How charity media expenditure patterns are changing

nfpSynergy have released a new analysis of charities advertising expenditure patterns. It shows charities are losing out by not spending more for internet advertising, research shows. Online advertising now accounts for almost half of all ad expenditure in the UK, however where charites are concerned the third sector groups are lagging behind the norm qute considerably.

nfpSynergy compiled data which shows that the proportion of charities’ advertising spending that goes online has doubled from 2.5% in 2011 to 5% in 2016. The doubling of spend is a significant increase when taken on its own but in comparison, overall spending on online advertising has grown from 29.7% of the UK’s total advertising spend in 2011 to 46.2% in 2016.

Key findings include:

  • Advertising spend continues to grow across the UK, and charities have a minimal hold of between 2% and 3% of overall spend.
  • The main area of growth in advertising in the UK is through the internet, which has nearly doubled over the last four years and grown to 46% of all advertising spending. While charities have followed this trend they trail behind with only 5% of their advertising budgets going on the internet in 2016. 
  • That said, charity internet expenditure has risen over the last three years and represents a growth across the charity sector. However, this has been spearheaded by the large charities who are increasingly investing millions of pounds in this area.
  • Charity Press is the only area that has shown a downward trend over the last nine years, and especially since 2013, corresponding in the opposite direction to the advertising spend on the internet.
  • Direct mail has reduced from around three quarters to a half of charities’ advertising expenditure, demonstrating a move away from direct marketing but this sill dominates charities advertising portfolios. With the eve of GDPR this is likely to change, and may be the right opportunity for charities to diversify their advertising.
  • Cinema advertising spending has also increased over the last few years, but this is a small part of the expenditure and tends to be used by only around 25 charities, and is dominated by very few.

Debbie Hazelton, a research assistant from nfpSynergy goes into a bit more detail about the findings on their blog:

“The internet is increasingly dominating our time and advertisers are tapping into this. Expenditure across the UK on internet advertising almost doubled from £5.4 billion in 2012 to £10.3 billion in 2016, a huge 46% of all advertising spending. As can be seen in the chart below, charities have not followed the extreme development in this trend with only 5% of their advertising expenditure going on the internet in 2016, up from only 2.5% in 2011.

If 46% of mainstream advertising expenditure is on the internet, why are charities only spending a minimal 5% in this area?

Figure 1: The difference in expenditure of advertising types between mainstream and charity advertisers in 2016

nfpSynergy charity media expenditure

Source: Statista, Advertising Association and Nielsen

One of the main arguments against the investment in internet advertising is the lack of engagement with older audiences – who are also those who state that they give most regularly and the largest amounts to charity. But this is no longer the case! As seen in data from the Office of National Statistics and widely broadcast in the media, older generations are increasingly active both online and on social media. The percentage of internet users in older age groups is ever increasing. In 2011, 19.9% of people over the age of 75 used the internet, which has nearly doubled by 2016 up to 38.7%. This trend can only be seen to increase as the never-ending cycle will bring more internet savvy generations into this age group.

The small but significant movement into internet advertising has been spearheaded by mass investment from some of the larger charities. Rapidly increasing their spending from 2014 to 2016, Macmillan has been at the forefront for the last few years. They have increased their advertising spending from £0.65m to £2.9m in just three years, having started their online advertising in 2015 to promote the Macmillan Coffee Morning events. From our research with the general public we can see that this has paid off, resulting in significantly increased awareness. The ability to both reach out broadly, and target advertise through the internet at different cost levels, can provide an opportunity for large and small charities alike to reach existing and new audiences with their campaigns.

As GDPR nears are charities going to shift from direct mail?

Comparably, direct mail has been the staple of charity advertising for decades, and used almost three quarters of advertising expenditure in 2008. This proportion has shrunk in the last 8 years, down to just over half of expenditure in 2016 but this still has huge dominance of charities’ advertising portfolio. With the advent of General Data Protection Regulation (GDPR) and the increasing control over direct correspondence to individuals, this will have to change. This is something we’ve been exploring in both our tracking research and bespoke work  to understand and help inform the future of charities’ data protection and contact with their supporters. We have also published a very popular report on GDPR, exploring the public, and specifically donor’s responses to the incoming regulation. As charities change their advertising and fundraising campaigns, perhaps this will provide the right opportunity for charities to diversify their advertising.

As charities reduce the proportion of their spending on direct mail, why are we not seeing an increase on internet advertising spend?

There has been a reduction of spending on direct mail by charities, from three quarters of spend in 2008 to half of advertising cost in 2016. If this was following the trend of the whole of the UK this would have been invested into internet advertising, but instead has moved into a higher proportion being spent on TV advertising. TV advertising has become an increasing cost for charities, almost tripling in the last 8 years to over a quarter of the spend (27%). TV has and does continue to grow and be an important area for advertising, but only within a much larger advertising portfolio. The charity sector could be seen as decades behind the rest of the UK’s advertising scene when looking at the advertising proportions.

Charities are a small but significant part of the advertising scene in the UK. The use of direct mail dominates charities’ advertising spending and reflects the desire for individual, targeted campaigns and appeals. However, the lack of investment in internet advertising leaves a gap in charities’ portfolios. Especially when this has been so highly successful for the charities that have invested in this area, alongside the success for advertisers in general across the UK. The internet is no longer an exclusive place just for the young and tech savvy, but instead can be a space to engage with individuals across society.”

For those interested the full report can be downloaded here.




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