Paid Media ROI for NPOs & Purpose-led businesses

Paid Media ROI (return on investment) is one of several important measurement metrics we monitor and use to evaluate campaigns we work on for clients.

Metrics and their acronyms can be a little confusing, the good news is however, is that they are way easier to understand than the jargon sometimes suggests.

Our previous blog dispels the mystery behind many of these, so if you’d like to know the difference between ‘KPI’ and ‘CPM’ etc, please hop over to Digital Advertising Metrics for NPOs & Purpose-Led Businesses for a glossary of the most important terms used and why these metrics are crucial.

Paid Media & Paid Media ROI

Paid media means you pay money to the platform that shows your ads.

These ads help non-profits and purpose-led businesses reach people that their own content, like their website or social media posts, can’t reach.

This is a good way to find new people who might support or donate to your cause.

Paid Media ROI are what you get back for the money you spend on ads. It’s like checking if your investment was a good deal.

Having a Plan to Measure Performance

It’s important to have a plan in place to measure how well your ads are doing and to determine this we will first discuss with the client which performance metrics are the most important to them.

We use something called key performance indicators (KPIs) that connect with what our clients want to achieve.

For example, if a client wants to let more people know about their organisation or an event, we might look at how many people saw their ad, how many watched their video, or how many remembered their brand. In these cases, success isn’t just about how much money we spent.

But sometimes, we need to be more specific. We want to know if the money we spent on ads was worth it.

This is when we tie our KPIs directly to the money we invested. It’s like making sure we get our money’s worth.

This kind of strategy is often called “performance marketing” because it focuses on results.

Advertisers pay for ads that directly help them achieve their goals, like getting people to click on their ad (cost per click), share their email (cost per lead), or make a purchase (cost per conversion).

Getting a Good Return on Investment

For performance campaigns, we start collecting data as soon as the ads start running.

We take a hands-on approach to looking at the data and making it work better. There are many things we can change to make the ads perform better, like where we show them or who we show them to.

Our goal is to find the best way to get the most out of the money spent.

Remember, what’s considered a good return on investment can vary from one organisation to another.

It can be harder to get a good return if there are lots of other groups advertising similar things.

The size of your audience and how well you can target them also matter.

Lastly, how good your ad is — from what it says to what people do when they see it — affects how well your campaign works.

We call this the value proposition and it is vital to consider all aspects of the campaign to establish an achievable paid media ROI.

Pros and Cons of Performance Marketing

It would be natural to simply say we should always use performance marketing as this is the best way to measure the bang for your buck.

However, performance marketing and ROIs are a piece of a larger puzzle that includes many other reasons to use paid media such as brand lift, storytelling, reaching broader audiences etc.

Pros

• You only pay for measurable results
• Results are monitored in real-time which means the campaign can be improved the longer it runs
• Performance marketing is very efficient for budget spend

Cons

• Performance marketing usually requires big budgets as these are what we call low-funnel metrics
• As this type of marketing does not drive awareness, which causes generally need, it limits one’s exposure
• Performance marketing is not easily scalable since its focus is primarily on an audience driving the most cost-efficient results, e.g., donations and does not focus on reaching broader audiences.

2023 average ad click through rates (CTRs) for paid search, display and social media.

MUST READS

• STORYTELLING THAT DOESN’T SUCK: BEYOND CONTENT MARKETING
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• WHY CONTENT STRATEGY IS CRITICAL TO SOCIAL IMPACT CAMPAIGNS
• FACEBOOK ADS — THINGS EVERY NPO, SOCIAL IMPACT CAMPAIGN & BRAND SHOULD KNOW
• THE ROLE OF AUTHENTIC CAUSE MARKETING: BUILDING TRUST AND CONNECTION