Sarah DiJulio on ROI of list building

In addition to being one of the very smartest people in our business, Sarah juggles two kids and helms M&R’s very significant online consulting operation.  Following is a post she made on the Progressive Exchange board that’s quite worth sharing (thanks Sarah for permission!):

Many nonprofits share the same goals with regards to paid online media
campaigns. I can share some data, assuming your goals are to:
A) Build your email list.
B) Generate meaningful political actions that help move your issue forward.
C) Raise money from your email list eventually, helping to offset the cost of the ads.

With those goals in mind:

1) For paid online advertising campaigns, we find a cost-per-action  typically ranges from $1.50 – $3.50.  Depending on how many email activists a nonprofit already has on their file, the cost per new subscriber is often higher, as up to 50% of the people you recruit to  take action via an ad may already be subscribers, or they may opt-out of future emails immediately.

2) For the vast majority of the paid online advertising we do, we end up doing email advertising rather than web advertising, because the email ads perform so much better. Web Banner ads rarely hit that $1.50- $5.00 Cost Per Action, but instead typically range from $10 – $50  CPA, which rarely justifies the expense.

3) In terms of converting a new online prospect to donor, our testing has shown that you should ask for money immediately after you recruit  them – ideally within two weeks, and as the very first email you send to the new subscribers. But you can expect that it may take a full 12-24 months before a group of new recruits donates enough money to pay for the initial cost of the ad. (This can vary wildly, of course, depending on the nonprofit you are talking about and their brand.)

Hope this is helpful!

-Sarah