November 17, 2013

FACEBOOK TRIES CROWDFUNDING FOR THE RED CROSS!

Today, while doing my usual facebook check i found a Facebook Advt nicely nested in the top of my newsfeed. On further examining it i found out that it was a facebook ads and they were using the top of my news feed stream to advertise. The Ad basically said Donate now to emergency relief in the Philippines. Send NOK50.00 to support the Red Cross Red Crescent global network help those affected by the typhoon. The full amount of this donation will go to the Red Cross Red Crescent global network response. There couldnt be a better way to crowd fund for charity!

I do understand the need for than and i totally support the cause but this lead me to dig a little deeper. The advertisement was set up quite easily and the call to action followed through the process. Since i have used the facebook buy button often i know that the next set lead to the credit card and other payment options which in turn pulled the money from your card or paypal account.

The checkout process is really very simple if you have your card connected to facebook. Since the process was so simple a few questions that popped into my head. How many people actually click ads like this and how many people actually donate. Lets start with the total amount of active users on facebook. This post by Josh Ong indicates that facebook, as of July 2013 has 1.15 billion active monthly users.

Now the since we know that facebook has 1.5 billion active users I am intrigued to know how many of them click on the facebook ads. Most of facebook ads are usually targeted to user profiles so the CTR (Click Through Rate) should be a bit higher than the rest of the ad services out there. Google Adwords is an entirely new chapter!

In a blog post by Andrew McDermott he added a few benchmarks to the facebook ads CTR based on his experience. Although i am not so sure if this is a 100% accurate but i personally do this the stats are quite good.

  • Optimal CTR: 0.11%-0.16%
  • Above Avg CTR: 0.07%-0.09%
  • Average CTR: 0.04%-0.05%
  • Below Avg CTR: 0.02%-0.03%
  • Poor CTR: 0.01%

    Our analysis is based on a facebook advertisement that has charity as its goal and an ignition of global emotion added to it. This would definitely have to spark up the CTR but for analytical purposes lets just keep to the 0.16%. So 0.16% of 1.5 billion is 2.4 million. This means that approximately 2.4 million are active monthly and click on advertisements. The next question here is how many would actually contribute to charity. I found a report that was done by the BBC in 2012. They did a survey with over 3000 people and got the following results.

    Number of people, in millions, donating to causes on a monthly basis:

     

    • Medical 11.1 (38%)
    • Hospitals 7.7 (26%)
    • Children 7.2 (24%)
    • Overseas 5.0 (17%)
    • Other causes 4.4 (15%)
    • Disabled 3.3 (11%)
    • Homeless 2.6 (9%)
    • Health 2.2 (7%)
    • Environment 1.6 (6%)

    Although a few of these would not really match our target scenario i have still taken them in into a the rough approximate i have created as when there is a natural disaster i assume people come together from all walks of life to help. We could make a rough estimate here that around half of the survey group donated to some kind of charity but this is really hard to estimate so we will make 3 groups, 10%, 25% and 50%.

    If 0.5% of 2.4million (12000) donated,

    they would have raised approximately: 600000 NOK or 98270 USD

    If 5% of 2.4million (120000) donated,

    they would have raised approximately: 6000000 NOK or 982704 USD

    If 10% of 2.4million (240000) donated,

    they would have raised approximately: 12000000 NOK or 1.9 million USD

    Whichever way this goes it looks like they are generating a huge sum for the relief campaign. I think this is an amazing way to have to get the job done and by far the fastest. Imagine the time social networks get together for charity causes and end up crowd funding charity events, those will be the days!