Sunday, September 26, 2010

How much should you be spending?

Your marketing strategy?
Here’s an question sure to start an argument at your Non-Profit. Gather people around and innocently ask them what their organization should be spending on marketing and communications next year. Then stand back and wait for the fireworks to begin.

In and out of your organization there are those who believe that spending at a Non-Profit, and especially a charity, should be on services. The idea of spending on marketing offends them. Then there are those who believe that while marketing and communications is important, it should be held to the bare minimum. For them, this function has limited value. This is partly due to the fact that many of them don’t understand it and partly because they have seen such terrible marketing efforts in the past that they have very low expectations. And finally, there are those who understand marketing and want to use it, but can’t find the money to do it properly (mostly because of the others mentioned above).

Now, some sobering statistics to add fuel to the fire. According to a 2008 study by the American Marketing Association and Lipman Hearne, most Non-Profits with budgets under $5 million spent less than $50,000 on marketing and communications. And of those with operating budgets between $5 million and $20 million a third still spent less than $50,000. The study concluded that half of those Non-Profits polled had less than $100,000 in their marketing budgets.

While the study found that overall marketing budgets were typically 2% to 3% of the organization’s overall operating budget there was in fact great variation in spending. For example, more than half of Non-Profits in social service, health and advocacy with operating budgets between $5 million and $20 million had marketing budgets under 1%. And a third of those under $5 million in operating spending had marketing budgets of between 5% and 7%. In short, the averages didn’t tell the story. Non-Profit marketing spending is all over the map.

It would be nice to find a benchmark for your organization. For example, in some retail markets there are very reliable figures. A marketing budget of 10% of sales is not uncommon. Benchmarks for Non-Profit marketing aren’t exactly reliable. For example, I’ve seen some in the hospital field and they were useless.

So where does that leave your Non-Profit?

Here’s how you should do it. For lack of a better number, start at the 2%-3% level. Then, think about what that gives you. For example, on an operating budget of $150,000 that’ll give you a marketing program of between $3,000 and $4,500. You don’t have to be a rocket scientist to know that kind of spending doesn’t amount to much. An ad, a mailing, a new website, some signs and the budget is gone. However, if your operating budget is $1,000,000, your marketing program would be between $20,000 and $30,000. That is more manageable.

Now, add a new level to your marketing budget deliberation – value. Ask yourself what you’re actually getting for that spending. Is it enough to get the job done? With the $150,000 example above, the answer is obviously “no”. If you answer in the negative, follow up by asking what would it take to get to where you want to be. This will make you think critically about what kinds of marketing you need and how to get them. Don’t be afraid to spend more than 3% if it will give the value you want. But of course, the more you spend, the more of a target your marketing budget will be for those who “poo poo” on all marketing and communications. Be prepared to justify yourself.

One thing that will help you in all of this is adequate metrics. Your deliberations about value won’t mean anything if you don’t know what exactly it will give you. More on that in future blogs.

At the end of the day, you need to be flexible. Marketing is an investment. Some years, you will need more, others less. Keep your eyes on the prize, not the costs!

Wednesday, September 22, 2010

Mobile Marketing is more closer than you think

Is this the next big thing?
Most of us old geezers have only now begun to feel comfortable with things like Facebook. It wasn’t that long ago that I signed up for Facebook. Now, everybody is using it. It reminds me of the first Internet page I saw and my first email. Yes, I’m that old.

But if you think the world is going to slow down long enough to let you catch your breath on new technology than you are sadly mistaken. While you’re still trying to figure out what a tweet is, the earth is moving under your feet. Welcome to the next big revolution – mobile technology.

Simply put, your entire world is moving into the palm of your hand. You may not know it yet, but it’s already arrived. Not too far into the future, everything that you do will be through a wireless device that you take with you wherever you go. Watching TV or movies, talking to friends, being part of a social media circle, playing games, learning new things, paying your bills, buying and selling – all of these things will all be done through your mobile device.

The statistics show that today’s mobile devices (many of them still just unsophisticated cell phones) are already changing the landscape.. Four out of five Americans now have a cell phone, Blackberry, iPhone or other device that is also a cell phone. According to the Pew Research Center’s Internet & American Life Project, texting is one of the fastest growing methods of communicating. Texting by adults has increased over the past 9 months from 65% in September 2009 to 72% in May 2010. Adults who text typically send and receive an average of 10 texts a day. Compare that to cell phone use. The average adult cell phone owner makes and receives around 5 voice calls a day.

If you think that is interesting, think on this. Teens who text send and receive an averageof 50 texts per day. Pew says the mobile phone has become the “favored communication hub” for the majority of American teens. Some 75% of 12-17 year-olds now own cell phones, up from 45% in 2004. Fully 72% of all teens are text-messagers. That is a sharp rise from the 51% of teens who were texters in 2006. More than half of teens are daily texters. One in three teens sends more than 100 text messages a day.

Interestingly enough, calling is still an important function of the cell phone for teens, but for most use the phone part of their mobile device as the primary mode of conversing with parents, not each other. Girls also used the cell-phone and all its functions more than boys.

Having a mobile device isn’t just for the young. Pew found that one of the main triggers for adult use is having children. Parents with children under 18 in the home are more likely to own a cell phone than non-parents, and more likely to make 5 or more calls per day than non-parents though they do not text more overall.

All this means that Non-Profit marketing just got harder. It means that more and more people, especially young people, are spending more time texting than going to your website, opening your email or reading your print newsletter.

And worse, most mobile devices are harder to market to. The arrival of anti-spam laws in Canada coupled with our already tight privacy legislation means that mobile marketing is more permission-based than many other mediums. In other words, they really need to want your marketing message before you send it. Not only that, but Pew found that people who use mobile devices think differently about them than other things like email. Two in five cell-owners say they feel irritated when a call or text interrupts them. Nearly two-thirds of adults with cell phones say they have received unwanted or spam text messages on their phone, which I suspect is more perception than reality.

So, in your next Non-Profit marketing plan include a section on mobile devices. The time may not be right yet to make your own smart phone app or run a text-based promotion, but that day is coming. You need to be ready for it. Start by taking a hard look at your web infrastructure and email offerings. Make sure they can be accessed by mobile devices easily. For example, a lot of websites that use Flash (the stuff that makes images move on a website) have a tough time working on mobile devices. They take too long to load. Also, try asking your clients what mobile technology they use. Get some early data on usage from the people who give, support or use your Non-Profit services right now.

Tuesday, September 7, 2010

What really happens at the ad agency

Here's a little humour about ad agencies and Non-Profits.

See my video "Cool"

I was in advertising once, and while this is a bit over the top it isn't too far from the truth. Don't buy cool. Buy experience with Non-Profits. Buy strategy. Then, get cool. Enoy!

Sunday, September 5, 2010

Give them what they want

Old Spice YouTube campaign
What is the secret of marketing? We all marvel at the ultra cool things happening in marketing – the “why didn’t I think of that?” stuff. Likely, you can remember one or two ad campaigns that really stuck with you. When I was a kid, the biggie were Coke commercials, such as “I want to teach the world to sing”. More recently, I’ve laughed at the Old Spice YouTube campaign. How do they do that? And can we do that at a Non-Profit?

The challenges are obvious. Most Non-Profits don’t have a huge ad agency. They don’t have a huge marketing budget. In fact, for most Non-Profits, they don’t have much of anything at all. Then there’s the obvious – where do they start? Even if they had bags of cash lying around the office (which I hope you have declared to Revenue Canada), how do they make this stuff?

The answer is complicated. And frankly, many of my contemporaries in marketing seem to make it so. Forget the theories, the cool tools and the million dollar buzz terms. Use this simple mantra instead.

Give people what they want.

I want to teach the world to sing
You can never go wrong by asking your target audience what they want from you and then delivering it in a way they find valuable. This is a lot tougher than it sounds.

First, it means you have to change your frame of reference from what you and your Non-Profit can offer your audience and instead start thinking about what your audience wants from you. That means asking them. A lot of them.

Then, you need to figure out how to give it to them. It might mean changing the way you do things. It might mean junking some of the concepts you take for granted. It will involve trial and error. And don’t think of this as mere window-dressing. When you give these people what they want, you’ll have to put your whole organization into it.

That being said, the results can be transformative and trend-setting. When I worked for a hospital foundation I never really thought I was really connecting to our donors until the day I convinced everyone to start an email newsletter by asking our audience what they wanted from us. Turns out they didn’t want the usual stuff we pumped out about the latest big gifts or the boring column from the Foundation CEO. Donors said they wanted health information – research, new services, and the latest health news. I realized that we had struck a nerve.

You can do the same.

Start by asking some of your stakeholders what they want from you and see where it leads you. You might be pleasantly surprised with the results.