Finding Your Direct-Mail Donors — Online

We all want to be able to interact with donors across multiple channels — send a direct-mail piece and then remind donors when they are visiting a news site online to renew or make a year-end gift … If only … sigh.

From reading our column on retargeting, you already know all about using cookies and pixels to “follow” online prospects and donors after they visit your site — easy peasy.

But most of the donors in our databases were acquired offline — through direct mail, events or other means. How do we target them with relevant online display ads to encourage them to take action online? Or donate online or offline? Magic? No … through direct-response, cookie-based targeting.

But what is it? And how does it work?
Cookie-based targeting enables marketers to target people in their offline databases (e.g., current and lapsed donors) with online display ads across relevant sites. Companies that offer this service match the physical addresses of your donors and prospects to cookies, using personally identifiable information data, following regulations set forth by the online advertising industry.

Match rates typically exceed 75 percent with the ability to find upward of 40 percent of donors actively engaged online for a given campaign period. After the offline addresses are matched to cookies, the companies then serve up online display ads to these people on various sites as they navigate the Web. The sites are typically determined based on performance — e.g., relevancy, frequency caps, inventory availability and the cost of display ads on the site.

So, imagine sending your first renewal notice and being able to echo that messaging online when your donors visit Huffington Post, play Words With Friends or search for new pie recipes.

But does it work for nonprofits? We have seen a number of examples with varying results, but most have positive ROI, especially when used for existing donor files (as opposed to acquisition).

For example, we spoke with Michal Heiplik, who heads the Contributor Development Partnership (CDP), a group that serves more than 100 public broadcasting stations with data, analysis and multi-station services. CDP ran a pilot from September 2013 to December 2013 with Blackbaud’s online targeting product, Connection360, across six major public broadcasting stations — WGBH (Boston), TPT (Twin Cities, Minnesota), KQED (San Francisco), KPBS (San Diego), WMVS (Milwaukee) and RMPBS (Denver).

The goal of the CDP pilot was to complement direct-mail campaigns from these stations with online display ads in order to lift overall campaign response rates and donations. Stations targeted both current and lapsed donors. The display ad creative for each station was designed to reflect the mail piece (especially the envelope) — and several different sizes and types of ads were tested for each station.

The results of the pilot were compelling — at least at first blush. Stations raised almost $400,000 more on an advertising spend of $64,000 for a ROI of more than 6 to 1! The return was based on a 19 percent increase in number of gifts. We note that we are not fully satisfied with the control for this test. Due in part to sample size limitations, the control population was set up as those with a cookie that did not receive ad impressions, while the test population consisted of those with a cookie that successfully received ad impressions. Fortunately, the control population was verified to match the test population on key demographics. (Hint: an opportunity for you to ensure a purer test vs. control population when you try direct-response, cookie-based targeting.)

Takeaways to consider
Even so, we like where this is headed. Here are some other takeaways from the test:

• While every station had a positive ROI of at least 3.5 to 1, there was a large variance by station. This reflects the fact that a large sample size of records (e.g., north of 500,000) is required for trying IP targeting.
• Most of the return came in the form of online ads lifting the response rates to other channels, most notably mail. For example, online display ads serve more as a passive reminder or nudge to donate elsewhere rather than as a direct-response channel themselves.
• The average household was served 25 ad impressions over the four-month test, and CDP received no reports from stations of complaints. This suggests that this form of marketing is unlikely to generate blowback for your nonprofit.
• CDP reports that this program can become easy to use. Once it is set up, the program runs on its own.
• While Facebook ads were not part of this test, Facebook now provides this capability as well through its Custom Audiences as we discussed in a recent article. Test those out, too.

Will direct-response, cookie-based targeting work for you? There’s only one way to find out — test it! And make sure you have a sufficient sample size of records to pursue first.

We would love to hear of any examples where nonprofits tested targeting nondonor supporters (e.g., e-newsletter subscribers, event attendees and other warm prospects). Please let us know of your experiences with cookie-based targeting. Email Karin at kkirchoff@mindsetdirect.com or Jeff at Jregen@weta.org

(With special thanks to Michal Heiplik at the Contributor Development Partnership, David Preston of TPT and Jay Janszen of Blackbaud for their invaluable insights in writing this column.)

Karin Kirchoff is vice president at MINDset Direct. Reach her at kkirchoff@mindsetdirect.com. Jeff Regen is vice president of development at WETA TV 26 and Classical WETA 90.9 FM. reach him at jregen@weta.org