for these remarkable spaces where donors and potential donors meet every day. While that confirms your point that you shouldn't put all your fundraising eggs in the digital basket, or expect a social media site or tool to last for long, it's not a reason not to grab these opportunities.
If one in every seven web pages viewed in the UK is a Facebook page (stats from October 2009), with 20 million UK users registered on Facebook, would it not be negligent of a charity not to spend time exploring, testing and retesting approaches on this single site?
Yes, Facebook isn't the perfect fundraising tool - you can't export data, you can't analyse it etc. But it's good enough. And so will the next site/tool that the public takes to in large numbers in a few years.
Secondly the public's appetite and desire for free content and tools need not hinder fundraising. Again, that's a problem for the social network site's owners. Fundraisers simply need to focus on how best to exploit these free tools while they are free.
The public doesn't expect to read about food, books, fashion, entertainment or other subjects on social media sites and then go and get free food from Sainsbury's, or free clothes from M&S, or free books from Amazon. The message is free on these sites, but the mentioned or promoted product is still paid-for.
You make several good points Howard, thanks for your comments.
ReplyDeleteAnd you're absolutely right, the rise and rise of social media means there's definitely a place for fundraisers to use it as a way of building understanding, involvement and empathy for their cause.
But we need to understand what the value of that activity might be - since it definitely has a cost, in both time and money.Especially if you use the social media specialists I mentioned.
As we know, currently it seems the donations you can trace back to social media activity are very, very small. Far less than you might hope for, given the amount of energy required to maintain a strong social media presence.
Whereas offline media still raises serious amounts of cash. Such as the recent mailing campaign the agency I work at did for the Royal British Legion, which raised over £2,000,000...