Is Your Online Event Revenue Declining?
There is a worrying trend that may sound familiar to some of you: Fundraising event revenue online is down in the first half of 2015 versus the same time last year. Not in all cases of course, but in enough situations to warrant a discussion.
Some of the data I have examined tell a pretty clear story. As audience shifts from desktop to mobile, the average gift online is declining. So even though there are more donations, the overall revenue is less than the same time period last year.
What’s going on here?
We’ve known for some time that peer-to-peer fundraising events have their own life-cycle of growth, plateau and decline. Depending on how many years you’ve run your event, you can estimate where you are in that cycle.
One of the top organizations to track American fundraising events is the Peer-to-Peer Professional Forum. In its latest research examining the top 30 events in the U.S. and comparing gross revenues from 2014 to gross revenues for 2013, it found that the group was down by 2.5 percent. Some were up and some were down, but overall these 30-largest events generated less revenue in 2014 than they did in 2013.
However, in this fundraising-events environment the area of growth has always been, at least for the past decade, the online portion. Year after year, even though overall revenues may have been flat or declining, we could always count on the online revenue to increase year over year.
So, when we see online event revenues that are lower than previous years, it’s a big deal.
Back to the data: When I take an example client who is concerned about the decline in online revenue, I first segment the desktop/laptop computer revenue from the mobile revenue, and I further segment the mobile revenue into two buckets: smartphone and tablet. This is where the heart of the story lies, and where we can start to understand the decline in online revenue.
When viewed from this perspective, it’s clear that not all online revenue is dropping. It’s true that desktop/laptop computer revenue may be lower for the first half of 2015 compared to the same period for 2014. But smartphone revenue is doubling and sometimes tripling in the same period. Tablet revenue seems to be fairly steady from early 2014 to early 2015 in the U.S., and comprises no more than about 10 percent to 15 percent of online revenue.
The issue is that smartphone revenue is not growing at a rate fast enough to make up for the loss of desktop/laptop revenue. This is a real problem for many fundraising organizations, because the forecast from every credible source is predicting more and more smartphone audience and less and less desktop/laptop audience as we finish 2015 and move into 2016.
To put a finer point on it, smartphone donations are harder to get and are typically smaller on average than desktop/laptop donations. Let’s say your conversion rate for desktop/ laptop donations is five out of 100 visits, and averages $125. Check this with your own data, but I’m willing to bet that your smartphone donations occur at two out of 100 visits, and average less than $100.
The sky is not falling, but it’s cloudy.
I’ll spend some time in future columns talking about what some of the fundraising thought-leaders are doing to address this challenge, but for now I’ll leave you with this phrase: mobile first.
Mobile-first describes a way of thinking about how to embrace your smartphone audience. As the words imply, you start with a blank slate and envision what your audience experiences on their smartphone first and then design the laptop/desktop experience after that. Not the other way around.
Some examples of mobile-first: Facebook’s new iPhone app, and NPR’s new “NPR One” mobile app.
Philip King is founder of The Donation Funnel Project, an experiment in online and mobile fundraising. He is a regular contributor to NonProfit PRO.