Fundraising - Big vs Little

Do you need a big firm to raise money? I’ve recently been on the other side of an agency relationship with one of my clients, joining the client’s team to work on End of Year Fundraising goals. It’s been pretty interesting. Some agencies tend to shield the people actually setting the ads from clients and I don’t think that’s a great practice. The thought is that clients don’t understand technical things or they’d do them in-house, but that’s not necessarily true. They may be too busy with other things, or they may not understand enough to run it all by themselves, but typically, people in those positions are very smart people and even if they don’t know how to do it, they can understand things. I think it’s also just weird and somewhat telling of the quality of work if an agency doesn’t want to include anyone actually doing the work in client calls. When there are issues, the client services people can’t speak to those issues and it’s like playing a game of telephone with technical information - it just doesn’t work.

I will say, when I worked at an agency, I’d been told that I offer too many details and that clients don’t care about technical things. I can understand that a bit, but on the whole, I disagree. Part of the job, in my opinion, is explaining the steps you’re going to take and why you’re going to take them. It shows honesty and transparency and good stewardship of client dollars. If a firm just talks about their fancy tools and can’t explain what they do or why they’re charging you to set that up, maybe it’s not worthwhile.

It’s also important to have access to technical folks when things aren’t working. You’ve hired an agency because you trust them based on reputation or previous conversations, but when things don’t go well, there has to be someone who understands enough to ask questions or provide a plan of steps to investigate things.

I did a review of a previous campaign run by that agency that hadn’t gone well and noticed that something was glaringly off between reported conversions in-channel and the actual number of conversions. That’s a sign that something is off with the pixel, it was over-reporting by a huge margin in this case. Typically, Facebook is known to not have accurate reported conversions as a result of the iOS privacy changes because it uses data modeling for the things that are now shielded from its view. However, there’s a certain margin that’s usual and seeing a big difference is weird, especially with it over-reporting, which signals that the machine learning may be targeting wildly based on those incorrect numbers. It took a while to get to the right person with the agency to have that conversation and have the pixel set up looked at. Some adjustments were made, but it didn’t seem like they could stop the issue entirely and part of that was due to the fact that they wanted to run things through their ad server for a fancy reporting tool. Fancy tools and reporting are very cool … as long as things work, but when it doesn’t, what is in the client’s best interest is making sure the fundraising comes first.

So we ran a small test with the next round. The test used the same creative and audiences, some small tweaks to set up and a more direct checkout for donations ensuring that Facebook could see the pixel fire. The agency’s ads did ok this time, they definitely improved from the previous campaign, however, they also weren’t interested in making improvements as long as results were under the $100 CPA they quoted. After a week, my campaign had 30% higher Return on Ad Spend and was $35 cheaper in both gross and net CPA. My net CPA was about $18, meaning that for the ads to break even, each donor I acquired only had to donate another $18 later once folded into the email program. Now, to be fair, these KPIs fluctuate daily while ads are running, but coming from a political realm where there is a much shorter window for Direct to Donate ads to pay off, I personally only feel comfortable with a net CPA that’s under $25. I think it’s also important to note that there are optimizations worth making even when KPIs are good, if you want to see the best results - and anyone running these ads should want to see them profitable.

So, in the big vs small conversation, both can be effective, so it’s really about what fits for you. I have only ever worked at small agencies and I do lean toward them, but it’s important to be able to trust they know what they’re doing. Big agencies have the reputation of expertise, but I’m not sure they’re any more knowledgeable than the general crowd of firms. Big agencies do have a lot of overhead they have to pay for and they may be stretched to the point that they aren’t giving quite the care and concern a fundraising budget deserves - especially with those dollars being so precious at a time when it’s very difficult to raise well. There are some red flags to look out for in those initial conversations with an agency, big or small - if they say that Facebook no longer works, that’s just wrong. It is not as easy or as cheap as it used to be, but it definitely still works very well. There are privacy issues and if you’re working in Europe, a lot of changes just came into effect, but as far as effectiveness, it’s still the go-to channel. My previous agency ran a lot of testing of various channels to find new fundraising channels that were worthwhile. Not that many turned out to have a chance to be profitable. Display was one those poor-performing channels - it took a ton of hours to manage and optimize and try to get the most out of it and still did not perform well. A big agency may have a ton of staff, but they may not have the right staff or the ability to cover the hours required by the ad operations folks to monitor those campaigns that closely. So if they pitch that channel, it’s worth asking how often they plan to optimize and if they can give you a schedule. It is also a great idea to ask about KPIs up front and hold them to that and ensure that all of the ads are sourced properly so they can be tracked effectively – and if they admit they won’t be directly profitable, but you may get view-through conversions and it’s worth using Display to stay in front of your audience, that may be true to a point, but consider how often you pay attention to those ads and how much budget you’re willing to use there without any way to really prove effectiveness. If they are managing creative as well, they should provide several options to test because in my experience, you never know what is going to perform well. Sometimes, the worst creative – the ugly one or the one you just hate – is the one that actually works the best. Plans and channel mix may depend on the scale your organization needs - I’ve recently done some lead acquisition testing with Google Responsive Display that performed very well, but with a pretty small budget. At my former agency, scaling that channel effectively for a large, global organization did not work. So, that can also be an important conversation to have with folks - are they willing to work with smaller budgets to test things? If you have a large budget are they still going to start out small to ensure good stewardship of your dollars, or are they just going to put that all in and hope for the best?

It’s late in the year and most folks already have their End of Year plans locked in, but hopefully this is helpful for anyone looking for new agencies next year. If you’re currently running EOY and not happy with how things are going, please feel free to get in touch. I am happy to take a look and see if I can suggest some steps. Or, if you’re running late and need someone to jump on some EOY giving, I’ve got current capacity for one more client, so let’s chat!