My Guest:
George Weiner: How Much To Spend On Ads In 2022
“The Nonprofit Advertising Benchmark Study” will help you decide what’s the right amount for you to spend on advertising if you want to be comparable to your peers. At the very least, it’s a place to start your research on ad spending. George Weiner explains the study. He’s chief whaler at Whole Whale. Does that make him the Captain Ahab of nonprofit tech? Listen to find out.
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Transcript for 568_tony_martignetti_nonprofit_radio_20211129.mp3
wow, incredible intro. Thank you so much. tony Thanks for having having me on [00:02:26.63] spk_1:
my pleasure, my pleasure. What’s what’s behind the company name? Whole whale which which leads you to be whole whaler. What’s that about? [00:03:23.44] spk_0:
Yeah, we found it a decade ago and at the time the thought that struck me was ultimately the way that the nan, you know the Nantucket whalers in the massachusetts whalers in the 18 fifties would look at a whale and they would basically bring back lamp oil and throw the rest away in times of abundance. We tend to be a touch wasteful instead of using everything from the bluebird of the bone. And I took that lens and said, I felt like many social impact organizations weren’t looking at the opportunity to leverage data and technology and the rising web in that way. And they simply said, hey, hey, here’s the internet and the most powerful tool we’ve ever been given. Let’s put a donate button on it and call it a day. And so I kind of gave rise to how we view this time of abundance with an eye toward the best ways of leveraging data intact to increase the impact. [00:03:57.64] spk_1:
Very interesting, very interesting. Uh you uh you drew that analogy between the two interesting. All right. Um, so are you the captain? Ahab, do you have a deep revenge? I’m trusting you know the story of Moby dick. Do you have anything deeply uh hurting you that you need revenge for? That’s going to drive the the ship of what was it the uh um The pick, watch the pick what it’s going to drive your whole whale peak watt into the ground. [00:04:11.14] spk_0:
I’ve got a few white whales. Maybe I chase, you know, I got a few white whales maybe that I chase. Yeah. The other reason I found it all whales. Because of the nautical puns. I mean, you’re virtually swimming in them anywhere you turn and with regard to the things that chase, you know, the nonprofit ad study is one, but we like we go after interesting projects along the way. In addition to our our day to day work as consultants. We also develop products and try to put things out there in the ecosystem that help others do their jobs better. Or learn more about whatever field they’re wandering and so I can get distracted by a white whale or two. [00:04:48.64] spk_1:
Okay, I see the navigate your helping folks navigate. Yes. The of course, the nautical you’re right. The uh nautical puns are are abundant. [00:04:52.84] spk_0:
Yeah, they have to be they have to be [00:05:05.44] spk_1:
navigate navigate the waters. All right. All right. So, we’ll see if your captain Ahab flush that out. See if you’ve hopefully you’re not going to do to uh to hold whale. What what the captain did too [00:05:07.82] spk_0:
Made it 10 years so far. But I think that’s mainly because of an amazing team that basically just puts me in the right direction. Okay. It’s [00:05:18.64] spk_1:
very gracious of you. All right. What is this this uh, nonprofit advertising benchmark study? What’s this thing all about? [00:06:18.54] spk_0:
We wanted to answer a simple question and you know, never underestimate the power of a simple question because it can lead to, you know, a lot of, you know, threads essentially how much should a nonprofit spend on ads? This idea of advertising and promotion, it’s available technically informed nine nineties and with the help of cause I. Q. Which is a, you know, been a great partner in this. We analyzed seven over 7000 organizations to get that answer. And we chose organizations with a number of filters because clearly, you know, there’s 1.8 million nonprofits out there depending on how you’re sort of measuring the five oh one C threes and they’re like, oh that’s too many. And also, uh, you know, a third of them are not necessarily even over the threshold for reporting to the I. R. S. So we wanted to find 1 to 10 million in revenue organizations between one Million and 10 million and also met other certain criteria. And then we just sort of just, we dove in headfirst to to answer that question, how much should non profit spend on paid ads. [00:06:36.34] spk_1:
Okay, so among your sample size of 7100 or so you you were you looked to see there’s I guess there’s a, there’s a line on the 9 90 that where folks where organizations report advertising expenses and that’s what, that’s what you were looking for, [00:07:08.64] spk_0:
correct. It’s, you know, publicly disclosed because that’s, you know, the game and we look at that. So, you know, there are certain assumptions there that, you know, we note in the study of what that line is and what it isn’t. So it isn’t necessarily saying All right, this is the amount that people spent just on facebook ads or google ads. It’s advertising and promotion of the organization. So, you know, that could extend to people Paying for print ads. It could even in some cases, but we filtered it out for the most part include the cost paid to advertising firms to run ads. Uh, though many according to, I think the analysis, we didn’t hear only about like five or 10% in that range actually incorporated in there. And those are the outliers. [00:07:43.14] spk_1:
Okay. Okay. And this specifically, thank you. Cause I was going to ask you about, you know, how, how we define advertising or how you define advertising this study and it specifically doesn’t include google ad grant money. Right? That’s, that’s different. [00:07:58.84] spk_0:
Super important. Thanks for bringing that up. And it’s one of those sort of, you know, expert pieces there that it’s an in kind amount that doesn’t get reported on that line. Right? The google ad grants and you 10-K per month in money spent is something that would show up on your in kind value, not actual dollars out the door. [00:09:03.04] spk_1:
Okay. Right. So it’s captured elsewhere. So it’s not part of the study here. Okay. Um, and so I was struck, you know, I’ve I’ve known that these that the vast majority of nonprofits are are smaller, you know, smaller revenue amounts. But I guess just reading it again, reminding me refreshing my recollection that uh, 93 a half percent of nonprofits are under $1 million dollars in revenue and and only 1.5% are over $10 million dollars in revenue. So that this this, you know, our universe of nonprofits, that this is not related to advertising, although, I mean, it is in terms of big words spend more on advertising, but that’s not my point. My point is just it just drives home that so many of our of our colleagues in nonprofits are organizations that are under $1 million dollars in revenue, 93 93 a half percent are under a million dollars, vast majority. Again. [00:10:11.74] spk_0:
Yeah. And it’s important to note that, you know, because I think maybe in our minds or because of the narratives, we see large organizations and assume that they’re all like multimillion dollar, but like, this is the truth of it and that’s Yeah, that 1.44, exact five oh one c three nonprofit organizations and, you know, there’s a very, very small fraction of them that kind of live above that line, You know, like roughly speaking the same is kind of true in business ecosystems as well. You know, it’s hard to get to a million dollars. You realize that. But also when you look at the market how, how much of a long tail there really is. And we wanted to sort of remove that and say like once an organization has kind of, I mean not saying you’ve made it, but you were in rarer air, certainly after crossing $1 million you were running something that certainly has enough residents to to reach that level. And then we also filtered by age to be like, well, wait a minute. Maybe they’re like one night, you know, overnight successes or pieces like that. So we looked at organizations over under this century funded founded in uh, and and took a look at that as well. But it is, it is a curious point. We wanted to start with that context because I don’t think it’s given enough in the sense of nonprofit industry and you like immediately sort of have this availability heuristic meaning like I remember the last thing I saw and either it’s the red cross or you know, you know, pets down the corner saving one pet at a time. [00:10:41.44] spk_1:
The availability heuristic. Thank you dropping that tech guy. You know, you have to, uh, well you, I’ll keep you out of jargon jail because you you explained it immediately [00:10:47.03] spk_0:
go to [00:10:51.64] spk_1:
The availability heuristic now it’s a good one. I love it. Uh huh. And you uh you flushed it out so folks understand what you’re talking about. [00:10:56.23] spk_0:
I still will probably end up in jail though, won’t you [00:11:10.64] spk_1:
didn’t do it? Well that could be we’ll see how we’ll see how the conversation goes. But you didn’t do it pretentious li like you know the all you would have available, all you, all you would have within your within your thinking at that point would be subject to the availability heuristic. [00:11:13.34] spk_0:
Yeah. And then just leave it. Didn’t just leave it [00:11:47.74] spk_1:
there and then make me ask and then make you flush it out. Which would have put you in jargon jail. So all right now because your availability heuristic. Thank you. This is a technology guy. Data data data guy, expect those things. I have a book like that. What’s that way out of this cool book from college. Alternative interpretations of data based conclusions. I think availability is in there. You know, uh confusing correlation and cause and effect. That’s a very common one. This is cool book. Can you show it to you [00:11:50.24] spk_0:
what’s strong? I like that [00:12:07.34] spk_1:
rival hypotheses. That’s what it is, rival hypothesis. Alternative interpretations of data basically. Okay, so enough pretense for now let’s talk about the study a little more. Yes. What stood out for you uh findings. What what what was most informative to you that and you think our listeners need to know? [00:13:12.84] spk_0:
Yeah. The top line, I feel like we have that that cliffhanger is like how much should number I would spend. It’s like how much should we spend already? What’s the number? So I felt like we owed it to the audience to give them a number with a lot of asterisks and the number which is the median spend for our sample was basically $12,070. Which roughly equated to 5% of the median revenue as a as a ratio. So you know, knowing nothing else turning off the podcast right now you’re like, all right, we should be like at least considering that. and 60% of This sample, 60% were actually spending on ads or spending on advertising and promotion. I’m going to use that interchange of advertising and promotion and add but advertising activities 60% did and 40% did. Not. That actually surprised me. I actually really believe that there would be a lot more organizations spending. So you know that that was a bit of a surprise to me. [00:13:16.87] spk_1:
Okay. Right. Not even not even 2/3 [00:13:20.04] spk_0:
are spot on your Yeah, exactly. Exactly on [00:13:22.59] spk_1:
Advertising. Okay. And the median spend is 12,000 between friends. We can around the 70 away. [00:13:29.35] spk_0:
So 12 spot me 70 12,000 [00:13:31.94] spk_1:
dollars. There you go. That’s that’s your [00:13:34.30] spk_0:
feet for being option. [00:13:48.14] spk_1:
Um uh And the average was, you know, it was interesting. The average was quite the average of like 4.2 million wasn’t the average was very highly skewed. Do you remember that? Right? It was it was something very huge. [00:14:37.04] spk_0:
Oh yeah. I mean you had to throw out the average because of these outliers. There’s like these massive positive outliers and there’s some nonprofits out there that are spending quite significantly. And you know, you sort of begin to touch on lobbying. There’s like um, you know, there was a pro life America group up there and the millions of dollars and you know, that’s that’s not data that necessarily is going to help you, right. If Bill Gates suddenly walked into your boardroom, you’d all be average billionaires. Not helpful. Right. That that kind of insight is not helpful. So that’s why we chose the median. I’m sure it’s in your book of trying to avoid those mistakes. And you know, we we went through and tried to explain why we chose the numbers we did and also give access to the full data dashboard if people are interested in it. [00:14:51.34] spk_1:
Alright, so, well, since you mentioned access to this, how do how do folks get the summary and I’ll be sure to say at the end, you can remind me if I don’t, how do you get the, get the, get the summary of the study. [00:14:55.14] spk_0:
So it’s at a whole whale dot com slash advertising tried to make it pretty simple. We have a nice infographic there and the ability to download the entire report. [00:15:05.74] spk_1:
Okay. And there’s a little fee there’s a $5 fee if you want if you want [00:15:08.89] spk_0:
All this. So yeah the full data and dashboard if you want to go digging into it. Um and getting access to that. Yeah that’s the $5 fee. But you get the whole study which is you know 21, pages of awesome. That’s you know that’s available [00:17:05.14] spk_1:
right? That’s free. That’s absolutely free. Okay. Hold well dot com slash advertising it’s time for a break. Turn to communications. Are you making your plans for 2022 for fundraising? Marketing communications. Do you need help Look at turn two? If you’re like if you’re thinking about fundraising you need to raise more money in 2022 marketing and communications. Your content, the stuff that goes out all that that you’re creating for your donors for general awareness. If you need help with it, think about turn to because that’s what they do. They have a background in non profits. They understand the nonprofit community so you’re not you’re not hiring an agency that only works with you know cos they understand the nonprofit space. They can help you develop your content, help you hone those messages, Get those messages out like you’ve been hearing me talk about, right? So if you need to raise more money or if you need to go to the next level in marketing communications In 2022, think about turn to because your story is their mission turn hyphen two dot C o Now back to how much to spend on ads in 2022. uh, the, the 80 20 rule applies here is one of your, One of your takeaways that uh, the top 20% spend about 80% of the ad revenue. Yeah. [00:17:06.54] spk_0:
It always seems to happen and I always seem surprised when I find that power law, right? The 80 20 shows up on like [00:17:21.64] spk_1:
how again does it keep happening time after time after time for in a wide variety of applications, 80 20 applies. How is our world, [00:17:57.74] spk_0:
especially in actually, especially in financial distribution. But I was actually, I did the analysis. I was like, it probably won’t in this case show and I was like, you gotta be kidding me. So it wasn’t exactly 80 20 it was 24 76. So that’s about 24% spent 80% of that ad spend coming back to your point on average is being like much higher than in a potential bit misleading. So you do have that handful of organization spending quite a bit and the top 13 organizations in our study spent over a million dollars. So you kind of see that heavy, heavy waiting. And if it’s like, all right, you know, the purpose of our organization is the public awareness of this particular issue. And the way we do it is just turned donations into advertising and they’re nonprofits that just do that And they skirt the line awful close to lobbying, but they stay this side of fair. [00:19:23.04] spk_1:
Okay. All right. Um, and you know, it occurs to me to this is, um, you know, you’re stuck with a lackluster host who is, whose thinking is not, uh, completely linear at all times, uh, if ever on that. But, uh, this is not, this is not a survey. So we’re not, we don’t have biases across people giving what they think is a good answer. You know, we don’t have those. So that just goes back to my book, the rival hypotheses, you know, self reports, not self reported data. Um, you do have the problem, like you said, you had to correct for whether people use agencies to produce their ads, but you were able to sort that out. So there’s, there’s some potential differentiation in, in the way people report organizations report advertising on their 9 90. But overall this is more reliable than survey data. [00:20:13.84] spk_0:
Yeah. And I’m glad you brought that up. This is, you know, reported. So, I mean if you get back down to it, Yes, there is a human somewhere in the financial department of this non profit making that decision, but they’re doing that at a very macro stage and we’re pulling raw data were not wandering in and saying, Hey, how much do you spend on ads and you know, looking at, You know, 250 random nonprofits that decided to randomly fill out a survey with limiting information or you know, not being wanted to be fully transparent for whatever reasons. This is you know, this is source data from the organization according to the I. R. S aggregated by cause I. Q. And then we analyzed it to really find those answers and it’s something that we just felt was lacking. We felt like there was a lot of uh, we’ll call it a qualitative As opposed to quantitative type of research out there being like, Oh, here’s the official number. And then you look at the fine print and realize it was the opinion of 60 people not problems. And I’m like, I don’t know [00:20:33.14] spk_1:
a lot of the answer. A lot of times people say, well it depends, it depends. So you’ve drilled down more than it depends. [00:20:58.94] spk_0:
We’ve drilled down more and also been able to look at individual cause areas. So not just lumping one of my, one of my watchwords is being careful of lumping together the entire industry into one tidy bucket and assuming they all behave the same way. And if you know one nonprofit, you know one non profit and so we actually have, you know, in one of our findings divided up The type and cause focus of the organization to kind of get a better idea in that distribution, which tells, you know, another different story, which is all the more to say. I, I hesitated but knew we dessert we we owed the audience an answer of $12,000. But even that can be misleading depending on the industry and sub industry weren’t [00:21:34.94] spk_1:
well, like arts organizations for instance, spend the most right. That’s what you’re, you’re, you’re teasing us a little bit. But I don’t do that to nonprofit radio listeners. You can, you can attempt it, but I won’t allow it. So, uh, let’s, uh, so arts organizations spend the most on advertising, right? [00:22:15.54] spk_0:
Organizations were the highest spender. Again, surprising to me because I actually thought it would be health, I thought would be the health industry spending, you know, more to research awareness and pieces like that. But you know, frankly at the end of the day, you need to get people to attend to show up to, you know, go to these, you know, one time events to museums on location and so these, these were the highest highest spenders for sure. And promoters of performing arts sports and similar events were at the top and then the lowest, you know, because you look at the high and low, we’re less surprisingly the grantmakers and giving services like if you’re giving grants, guess what people find Jack, If you’re writing checks, people, people [00:22:42.04] spk_1:
find you events, you, you you, you teased out what ad spending does too event income and I’ll let you, I’ll let you reveal what was found. [00:22:46.44] spk_0:
Yeah, this is a bit of a nothing burger on the face of it because I had, here’s a case where I went in with maybe a touch of an agenda. I had an agenda. I’m going to admit it that I thought if a nonprofit was spending research, going [00:23:03.00] spk_1:
back to my book, researcher bias. [00:23:38.74] spk_0:
Yeah, this was researcher bias. But I left it in because I was so surprised that the ad spend of a nonprofit did not correlate. Uh, mind you even causation that didn’t even correlate in any meaningful way to hire event income. So event income is another thing technically reported by non profits in the 990 that you can pull aggregate and analyze. I’ll put an asterisk there, there are problems with that reporting which may be impacted this. But ultimately there was no correlation at all with this idea that or eggs without ads and with ads had any meaningful difference in the amount raised with event fundraising. [00:23:56.54] spk_1:
Okay, Alright. Clearly you had, you had a hypothesis because that’s why you pulled the event income Data off the 1990s. [00:25:03.44] spk_0:
Yeah. I mean, my hope was to show like I had, I had to hope that we would show that guess what if you’re spending to promote your event, your event does better And therefore an aggregate. They should be the folks that are making more money, you know, when in fact, you know, the of our, I can give some context with the data size. Uh, about 68% of our group had listed event fundraising expenses and 58% of that group reporting event fundraising revenue from their form nine nineties. So right in there, you’re like, wait a minute. They didn’t all make money, nope, just events that happened. Right? So I think it’s important. Not all events have maybe the purpose of fundraising, but that’s where they get listed. There’s also the question of in the accounting department, did that gift of $100,000 that came in five days after the event? Did that go to the capital campaign or did that go to the fundraising event? There’s a lot of mushiness there. So, you know, I’ll blame it on the data, but I wanted to report it because it was something that sort of keep us honest moment. [00:25:09.32] spk_1:
Yeah. Okay. But it’s valid. You reported as a finding. So [00:25:13.12] spk_0:
like we. Did you believe it? Believe it. Ok. [00:27:30.84] spk_1:
It’s time for Tony’s take two. It’s the holidays and it’s the fourth quarter. The holidays. I hope you enjoyed your thanksgiving time with family, friends. Time for yourself. These things are important. You’ve got to take time to rejuvenate yourself to relax however you you know what’s best for you, however you do that for yourself. However you relax. It might be some people, some people relax by, you know, adrenaline rushes and uh, you know, zip cordon however you relax. I hope you did it over thanksgiving and I hope you will continue it throughout the holiday season. We’re in the midst of Hanukkah right now christmas coming up whatever your holiday is. I hope that you will be good to yourself as well as of course your family, loved ones and friends that you’re getting together with and it is the fourth quarter. So there’s a lot of pressure. I know vast amounts of, of fundraising revenue come in, not only the fourth quarter, but even in just in december. I know. So I know you’ve got those pressures. What am I talking about? Balance, balance, take care of yourself so you can take care of your non profit Please do both please for the holiday season this year. That is Tony’s take two. We’ve got boo koo but loads more time for How much to spend on ads in 2022, the older organizations, older organizations spend more then then I’m sorry older organizations spend, uh, less likely to spend. I was thinking of larger. I was thinking of size, not age, older organizations spend less. That that seems to make sense. There are, when we presume that older organizations have have greater, uh market awareness because they’ve been around longer. [00:27:59.74] spk_0:
I guess the, I love this take away, this was actually, I have to give credit to Kobe on our team who ran the ranch and manage this analysis. He just, he was like, I would love to look at the date funded because the underlying hypothesis here is that older organizations that were incubated and created in a time frankly pre web 12. Oh, would see less value in their operating less value in paying to play in creating ads and creating advertising. Oh, that’s [00:28:14.34] spk_1:
the hypo that you think that’s the car. They haven’t adapted to our digital ad environment. [00:28:15.80] spk_0:
I mean it’s, we call the rising generation digital natives. Right? How much time do you spend on Tiktok? Like there’s, I think there’s a fundamental reality. [00:28:24.88] spk_1:
I’ve never, I’ve never been there. But they can hire people, I don’t need, I can hire somebody to do Tiktok for me to watch you George. That’s so cynical about older organizations. But let’s all right. [00:28:40.44] spk_0:
You’re right. Let’s, can we, we can tell them the numbers though. It wasn’t that massively off. I will always say that. Um, the, [00:28:41.84] spk_1:
alright, let’s start with, what’s an older organization. How did you, how did you group or cluster or how did you define age? [00:28:48.66] spk_0:
How did I unfairly categorize this poor lined group of nickel. They [00:29:03.74] spk_1:
Are capable of even hiring people to do something post 1950. I mean these these folks are still watching black and white television and some of them are still listening to silent movies in your mind. [00:29:07.04] spk_0:
Uh, that side, the set with this century. So it’s over under year 2000, which I thought was an interesting inflection point and also it’s nice and round. So [00:29:17.86] spk_1:
There’s a whole bunch of before 2000. Okay. [00:30:20.54] spk_0:
Oh yeah, no, no, I think That, I mean it’s a long swath of time to look at and you know, the difference is really that this uh in last century 41% had no ads versus in this century 37%. So you know, 4% points total difference in just the binary decision. Should we have that ads, advertising and promotion? Um and then the median spend of this century was not that much higher, but it’s about 400 ISH, $400 higher uh simply by nothing else controlling for everything else, right? Like nothing else. You just, you’re just going to spend a little bit more if you are going to spend and you’re more likely to be spending on that. So it wasn’t mine, I kind of wish there was a bigger differential. So it’s actually much tighter than, and I have to, I have to say the counter narrative here is that do something dot org, one of my alma mater’s uh what Founded in 1993 and still had a well well above average as fund. So they are like the outlier that I didn’t even have to take that long to find. [00:30:38.34] spk_1:
It’s impressive that you were the chief technology officer and do something that’s uh that’s a, that’s quite a renowned organization for What, what’s their sweet spot, 14-17 or 14-18 or 14-20 year olds taking, taking action and all the data that you gathered from them. That’s uh that’s quite a, that’s quite a job to have had. It’s impressive. [00:31:17.44] spk_0:
It was an interesting time to have that role. I’ll say that for sure because there was a lot of, you know, a lot of tech being just sort of introduced web to, oh, just becoming of age, you know, you look at facebook pages and that existing for the first time in that period of time being like, what do we do with this now? I don’t know, what do we do? Like there was a lot of like, have you used this thing, you’re like, oh God, what is this thing now that I have to go figure out and then building our own platform as well and then sort of, you know, data privacy and protection and jumping in? I’d say the biggest piece we figured out was SMS in that period of time, the power of text messaging, which is still, you know, widely under appreciated, I’d say in the social impact sector. I do take, you know, huge nod of the hat to twilio dot org and what they’re doing out there, but it’s a, you know, it was an interesting time to be the cto [00:31:49.34] spk_1:
and what was the the prime age group for? Do something? I was trying to guess, I was like 14 to 18 or something. Yeah, it’s [00:32:15.14] spk_0:
extended, you know, I think they would extend it to through college age, but there’s like different sort of calls to action along the way. While I was there, we were predominantly focused on teens and tweens and that sort of intro level to volunteerism and engagement to foster a lifetime of social engagement. And and since then they’ve really evolved because guess what? You know, if you know, if you have half a million people that are of this age, it’s silly to say like, all right, goodbye, Good luck. I’m like, yeah, we can still provide services. We can still provide ways for them to engage. So it’s kind of an interesting quandary. I think for a lot of youth focused organizations to be like, where do you draw that line? [00:32:53.54] spk_1:
Well, and because eventually those folks are gonna turn over 45 and then they’re just gonna be dinosaurs. Like like you hypothesized about the older organizations so you better get all the data you can now or you know, do something better because once, they once they turned 45, I mean they’re practically dead and they can’t adapt. Their their minds [00:32:55.86] spk_0:
are impossible. [00:32:57.15] spk_1:
Yeah. Their brains are neck roast it. [00:32:59.63] spk_0:
Well actually, no, not completely, but maybe 4% more of them. Like 4% points. four [00:33:04.59] spk_1:
percent. Alright. Yeah. Good. Thank you for bringing us back to the survey study. So we’re not a servant to the study, definitely [00:33:11.63] spk_0:
stepped in it. I’m sorry. [00:33:22.84] spk_1:
So uh let’s talk about what I what I had confused with that larger larger organizations. What did you find out about that? That’s that’s it. [00:34:56.04] spk_0:
Well, I think the interesting thing is not that hey, surprise larger people with more money, spend more money. This just in from things you probably already knew uh is that it’s the same ratio. So that sort of golden ratio of 5% of revenue just paired out for small and large organizations. My assumption there that I went in there with a sort of hypothesis was that The smaller organizations would probably disproportionately spend at a higher ratio, but it didn’t turn out to be true. So in fact, that sort of 5% of revenue held across large and small organizations, albeit yeah, large organizations spent more. So if you do like if you just take away a quick thing, you could accidentally assume that oh, large organizations got big by spending more. You’re like, well no, they’re larger and they still spend at that ratio, which is in and of itself interesting because it is a much bigger number. And between those two groups where we divided it between large and small, which was over under I should note small organizations being 125 million. So small and 5 to 10 million. So we just basically through the line down the middle and it just equated to the large organizations had a median those three X. In terms of revenue three X. The amount that the 1 to 5 did and that was the same ratio three X more in ad spend. So you know, if you were doing lazy reporting, you say like large organizations spend three times the amount you’re like, Yeah, but that’s just a symptom of numbers. Okay, okay. [00:35:04.24] spk_1:
And employees, you also, you also tracked the number of full time employees at, at organizations. [00:35:06.54] spk_0:
Yeah, this was a bear. Would [00:35:08.42] spk_1:
you find related to? Why is it a bear? [00:35:17.44] spk_0:
It was a bear. It was just really difficult to do to like segment based on, you know how many employees and they’re simple. [00:35:18.71] spk_1:
Isn’t there a simple question on the 9 90 I’m not an accountant. So I don’t [00:36:07.13] spk_0:
know the total number of employees is technically available. So we were able to grab that number and then parse it out. It’s just parsing it between under 55 to 9, 10 to 14 employees, 15 to 19 employees. Uh and sort of scaling that up. The biggest jump happens really from, you know, organizations with less than five employees just aren’t really spending on ads. And the hot take there is that, you know, surprise, it takes people to run the ads running ads and promotions takes dedicated, you know, person or part of a person to truly run. And then as you sort of scale up, you have like random ebbs and flows, but the biggest jump really is that like if you have an organization with under five people, um, they’re really, they’re nowhere near that median ad spend because they come in at like uh 500 bucks versus immediately get to $2000. Um, once you get 5 to 9 and then the next biggest jump, you know, happens once you’re over 24 people, just larger organizations [00:36:42.33] spk_1:
acquaintance with what goes into this, what why it takes you just said it takes a person or at least a part of a person for organizations that aren’t doing this for the, for the, Well for the 60% that that aren’t spending, what what did they have to devote time to? [00:36:47.93] spk_0:
It is the most valuable asset of nonprofit has its not the revenue, it’s the time of the people working and to run an ad on facebook to place an ad in the paper. Let’s say if you’re running to place an ad on this very podcast, it takes time for someone to email setup, established the price, manage and test the R. O. I. [00:37:34.53] spk_1:
It’s not create uh an obstacle where it doesn’t exist. All you have to do is email tony at tony-martignetti dot com. If you want to be a sponsor of nonprofit radio it’s quite a fluid process. George’s referring to George is referring to a university is not that well acquainted with right. This study is not on podcasting advertising When, when he does that one. I hope I will be a part of it. But uh, the, the, I don’t know about the podcasting universe, but if you want to be a sponsor of nonprofit radio it’s a very fluid, easy process. You’re talking directly to the host of the ceo. Just [00:37:44.47] spk_0:
email you, do it right now. We can do it right now. [00:38:00.62] spk_1:
Yes, you can do it right now. Whole whale. If whole whale was a sponsor, you would know how fluid and simple it is. But you haven’t taken, you haven’t taken that leap. So all right, let’s not go outside the bounds of the study as we’re, as we’re trying to draw conclusions. So [00:38:16.22] spk_0:
We take, you know, we sort of take it as sort of maybe a core number that, Oh, you know, we can spend $12,000. A median number, but it doesn’t happen by itself. I mean, nothing simply does. So that that type of ad management was in the back of our mind saying like, you know, you have to track the R. O. Y. You have to create the report for the boss. You have to set up the landing page or whatever it may be that you’re running ads for. It’s not just as simple as saying like, oh cool, no problem. You know, through your credit card over there and you know, let it run. So that’s the thought that it takes labor to implement ads [00:38:39.72] spk_1:
and your study makes the point that even if you’re hiring someone to do the ads for you. You need someone to oversee the work of the consultant or the firm. [00:39:07.32] spk_0:
Yeah, I mean the numbers bear out that, you know, it definitely tracks as you go up in a number of employees, um that you’re, you’re able to see a higher spend. Now. That’s also corollary to the amount of revenue. But we also show that along the way, which, you know, incrementally increases but doesn’t necessarily follow along with the differences that you see. So, you know, I don’t purport that this study will show you how to set up your advertising department. But it will tell you that you can’t assume this thing happens in a vacuum and without labor. [00:40:03.11] spk_1:
Yes. Okay. Well, and you’re a digital uh, advertising agency in at least in part, how much of a full time employee would you do you estimate it would take for? Well, it doesn’t really well for a smaller organization, let’s say they let’s say someone has just 10 employees or fewer like what, how many, what percentage of a full time employees time would that size organization Spending on ads if they were gonna move themselves from the 60% that don’t advertise at all to the 40% that do [00:40:20.81] spk_0:
an interesting framing there. If you had 10 employees according to a study, you’d have an average revenue of roughly call it 2.3 million your median ad spend for that cluster would be $2100 and You know, oh, that doesn’t require a full time employee. But it’s gonna take about, you know, 2100 [00:40:28.61] spk_1:
That’s in a year. That’s 2100 a year. Yeah. So you’re just spending a little under $200 a month. [00:40:40.21] spk_0:
I mean, Yeah, I mean and and and 2000. Yeah, [00:40:42.12] spk_1:
22,000, exactly. 200 a month will be 2400 a year. So you’re saying 2100. So [00:41:49.21] spk_0:
Yeah. So for that number that’s, that’s easily managed in 10% of somebody’s time depending on the type of Advertising activity that you’re doing. The hope is that that allows you enough to test where there’s value and increase that number, ads can be spent for a number of different reasons. And this is getting back to maybe why my assumption on fundraising was so flawed is ads may be spent to spread awareness of a topic a theme to increase public awareness. I don’t know for vaccines for health research, it’s not necessarily direct 1-1 ratio with fundraising. However, and if you are able and you are trying to turn one ad dollar into two donated dollars and you figure out a way to do that. It’s the hope that spending that and having somebody paying attention to it may figure out a way to get a bit of a little bit of a money engine going for you, spending adds to increase donations to the organization. And that Is a hope of this study. It is a hope that you’re saying, you know what it is worth, frankly 20% of someone’s time to play around with some amount of money that would let us learn and then do more of what works. [00:42:29.30] spk_1:
Okay. Okay. That’s a pretty good wrap up actually. But I’ll give you a chance to to make it official because we’ve, you’ve covered all your explicit findings in the, in the study which folks can get at whole whale dot com slash advertising very appropriately named simple. Uh, simple U. R. L. Whole whale dot com slash advertising. What would you like to leave folks with George? [00:42:33.10] spk_0:
I think that point lands hopefully. Well, and I haven’t offended any older organizations out there from which only only older, [00:42:41.44] spk_1:
only older people. You haven’t offended any organization, not just the older people [00:42:45.18] spk_0:
For 4% of them. Right. [00:42:48.60] spk_1:
Well, that was, that was a differential, but it seemed [00:42:51.50] spk_0:
Like it was 100% of those people were offended before. [00:42:56.31] spk_1:
No, no, no, no. The way you did it, it was, it was wider. [00:42:59.55] spk_0:
It was [00:43:00.19] spk_1:
good [00:43:00.78] spk_0:
differential. I [00:43:07.30] spk_1:
understand the differential was 4%. You didn’t offend only 4% of People over 45. Now you offended most of us. [00:44:35.79] spk_0:
That’s, that’s pretty good. Well, I’ll be joining you shortly so I can, I can join in the offending club. I uh, I will say that there is a lot to, to dig into here, but it is really meant to be an asset for anyone making the case in an organization to say, Hey, why don’t we try this? Why don’t we try to spend? It seems like our counterparts that are in this field are doing so in learning and so if you’re not spending, you’re not learning. And when I look at platforms, social platforms, that purport to be, you know, ways for you to get this organic traffic that will magically come to your site. So if you are posting, for example, on facebook, on instagram, frankly on most social platforms, you are losing money because the platform truly for for non profits for companies. Social media platforms are advertising platforms first and social platforms. Second, one more time. If you are a company, if you are a non profit Social Media is an advertising platform 1st And in an organic social network. 2nd, possibly distant second. Depending on which one we’re talking about. And so it’s like sending somebody in your communications remarketing department to work without a computer by not saying, hey, here’s a bit add money to play with and learn what might be possible for us. So that’s, that’s the thought I want to leave you with. I think. [00:45:10.89] spk_1:
All right and not just me. All our listeners. Thank you. He’s George wegner He’s the chief. Well, at whole whale, whole whale dot com hotmail dot com slash advertising for the nonprofit advertising benchmark study. If you’re on twitter there at whole whale, thank you, George. Terrific. Thanks for sharing and thanks for being a good sport captain. Ahab. Mhm. [00:45:11.69] spk_0:
Thanks Tony. Thanks for having us [00:45:42.49] spk_1:
next week purpose driven marketing. If you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. And let me remind you how simple it is to be a nonprofit radio sponsor. Just email, tony up, tony-martignetti dot com. Our creative producer is Claire Meyerhoff [00:45:57.79] spk_2:
shows social media is by Susan Chavez. Marc Silverman is our web guy and this music is by scott stein, thank you for that. Affirmation Scotty be with me next week for nonprofit radio big nonprofit [00:46:15.59] spk_1:
ideas for the However, go out and be great.
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[00:02:18.04] spk_1:
Hello and welcome to Tony-Martignetti non profit radio big nonprofit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast. Oh, I’m glad you’re with me. I’d suffer with odo toxicity if I heard that you missed this week’s show How much to spend on ads. In 2022, the nonprofit advertising benchmark study, we’ll help you decide what’s the right amount for you to spend on advertising if you want to be comparable to your peers at the very least, it’s a place to start your research on ad spending George winner explains the study. He’s chief whaler at whole whale. Does that make him the captain ahab of nonprofit tech. Let’s find out on tony state too. It’s the holidays and fourth quarter sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. It’s a pleasure to welcome George winner to nonprofit radio He is the chief whaler of whole whale, a digital agency that leverages data and tech to increase the impact of nonprofits and for benefit companies. He’s also a co founder of power poetry, the largest teen poetry platform in the US A safe creative free home to over 500,000 poets. George was chief technology officer of do something dot org. He managed the site overhaul twice. Winning a webby award and helped build a community of over a million and a half young people taking action. He’s an evangelist for democratized data and measuring success. The company is at whole whale dot com and at whole whale. Welcome chief whaler. How are you George
wow, incredible intro. Thank you so much. tony Thanks for having having me on [00:02:26.63] spk_1:
my pleasure, my pleasure. What’s what’s behind the company name? Whole whale which which leads you to be whole whaler. What’s that about? [00:03:23.44] spk_0:
Yeah, we found it a decade ago and at the time the thought that struck me was ultimately the way that the nan, you know the Nantucket whalers in the massachusetts whalers in the 18 fifties would look at a whale and they would basically bring back lamp oil and throw the rest away in times of abundance. We tend to be a touch wasteful instead of using everything from the bluebird of the bone. And I took that lens and said, I felt like many social impact organizations weren’t looking at the opportunity to leverage data and technology and the rising web in that way. And they simply said, hey, hey, here’s the internet and the most powerful tool we’ve ever been given. Let’s put a donate button on it and call it a day. And so I kind of gave rise to how we view this time of abundance with an eye toward the best ways of leveraging data intact to increase the impact. [00:03:57.64] spk_1:
Very interesting, very interesting. Uh you uh you drew that analogy between the two interesting. All right. Um, so are you the captain? Ahab, do you have a deep revenge? I’m trusting you know the story of Moby dick. Do you have anything deeply uh hurting you that you need revenge for? That’s going to drive the the ship of what was it the uh um The pick, watch the pick what it’s going to drive your whole whale peak watt into the ground. [00:04:11.14] spk_0:
I’ve got a few white whales. Maybe I chase, you know, I got a few white whales maybe that I chase. Yeah. The other reason I found it all whales. Because of the nautical puns. I mean, you’re virtually swimming in them anywhere you turn and with regard to the things that chase, you know, the nonprofit ad study is one, but we like we go after interesting projects along the way. In addition to our our day to day work as consultants. We also develop products and try to put things out there in the ecosystem that help others do their jobs better. Or learn more about whatever field they’re wandering and so I can get distracted by a white whale or two. [00:04:48.64] spk_1:
Okay, I see the navigate your helping folks navigate. Yes. The of course, the nautical you’re right. The uh nautical puns are are abundant. [00:04:52.84] spk_0:
Yeah, they have to be they have to be [00:05:05.44] spk_1:
navigate navigate the waters. All right. All right. So, we’ll see if your captain Ahab flush that out. See if you’ve hopefully you’re not going to do to uh to hold whale. What what the captain did too [00:05:07.82] spk_0:
Made it 10 years so far. But I think that’s mainly because of an amazing team that basically just puts me in the right direction. Okay. It’s [00:05:18.64] spk_1:
very gracious of you. All right. What is this this uh, nonprofit advertising benchmark study? What’s this thing all about? [00:06:18.54] spk_0:
We wanted to answer a simple question and you know, never underestimate the power of a simple question because it can lead to, you know, a lot of, you know, threads essentially how much should a nonprofit spend on ads? This idea of advertising and promotion, it’s available technically informed nine nineties and with the help of cause I. Q. Which is a, you know, been a great partner in this. We analyzed seven over 7000 organizations to get that answer. And we chose organizations with a number of filters because clearly, you know, there’s 1.8 million nonprofits out there depending on how you’re sort of measuring the five oh one C threes and they’re like, oh that’s too many. And also, uh, you know, a third of them are not necessarily even over the threshold for reporting to the I. R. S. So we wanted to find 1 to 10 million in revenue organizations between one Million and 10 million and also met other certain criteria. And then we just sort of just, we dove in headfirst to to answer that question, how much should non profit spend on paid ads. [00:06:36.34] spk_1:
Okay, so among your sample size of 7100 or so you you were you looked to see there’s I guess there’s a, there’s a line on the 9 90 that where folks where organizations report advertising expenses and that’s what, that’s what you were looking for, [00:07:08.64] spk_0:
correct. It’s, you know, publicly disclosed because that’s, you know, the game and we look at that. So, you know, there are certain assumptions there that, you know, we note in the study of what that line is and what it isn’t. So it isn’t necessarily saying All right, this is the amount that people spent just on facebook ads or google ads. It’s advertising and promotion of the organization. So, you know, that could extend to people Paying for print ads. It could even in some cases, but we filtered it out for the most part include the cost paid to advertising firms to run ads. Uh, though many according to, I think the analysis, we didn’t hear only about like five or 10% in that range actually incorporated in there. And those are the outliers. [00:07:43.14] spk_1:
Okay. Okay. And this specifically, thank you. Cause I was going to ask you about, you know, how, how we define advertising or how you define advertising this study and it specifically doesn’t include google ad grant money. Right? That’s, that’s different. [00:07:58.84] spk_0:
Super important. Thanks for bringing that up. And it’s one of those sort of, you know, expert pieces there that it’s an in kind amount that doesn’t get reported on that line. Right? The google ad grants and you 10-K per month in money spent is something that would show up on your in kind value, not actual dollars out the door. [00:09:03.04] spk_1:
Okay. Right. So it’s captured elsewhere. So it’s not part of the study here. Okay. Um, and so I was struck, you know, I’ve I’ve known that these that the vast majority of nonprofits are are smaller, you know, smaller revenue amounts. But I guess just reading it again, reminding me refreshing my recollection that uh, 93 a half percent of nonprofits are under $1 million dollars in revenue and and only 1.5% are over $10 million dollars in revenue. So that this this, you know, our universe of nonprofits, that this is not related to advertising, although, I mean, it is in terms of big words spend more on advertising, but that’s not my point. My point is just it just drives home that so many of our of our colleagues in nonprofits are organizations that are under $1 million dollars in revenue, 93 93 a half percent are under a million dollars, vast majority. Again. [00:10:11.74] spk_0:
Yeah. And it’s important to note that, you know, because I think maybe in our minds or because of the narratives, we see large organizations and assume that they’re all like multimillion dollar, but like, this is the truth of it and that’s Yeah, that 1.44, exact five oh one c three nonprofit organizations and, you know, there’s a very, very small fraction of them that kind of live above that line, You know, like roughly speaking the same is kind of true in business ecosystems as well. You know, it’s hard to get to a million dollars. You realize that. But also when you look at the market how, how much of a long tail there really is. And we wanted to sort of remove that and say like once an organization has kind of, I mean not saying you’ve made it, but you were in rarer air, certainly after crossing $1 million you were running something that certainly has enough residents to to reach that level. And then we also filtered by age to be like, well, wait a minute. Maybe they’re like one night, you know, overnight successes or pieces like that. So we looked at organizations over under this century funded founded in uh, and and took a look at that as well. But it is, it is a curious point. We wanted to start with that context because I don’t think it’s given enough in the sense of nonprofit industry and you like immediately sort of have this availability heuristic meaning like I remember the last thing I saw and either it’s the red cross or you know, you know, pets down the corner saving one pet at a time. [00:10:41.44] spk_1:
The availability heuristic. Thank you dropping that tech guy. You know, you have to, uh, well you, I’ll keep you out of jargon jail because you you explained it immediately [00:10:47.03] spk_0:
go to [00:10:51.64] spk_1:
The availability heuristic now it’s a good one. I love it. Uh huh. And you uh you flushed it out so folks understand what you’re talking about. [00:10:56.23] spk_0:
I still will probably end up in jail though, won’t you [00:11:10.64] spk_1:
didn’t do it? Well that could be we’ll see how we’ll see how the conversation goes. But you didn’t do it pretentious li like you know the all you would have available, all you, all you would have within your within your thinking at that point would be subject to the availability heuristic. [00:11:13.34] spk_0:
Yeah. And then just leave it. Didn’t just leave it [00:11:47.74] spk_1:
there and then make me ask and then make you flush it out. Which would have put you in jargon jail. So all right now because your availability heuristic. Thank you. This is a technology guy. Data data data guy, expect those things. I have a book like that. What’s that way out of this cool book from college. Alternative interpretations of data based conclusions. I think availability is in there. You know, uh confusing correlation and cause and effect. That’s a very common one. This is cool book. Can you show it to you [00:11:50.24] spk_0:
what’s strong? I like that [00:12:07.34] spk_1:
rival hypotheses. That’s what it is, rival hypothesis. Alternative interpretations of data basically. Okay, so enough pretense for now let’s talk about the study a little more. Yes. What stood out for you uh findings. What what what was most informative to you that and you think our listeners need to know? [00:13:12.84] spk_0:
Yeah. The top line, I feel like we have that that cliffhanger is like how much should number I would spend. It’s like how much should we spend already? What’s the number? So I felt like we owed it to the audience to give them a number with a lot of asterisks and the number which is the median spend for our sample was basically $12,070. Which roughly equated to 5% of the median revenue as a as a ratio. So you know, knowing nothing else turning off the podcast right now you’re like, all right, we should be like at least considering that. and 60% of This sample, 60% were actually spending on ads or spending on advertising and promotion. I’m going to use that interchange of advertising and promotion and add but advertising activities 60% did and 40% did. Not. That actually surprised me. I actually really believe that there would be a lot more organizations spending. So you know that that was a bit of a surprise to me. [00:13:16.87] spk_1:
Okay. Right. Not even not even 2/3 [00:13:20.04] spk_0:
are spot on your Yeah, exactly. Exactly on [00:13:22.59] spk_1:
Advertising. Okay. And the median spend is 12,000 between friends. We can around the 70 away. [00:13:29.35] spk_0:
So 12 spot me 70 12,000 [00:13:31.94] spk_1:
dollars. There you go. That’s that’s your [00:13:34.30] spk_0:
feet for being option. [00:13:48.14] spk_1:
Um uh And the average was, you know, it was interesting. The average was quite the average of like 4.2 million wasn’t the average was very highly skewed. Do you remember that? Right? It was it was something very huge. [00:14:37.04] spk_0:
Oh yeah. I mean you had to throw out the average because of these outliers. There’s like these massive positive outliers and there’s some nonprofits out there that are spending quite significantly. And you know, you sort of begin to touch on lobbying. There’s like um, you know, there was a pro life America group up there and the millions of dollars and you know, that’s that’s not data that necessarily is going to help you, right. If Bill Gates suddenly walked into your boardroom, you’d all be average billionaires. Not helpful. Right. That that kind of insight is not helpful. So that’s why we chose the median. I’m sure it’s in your book of trying to avoid those mistakes. And you know, we we went through and tried to explain why we chose the numbers we did and also give access to the full data dashboard if people are interested in it. [00:14:51.34] spk_1:
Alright, so, well, since you mentioned access to this, how do how do folks get the summary and I’ll be sure to say at the end, you can remind me if I don’t, how do you get the, get the, get the summary of the study. [00:14:55.14] spk_0:
So it’s at a whole whale dot com slash advertising tried to make it pretty simple. We have a nice infographic there and the ability to download the entire report. [00:15:05.74] spk_1:
Okay. And there’s a little fee there’s a $5 fee if you want if you want [00:15:08.89] spk_0:
All this. So yeah the full data and dashboard if you want to go digging into it. Um and getting access to that. Yeah that’s the $5 fee. But you get the whole study which is you know 21, pages of awesome. That’s you know that’s available [00:17:05.14] spk_1:
right? That’s free. That’s absolutely free. Okay. Hold well dot com slash advertising it’s time for a break. Turn to communications. Are you making your plans for 2022 for fundraising? Marketing communications. Do you need help Look at turn two? If you’re like if you’re thinking about fundraising you need to raise more money in 2022 marketing and communications. Your content, the stuff that goes out all that that you’re creating for your donors for general awareness. If you need help with it, think about turn to because that’s what they do. They have a background in non profits. They understand the nonprofit community so you’re not you’re not hiring an agency that only works with you know cos they understand the nonprofit space. They can help you develop your content, help you hone those messages, Get those messages out like you’ve been hearing me talk about, right? So if you need to raise more money or if you need to go to the next level in marketing communications In 2022, think about turn to because your story is their mission turn hyphen two dot C o Now back to how much to spend on ads in 2022. uh, the, the 80 20 rule applies here is one of your, One of your takeaways that uh, the top 20% spend about 80% of the ad revenue. Yeah. [00:17:06.54] spk_0:
It always seems to happen and I always seem surprised when I find that power law, right? The 80 20 shows up on like [00:17:21.64] spk_1:
how again does it keep happening time after time after time for in a wide variety of applications, 80 20 applies. How is our world, [00:17:57.74] spk_0:
especially in actually, especially in financial distribution. But I was actually, I did the analysis. I was like, it probably won’t in this case show and I was like, you gotta be kidding me. So it wasn’t exactly 80 20 it was 24 76. So that’s about 24% spent 80% of that ad spend coming back to your point on average is being like much higher than in a potential bit misleading. So you do have that handful of organization spending quite a bit and the top 13 organizations in our study spent over a million dollars. So you kind of see that heavy, heavy waiting. And if it’s like, all right, you know, the purpose of our organization is the public awareness of this particular issue. And the way we do it is just turned donations into advertising and they’re nonprofits that just do that And they skirt the line awful close to lobbying, but they stay this side of fair. [00:19:23.04] spk_1:
Okay. All right. Um, and you know, it occurs to me to this is, um, you know, you’re stuck with a lackluster host who is, whose thinking is not, uh, completely linear at all times, uh, if ever on that. But, uh, this is not, this is not a survey. So we’re not, we don’t have biases across people giving what they think is a good answer. You know, we don’t have those. So that just goes back to my book, the rival hypotheses, you know, self reports, not self reported data. Um, you do have the problem, like you said, you had to correct for whether people use agencies to produce their ads, but you were able to sort that out. So there’s, there’s some potential differentiation in, in the way people report organizations report advertising on their 9 90. But overall this is more reliable than survey data. [00:20:13.84] spk_0:
Yeah. And I’m glad you brought that up. This is, you know, reported. So, I mean if you get back down to it, Yes, there is a human somewhere in the financial department of this non profit making that decision, but they’re doing that at a very macro stage and we’re pulling raw data were not wandering in and saying, Hey, how much do you spend on ads and you know, looking at, You know, 250 random nonprofits that decided to randomly fill out a survey with limiting information or you know, not being wanted to be fully transparent for whatever reasons. This is you know, this is source data from the organization according to the I. R. S aggregated by cause I. Q. And then we analyzed it to really find those answers and it’s something that we just felt was lacking. We felt like there was a lot of uh, we’ll call it a qualitative As opposed to quantitative type of research out there being like, Oh, here’s the official number. And then you look at the fine print and realize it was the opinion of 60 people not problems. And I’m like, I don’t know [00:20:33.14] spk_1:
a lot of the answer. A lot of times people say, well it depends, it depends. So you’ve drilled down more than it depends. [00:20:58.94] spk_0:
We’ve drilled down more and also been able to look at individual cause areas. So not just lumping one of my, one of my watchwords is being careful of lumping together the entire industry into one tidy bucket and assuming they all behave the same way. And if you know one nonprofit, you know one non profit and so we actually have, you know, in one of our findings divided up The type and cause focus of the organization to kind of get a better idea in that distribution, which tells, you know, another different story, which is all the more to say. I, I hesitated but knew we dessert we we owed the audience an answer of $12,000. But even that can be misleading depending on the industry and sub industry weren’t [00:21:34.94] spk_1:
well, like arts organizations for instance, spend the most right. That’s what you’re, you’re, you’re teasing us a little bit. But I don’t do that to nonprofit radio listeners. You can, you can attempt it, but I won’t allow it. So, uh, let’s, uh, so arts organizations spend the most on advertising, right? [00:22:15.54] spk_0:
Organizations were the highest spender. Again, surprising to me because I actually thought it would be health, I thought would be the health industry spending, you know, more to research awareness and pieces like that. But you know, frankly at the end of the day, you need to get people to attend to show up to, you know, go to these, you know, one time events to museums on location and so these, these were the highest highest spenders for sure. And promoters of performing arts sports and similar events were at the top and then the lowest, you know, because you look at the high and low, we’re less surprisingly the grantmakers and giving services like if you’re giving grants, guess what people find Jack, If you’re writing checks, people, people [00:22:42.04] spk_1:
find you events, you, you you, you teased out what ad spending does too event income and I’ll let you, I’ll let you reveal what was found. [00:22:46.44] spk_0:
Yeah, this is a bit of a nothing burger on the face of it because I had, here’s a case where I went in with maybe a touch of an agenda. I had an agenda. I’m going to admit it that I thought if a nonprofit was spending research, going [00:23:03.00] spk_1:
back to my book, researcher bias. [00:23:38.74] spk_0:
Yeah, this was researcher bias. But I left it in because I was so surprised that the ad spend of a nonprofit did not correlate. Uh, mind you even causation that didn’t even correlate in any meaningful way to hire event income. So event income is another thing technically reported by non profits in the 990 that you can pull aggregate and analyze. I’ll put an asterisk there, there are problems with that reporting which may be impacted this. But ultimately there was no correlation at all with this idea that or eggs without ads and with ads had any meaningful difference in the amount raised with event fundraising. [00:23:56.54] spk_1:
Okay, Alright. Clearly you had, you had a hypothesis because that’s why you pulled the event income Data off the 1990s. [00:25:03.44] spk_0:
Yeah. I mean, my hope was to show like I had, I had to hope that we would show that guess what if you’re spending to promote your event, your event does better And therefore an aggregate. They should be the folks that are making more money, you know, when in fact, you know, the of our, I can give some context with the data size. Uh, about 68% of our group had listed event fundraising expenses and 58% of that group reporting event fundraising revenue from their form nine nineties. So right in there, you’re like, wait a minute. They didn’t all make money, nope, just events that happened. Right? So I think it’s important. Not all events have maybe the purpose of fundraising, but that’s where they get listed. There’s also the question of in the accounting department, did that gift of $100,000 that came in five days after the event? Did that go to the capital campaign or did that go to the fundraising event? There’s a lot of mushiness there. So, you know, I’ll blame it on the data, but I wanted to report it because it was something that sort of keep us honest moment. [00:25:09.32] spk_1:
Yeah. Okay. But it’s valid. You reported as a finding. So [00:25:13.12] spk_0:
like we. Did you believe it? Believe it. Ok. [00:27:30.84] spk_1:
It’s time for Tony’s take two. It’s the holidays and it’s the fourth quarter. The holidays. I hope you enjoyed your thanksgiving time with family, friends. Time for yourself. These things are important. You’ve got to take time to rejuvenate yourself to relax however you you know what’s best for you, however you do that for yourself. However you relax. It might be some people, some people relax by, you know, adrenaline rushes and uh, you know, zip cordon however you relax. I hope you did it over thanksgiving and I hope you will continue it throughout the holiday season. We’re in the midst of Hanukkah right now christmas coming up whatever your holiday is. I hope that you will be good to yourself as well as of course your family, loved ones and friends that you’re getting together with and it is the fourth quarter. So there’s a lot of pressure. I know vast amounts of, of fundraising revenue come in, not only the fourth quarter, but even in just in december. I know. So I know you’ve got those pressures. What am I talking about? Balance, balance, take care of yourself so you can take care of your non profit Please do both please for the holiday season this year. That is Tony’s take two. We’ve got boo koo but loads more time for How much to spend on ads in 2022, the older organizations, older organizations spend more then then I’m sorry older organizations spend, uh, less likely to spend. I was thinking of larger. I was thinking of size, not age, older organizations spend less. That that seems to make sense. There are, when we presume that older organizations have have greater, uh market awareness because they’ve been around longer. [00:27:59.74] spk_0:
I guess the, I love this take away, this was actually, I have to give credit to Kobe on our team who ran the ranch and manage this analysis. He just, he was like, I would love to look at the date funded because the underlying hypothesis here is that older organizations that were incubated and created in a time frankly pre web 12. Oh, would see less value in their operating less value in paying to play in creating ads and creating advertising. Oh, that’s [00:28:14.34] spk_1:
the hypo that you think that’s the car. They haven’t adapted to our digital ad environment. [00:28:15.80] spk_0:
I mean it’s, we call the rising generation digital natives. Right? How much time do you spend on Tiktok? Like there’s, I think there’s a fundamental reality. [00:28:24.88] spk_1:
I’ve never, I’ve never been there. But they can hire people, I don’t need, I can hire somebody to do Tiktok for me to watch you George. That’s so cynical about older organizations. But let’s all right. [00:28:40.44] spk_0:
You’re right. Let’s, can we, we can tell them the numbers though. It wasn’t that massively off. I will always say that. Um, the, [00:28:41.84] spk_1:
alright, let’s start with, what’s an older organization. How did you, how did you group or cluster or how did you define age? [00:28:48.66] spk_0:
How did I unfairly categorize this poor lined group of nickel. They [00:29:03.74] spk_1:
Are capable of even hiring people to do something post 1950. I mean these these folks are still watching black and white television and some of them are still listening to silent movies in your mind. [00:29:07.04] spk_0:
Uh, that side, the set with this century. So it’s over under year 2000, which I thought was an interesting inflection point and also it’s nice and round. So [00:29:17.86] spk_1:
There’s a whole bunch of before 2000. Okay. [00:30:20.54] spk_0:
Oh yeah, no, no, I think That, I mean it’s a long swath of time to look at and you know, the difference is really that this uh in last century 41% had no ads versus in this century 37%. So you know, 4% points total difference in just the binary decision. Should we have that ads, advertising and promotion? Um and then the median spend of this century was not that much higher, but it’s about 400 ISH, $400 higher uh simply by nothing else controlling for everything else, right? Like nothing else. You just, you’re just going to spend a little bit more if you are going to spend and you’re more likely to be spending on that. So it wasn’t mine, I kind of wish there was a bigger differential. So it’s actually much tighter than, and I have to, I have to say the counter narrative here is that do something dot org, one of my alma mater’s uh what Founded in 1993 and still had a well well above average as fund. So they are like the outlier that I didn’t even have to take that long to find. [00:30:38.34] spk_1:
It’s impressive that you were the chief technology officer and do something that’s uh that’s a, that’s quite a renowned organization for What, what’s their sweet spot, 14-17 or 14-18 or 14-20 year olds taking, taking action and all the data that you gathered from them. That’s uh that’s quite a, that’s quite a job to have had. It’s impressive. [00:31:17.44] spk_0:
It was an interesting time to have that role. I’ll say that for sure because there was a lot of, you know, a lot of tech being just sort of introduced web to, oh, just becoming of age, you know, you look at facebook pages and that existing for the first time in that period of time being like, what do we do with this now? I don’t know, what do we do? Like there was a lot of like, have you used this thing, you’re like, oh God, what is this thing now that I have to go figure out and then building our own platform as well and then sort of, you know, data privacy and protection and jumping in? I’d say the biggest piece we figured out was SMS in that period of time, the power of text messaging, which is still, you know, widely under appreciated, I’d say in the social impact sector. I do take, you know, huge nod of the hat to twilio dot org and what they’re doing out there, but it’s a, you know, it was an interesting time to be the cto [00:31:49.34] spk_1:
and what was the the prime age group for? Do something? I was trying to guess, I was like 14 to 18 or something. Yeah, it’s [00:32:15.14] spk_0:
extended, you know, I think they would extend it to through college age, but there’s like different sort of calls to action along the way. While I was there, we were predominantly focused on teens and tweens and that sort of intro level to volunteerism and engagement to foster a lifetime of social engagement. And and since then they’ve really evolved because guess what? You know, if you know, if you have half a million people that are of this age, it’s silly to say like, all right, goodbye, Good luck. I’m like, yeah, we can still provide services. We can still provide ways for them to engage. So it’s kind of an interesting quandary. I think for a lot of youth focused organizations to be like, where do you draw that line? [00:32:53.54] spk_1:
Well, and because eventually those folks are gonna turn over 45 and then they’re just gonna be dinosaurs. Like like you hypothesized about the older organizations so you better get all the data you can now or you know, do something better because once, they once they turned 45, I mean they’re practically dead and they can’t adapt. Their their minds [00:32:55.86] spk_0:
are impossible. [00:32:57.15] spk_1:
Yeah. Their brains are neck roast it. [00:32:59.63] spk_0:
Well actually, no, not completely, but maybe 4% more of them. Like 4% points. four [00:33:04.59] spk_1:
percent. Alright. Yeah. Good. Thank you for bringing us back to the survey study. So we’re not a servant to the study, definitely [00:33:11.63] spk_0:
stepped in it. I’m sorry. [00:33:22.84] spk_1:
So uh let’s talk about what I what I had confused with that larger larger organizations. What did you find out about that? That’s that’s it. [00:34:56.04] spk_0:
Well, I think the interesting thing is not that hey, surprise larger people with more money, spend more money. This just in from things you probably already knew uh is that it’s the same ratio. So that sort of golden ratio of 5% of revenue just paired out for small and large organizations. My assumption there that I went in there with a sort of hypothesis was that The smaller organizations would probably disproportionately spend at a higher ratio, but it didn’t turn out to be true. So in fact, that sort of 5% of revenue held across large and small organizations, albeit yeah, large organizations spent more. So if you do like if you just take away a quick thing, you could accidentally assume that oh, large organizations got big by spending more. You’re like, well no, they’re larger and they still spend at that ratio, which is in and of itself interesting because it is a much bigger number. And between those two groups where we divided it between large and small, which was over under I should note small organizations being 125 million. So small and 5 to 10 million. So we just basically through the line down the middle and it just equated to the large organizations had a median those three X. In terms of revenue three X. The amount that the 1 to 5 did and that was the same ratio three X more in ad spend. So you know, if you were doing lazy reporting, you say like large organizations spend three times the amount you’re like, Yeah, but that’s just a symptom of numbers. Okay, okay. [00:35:04.24] spk_1:
And employees, you also, you also tracked the number of full time employees at, at organizations. [00:35:06.54] spk_0:
Yeah, this was a bear. Would [00:35:08.42] spk_1:
you find related to? Why is it a bear? [00:35:17.44] spk_0:
It was a bear. It was just really difficult to do to like segment based on, you know how many employees and they’re simple. [00:35:18.71] spk_1:
Isn’t there a simple question on the 9 90 I’m not an accountant. So I don’t [00:36:07.13] spk_0:
know the total number of employees is technically available. So we were able to grab that number and then parse it out. It’s just parsing it between under 55 to 9, 10 to 14 employees, 15 to 19 employees. Uh and sort of scaling that up. The biggest jump happens really from, you know, organizations with less than five employees just aren’t really spending on ads. And the hot take there is that, you know, surprise, it takes people to run the ads running ads and promotions takes dedicated, you know, person or part of a person to truly run. And then as you sort of scale up, you have like random ebbs and flows, but the biggest jump really is that like if you have an organization with under five people, um, they’re really, they’re nowhere near that median ad spend because they come in at like uh 500 bucks versus immediately get to $2000. Um, once you get 5 to 9 and then the next biggest jump, you know, happens once you’re over 24 people, just larger organizations [00:36:42.33] spk_1:
acquaintance with what goes into this, what why it takes you just said it takes a person or at least a part of a person for organizations that aren’t doing this for the, for the, Well for the 60% that that aren’t spending, what what did they have to devote time to? [00:36:47.93] spk_0:
It is the most valuable asset of nonprofit has its not the revenue, it’s the time of the people working and to run an ad on facebook to place an ad in the paper. Let’s say if you’re running to place an ad on this very podcast, it takes time for someone to email setup, established the price, manage and test the R. O. I. [00:37:34.53] spk_1:
It’s not create uh an obstacle where it doesn’t exist. All you have to do is email tony at tony-martignetti dot com. If you want to be a sponsor of nonprofit radio it’s quite a fluid process. George’s referring to George is referring to a university is not that well acquainted with right. This study is not on podcasting advertising When, when he does that one. I hope I will be a part of it. But uh, the, the, I don’t know about the podcasting universe, but if you want to be a sponsor of nonprofit radio it’s a very fluid, easy process. You’re talking directly to the host of the ceo. Just [00:37:44.47] spk_0:
email you, do it right now. We can do it right now. [00:38:00.62] spk_1:
Yes, you can do it right now. Whole whale. If whole whale was a sponsor, you would know how fluid and simple it is. But you haven’t taken, you haven’t taken that leap. So all right, let’s not go outside the bounds of the study as we’re, as we’re trying to draw conclusions. So [00:38:16.22] spk_0:
We take, you know, we sort of take it as sort of maybe a core number that, Oh, you know, we can spend $12,000. A median number, but it doesn’t happen by itself. I mean, nothing simply does. So that that type of ad management was in the back of our mind saying like, you know, you have to track the R. O. Y. You have to create the report for the boss. You have to set up the landing page or whatever it may be that you’re running ads for. It’s not just as simple as saying like, oh cool, no problem. You know, through your credit card over there and you know, let it run. So that’s the thought that it takes labor to implement ads [00:38:39.72] spk_1:
and your study makes the point that even if you’re hiring someone to do the ads for you. You need someone to oversee the work of the consultant or the firm. [00:39:07.32] spk_0:
Yeah, I mean the numbers bear out that, you know, it definitely tracks as you go up in a number of employees, um that you’re, you’re able to see a higher spend. Now. That’s also corollary to the amount of revenue. But we also show that along the way, which, you know, incrementally increases but doesn’t necessarily follow along with the differences that you see. So, you know, I don’t purport that this study will show you how to set up your advertising department. But it will tell you that you can’t assume this thing happens in a vacuum and without labor. [00:40:03.11] spk_1:
Yes. Okay. Well, and you’re a digital uh, advertising agency in at least in part, how much of a full time employee would you do you estimate it would take for? Well, it doesn’t really well for a smaller organization, let’s say they let’s say someone has just 10 employees or fewer like what, how many, what percentage of a full time employees time would that size organization Spending on ads if they were gonna move themselves from the 60% that don’t advertise at all to the 40% that do [00:40:20.81] spk_0:
an interesting framing there. If you had 10 employees according to a study, you’d have an average revenue of roughly call it 2.3 million your median ad spend for that cluster would be $2100 and You know, oh, that doesn’t require a full time employee. But it’s gonna take about, you know, 2100 [00:40:28.61] spk_1:
That’s in a year. That’s 2100 a year. Yeah. So you’re just spending a little under $200 a month. [00:40:40.21] spk_0:
I mean, Yeah, I mean and and and 2000. Yeah, [00:40:42.12] spk_1:
22,000, exactly. 200 a month will be 2400 a year. So you’re saying 2100. So [00:41:49.21] spk_0:
Yeah. So for that number that’s, that’s easily managed in 10% of somebody’s time depending on the type of Advertising activity that you’re doing. The hope is that that allows you enough to test where there’s value and increase that number, ads can be spent for a number of different reasons. And this is getting back to maybe why my assumption on fundraising was so flawed is ads may be spent to spread awareness of a topic a theme to increase public awareness. I don’t know for vaccines for health research, it’s not necessarily direct 1-1 ratio with fundraising. However, and if you are able and you are trying to turn one ad dollar into two donated dollars and you figure out a way to do that. It’s the hope that spending that and having somebody paying attention to it may figure out a way to get a bit of a little bit of a money engine going for you, spending adds to increase donations to the organization. And that Is a hope of this study. It is a hope that you’re saying, you know what it is worth, frankly 20% of someone’s time to play around with some amount of money that would let us learn and then do more of what works. [00:42:29.30] spk_1:
Okay. Okay. That’s a pretty good wrap up actually. But I’ll give you a chance to to make it official because we’ve, you’ve covered all your explicit findings in the, in the study which folks can get at whole whale dot com slash advertising very appropriately named simple. Uh, simple U. R. L. Whole whale dot com slash advertising. What would you like to leave folks with George? [00:42:33.10] spk_0:
I think that point lands hopefully. Well, and I haven’t offended any older organizations out there from which only only older, [00:42:41.44] spk_1:
only older people. You haven’t offended any organization, not just the older people [00:42:45.18] spk_0:
For 4% of them. Right. [00:42:48.60] spk_1:
Well, that was, that was a differential, but it seemed [00:42:51.50] spk_0:
Like it was 100% of those people were offended before. [00:42:56.31] spk_1:
No, no, no, no. The way you did it, it was, it was wider. [00:42:59.55] spk_0:
It was [00:43:00.19] spk_1:
good [00:43:00.78] spk_0:
differential. I [00:43:07.30] spk_1:
understand the differential was 4%. You didn’t offend only 4% of People over 45. Now you offended most of us. [00:44:35.79] spk_0:
That’s, that’s pretty good. Well, I’ll be joining you shortly so I can, I can join in the offending club. I uh, I will say that there is a lot to, to dig into here, but it is really meant to be an asset for anyone making the case in an organization to say, Hey, why don’t we try this? Why don’t we try to spend? It seems like our counterparts that are in this field are doing so in learning and so if you’re not spending, you’re not learning. And when I look at platforms, social platforms, that purport to be, you know, ways for you to get this organic traffic that will magically come to your site. So if you are posting, for example, on facebook, on instagram, frankly on most social platforms, you are losing money because the platform truly for for non profits for companies. Social media platforms are advertising platforms first and social platforms. Second, one more time. If you are a company, if you are a non profit Social Media is an advertising platform 1st And in an organic social network. 2nd, possibly distant second. Depending on which one we’re talking about. And so it’s like sending somebody in your communications remarketing department to work without a computer by not saying, hey, here’s a bit add money to play with and learn what might be possible for us. So that’s, that’s the thought I want to leave you with. I think. [00:45:10.89] spk_1:
All right and not just me. All our listeners. Thank you. He’s George wegner He’s the chief. Well, at whole whale, whole whale dot com hotmail dot com slash advertising for the nonprofit advertising benchmark study. If you’re on twitter there at whole whale, thank you, George. Terrific. Thanks for sharing and thanks for being a good sport captain. Ahab. Mhm. [00:45:11.69] spk_0:
Thanks Tony. Thanks for having us [00:45:42.49] spk_1:
next week purpose driven marketing. If you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. And let me remind you how simple it is to be a nonprofit radio sponsor. Just email, tony up, tony-martignetti dot com. Our creative producer is Claire Meyerhoff [00:45:57.79] spk_2:
shows social media is by Susan Chavez. Marc Silverman is our web guy and this music is by scott stein, thank you for that. Affirmation Scotty be with me next week for nonprofit radio big nonprofit [00:46:15.59] spk_1:
ideas for the However, go out and be great.