What nonprofits can learn from Facebook’s (Meta’s) latest quarterly report (Jul to Sep 2021)

Here is a tear down of Facebook’s (now called Meta) latest earnings report with all the stats and insights nonprofits need to know

At the time of this earnings report Facebook had not changed their name to Meta, so below I use the names interchangeably. I don’t use an editor so forgive my imperfect writing! Next time I write this I can just call the company Meta.

Facebook is a public company and so every quarter they have to publish their earnings along with a report for their shareholders. It’s always an illuminating glimpse into the company, what they are doing and how they are thinking.

Below is a tear-down of the key points as they related to nonprofits and I have tried to pull out the insights and impacts that will effect nonprofit marketing and fundraising.

Facebook is still growing Daily Active Users (DAUs) in every international region

These numbers do not include Instagram or What’s App. Facebook added 17 million users in Asia Pacific and 5 million across Europe and Rest of the World.

Also, even in the US (which for the last few quarters has not grown at all) Facebook added 1 million users.

Some people may be deleting Facebook but it’s not reversing growth. There is still no other platform that comes close to Facebook’s scale and reach. Therefore if nonprofits want to focus and master a platform - you would still start with Facebook.

Facebook (now Meta) across their “family” of apps, reach nearly 3.6 billion people 🤯

Facebook have a name for people that visit one of their apps at least monthly - Monthly Active People (or MAP). This includes Instagram, What’s App, Messenger but doesn’t include any data from other non-Facebook owned sites or apps.

No other platform/company has connected this many people at this scale. It is an incredible, frightening thing.

Expect Facebook/Meta to continually role out innovative advertising opportunities across their family of apps, allowing nonprofits to reach more people to engage them with their cause.

Apple’s iOS 14 changes (App Tracking Transparency or ATT) hit Facebook hard and has had a very material negative impact to Facebook Advertising that will be around for a while yet

This is the first quarter where Apple’s iOS 14 update for ATT impacted the whole quarter and it’s clear that it has hit Facebook really hard. Zuck is no fan of Tim Cook and Apple right now!

Sheryl Sandberg said it this way…

As a result (of ATT), we've encountered two challenges. One is that the accuracy of our ads targeting decreased, which increased the cost of driving outcomes for our advertisers. And the other is that measuring those outcomes became more difficult.

It seems the specific issue is that Facebook are have a very hard time reporting on conversion that happen “iOS web conversions”. So that means any time someone takes an action on your website after seeing a Facebook Ad, Facebook is under-reporting the conversions. Because Facebook’s targeting is based on conversions this is a real problem. A LOT of people (most actually) use Facebook on their iPhones!

I’ve seen this with our nonprofit clients. Facebook Advertising has become more challenging. CPM, CPL and CPAs have all gone up. Facebook does seem to be under-reporting conversions and struggling to target as well as it used to.

Sheryl also said…

Our direct-response products are built on user-level conversions. And as a result of the iOS changes, we don't see the same level of conversion data coming through. So, we have to rebuild our targeting and optimisation systems to work with less data. So, this is a multi-year effort.

So unfortunately folks, these issues will be with us for longer than I originally expected.

Even with these challenges I still believe Facebook offers nonprofits the best Return on Investment. It’s just not going to be quite as good as it was before. So we’ve moved from VERY good times to just good times.

Sheryl again…

When you compare us on ROI, we've always performed well. We still do, even though we've taken a hit, and we're focused on continuing to do that for businesses.

The impact for nonprofits here is they should probably look to cut their ROI expectations from Facebook by around 20% (rough guess). So if you were getting 4 to 1 ROI before you should trim that to 3 to 1. That kind of thing.

Conversions (leads, donations etc) will move to “On-Platform”

Part of the success of Facebook Fundraising Challenges we have been doing at GivePanel has been the fact we keep everything on Facebook. The initial sign up comes via Facebook Lead form, where we then get people into a Facebook Group.

This is because if Facebook keep conversions on-platform they can track them 100% for you and do better targeting.

Facebook’s new Ad features for nonprofits are all about this. Keeping donations on-platform.

This will have multiple impacts. A few would be…

1. It will training donors that donating really is as easy. Every other user experience - like your organisations website donation form - will seem complex and annoying in comparison.

2. Conversions will be super accurate so targeting and conversion optimisation should be really good, leading to lower CPAs

3. Nonprofits will get less personal contact details from donors and have to rely on social media content strategies to keep donors thanked and engaged.

Commerce and Shopping is about to get big on Facebook/Meta’s family of apps

Again - in line with the trend of conversions moving to on-platform Facebook are getting big into e-commerce where sales will actually happen on Facebook’s family of apps.

Zuck said…

Our next product priority is commerce, helping people discover new products that they're interested in, and reach customers inside our apps. We're going to unlock a lot of opportunities. As Apple changes, makes e-commerce and customer acquisition less effective on the web, solutions that allow big businesses to set up shop right inside our apps will become increasingly attractive and important to them.

So your charity shop for year end 2022 will probably be partly on Facebook for the full sales process.

Reels for younger audiences

Facebook are honest with themselves that they are engaging younger audiences less well than TikTok and SnapChat. Enter Reels.

Reels is Facebook/Meta’s answer to the TikTok format and they will be making this a core part of the app experience on Facebook and Instagram in the coming months. This is a very similar strategy that they did with Stories and it did work (for a while)

This actually means that YouTube (with shorts), TikTok, Snapchat, Instagram and Facebook will all feel very similar in terms of this new short video format. I don’t think it’s forever it’s just the next “fashion”.

Nonprofits should expect more Advertising formats and opportunities in Reels and will need to think about adapting their creative for social media being mainly short videos scroll-style format.

Fundraising in the Metaverse

If you’ve ever experienced the Oculus Quest 2 VR headset from Facebook (Meta) - only released a year ago - you will have experienced how Virtual Reality is already here. The experience is truly amazing. It’s just up to now so many people have had an average to poor experience with VR that it’s slow to take on.

That said I’ve read that Facebook/Meta may have already sold 5 million VR Oculus head sets.

The Metaverse however is a bigger vision than just VR. It’s about how virtual reality meets the real world (augmented reality). It turns out that AR is way more of a challenge technically than VR.

If you are into this stuff I highly recommend you watch the Keynote from Connect 21 from Meta. Better than that - buy a Quest 2 and experience it for yourself. I defy anyone to experience Quest 2 and not see how much of a game-changer this is going to be.

If social was the 2nd version of the internet (Web 2.0) then the 3rd iteration is will be the Metaverse and it’s already partly here.

This will mean a whole new set of opportunities and challenges for businesses, creators and nonprofits. It will be a whole new economy.

Along with those social experiences, I expect a massive increase in the creator economy and amount of digital goods and commerce. If you're in the metaverse every day, then you'll need digital clothes and digital tools and different experiences. Our goal is to help the metaverse reach a billion people and hundreds of billions of dollars of digital commerce aesthetic.

I for one am super excited about helping nonprofits in this new frontier but right now there is not a lot you can do other than get to know about it.

The best strategy right now is to PLAY! Everyone serious about digital fundraising needs to jump in and just start experiencing this stuff. If don’t want to then find someone on your marketing or fundraising team who will. As millions of people start to experience the metaverse for themselves you’ll need to understand your audience and the experiences they are having.

My predication? Metaverse fundraising will happen faster than you realise.