How Nonprofits Can Profit from DRTV


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By Ronald C. Pruett, Jr, CEO, Mercury Media

Every business has two elements, the tangibles and the intangibles. Tangibles are concrete – the way a product tastes, the way it works, or the value it brings you and your family. Intangibles are rooted in emotion – the way a product or service makes you feel about yourself or the image it conveys to others.  One of the great things about direct response advertising is that it closes the gap between the tangibles and the intangibles. Direct response is centered on enhancing a product or service’s tangible offerings and making its intangible offerings more concrete by making them actionable.

For this reason, I think direct response can be an excellent tool for the struggling nonprofit segment. Nonprofits live on the intangibles. After a person donates money to a cause, they don’t hold anything in their hands.  Rather, donors hold an image of themselves as charitable and a satisfaction that they are contributing to something good. As Rob Anderson, Managing Director of Fenton’s New York office and head of the firm’s Corporate Social Responsibility practice points out in the company’s 2010 Fenton Forecast: Leadership and Effectiveness Among Nonprofits, “…there is an opportunity for nonprofit organizations to connect with supporters and prospects to engage them in the organization’s overall mission. There is a direct correlation between how effectively nonprofits communicate to support their brand and their fundraising results.”  In short, nonprofits have a responsibility to convey the tangibles of their brand because donors often do not have the opportunity to experience them firsthand.  Direct response’s longer formats -28 to 30 minute and newly introduced 5 minute segments versus 30, 60 or 90 second segments – and call for immediate action offer an ideal platform for making a nonprofit’s mission more concrete.  The key is to make your donor feel that they are an indispensable part of your organization and integral to your success.  Nonprofits that don’t place an emphasis on the tangibles of their brand run the risk of becoming dispensable to their donors.

As the 2010 Fenton Forecast points out, nearly two-thirds of survey respondents report that they plan to either reduce their giving or keep it the same as last year. This is on top of already reduced giving levels for 2008 and 2009. While 80 percent of survey respondents have a positive view of nonprofit performance, that sentiment alone is not enough to persuade them that their support is vital in sustaining that performance.  Of those who planned to decrease their giving in 2010, 56 percent say they will cut donations by 25 percent or more. Underscoring this problem is the fact that Americans ages 50 and older, who are typically a reliable fundraising base, intend to reduce their giving the most.  This lack of action can be tied directly to under-performing or ill-informed nonprofit advertising efforts.  Consumers are spending in spite of the recession; they just aren’t spending in the charity sector.

If nonprofits want to compete for their portion of consumer spending, they’ll need to increase their investment into effective, targeted advertising efforts.  A rough estimate of annual nonprofit sector marketing spending puts it at $7.6 billion, which is a substantial sum. However, that is a rough estimate and not a large percentage of the $800 billion total that will be spent on advertising this year. According to Dan Pallotta, a leading expert on innovation in the nonprofit sector and the author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential, the nonprofit sector is not spending enough money to be effective. Take away nonprofit universities, museums, and other quasi-businesses, and a liberal estimate of annual health and human service nonprofit marketing spending is $1.9 billion — one dollar for charity, $384 for something else. In 2005, Save the Children (one of the larger charity advertisers) spent about $6.4 million on advertising. The Walt Disney Company — or Entertain the Children — spent about $2.4 billion — 359 times more.

It’s time for nonprofit advertisers to rethink their message and their media. I see three ways that the nonprofit sector can work more effectively by embracing direct response:

  1. Find your target donor: The only way to be successful when advertising on a restricted budget is to employ proper targeting tactics.  For nonprofits, this means conducting tests and market research that will help you understand how you are connecting with your customers.  Testing will help you find a customer group that has enough interest in your mission to contact your group and/or donate. By testing concepts and working with experienced partners, the right message can be channeled through the right media to identify and capture your target donor.
  2. Be authentic: Because nonprofits depend on intangibles, you must make sure that the emotional tug of your brand is real and is perceived as a service by your potential donors. Testing can help determine what messaging is really resonating. Also, using a longer format will make it easier to present the emotions, services and authenticity of your nonprofit. It is simply not enough to say “we need your help.”  Just as consumers need to be shown the tangible benefits of a can of soda or a Caribbean vacation, they need to be shown the tangible benefits of their support of your nonprofit.  Often, that can’t be achieved in 30 seconds or less.
  3. Collect data: Customer data is essential. For any brand, data is the lifeline to sustainable growth.  DRTV generates actionable data and adds to your customer data warehouse.  This data is the most important element of your advertising effort and your most worthy investment, as it will continue to inform future marketing initiatives.  Data collection is not an added benefit, it is imperative to your success.

Nonprofits need to demand the same time and attention of potential donors as any consumer packaged goods company would. They need to make a direct appeal to potential customers that makes them feel the need for immediate action.  That is the only way to close the current marketing gap between the tangibles consumers expect and the intangibles that nonprofits offer.

Ronald C. Pruett, Jr. is Chief Executive Officer of Mercury Media.  Prior to joining Mercury Media, Pruett was the Executive Vice President and Chief Marketing Officer of Polymedica/Liberty Medical, the largest publicly traded diabetic supply company and one of the largest multichannel direct response marketers in the country. The company was sold to Medco Health Solutions.  Pruett has extensive experience in the creation, acquisition, and management of direct to consumer marketing companies in the US and abroad.

Contact him at rpruett@mercurymedia.com

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