Should unions advertise online? This question came up while I was travelling in the USA.

How can your union determine whether it’s worth spending the time and money running ads, whether Google pay-per-click ads or those annoying banner ads you see everywhere? (There’s also growing use by unions of social media ads, especially promoted posts.)

Unions may want to run online ads for a range of different reasons.

The most obvious example is to gain new members. While the vast majority of union members join via a face-to-face conversation with a union representative (an organiser or delegate), almost all unions have a section on their website where workers can join the union. Is it worth running digital ads to promote online membership?

The second most common reason a union may run online ads is to promote a campaign. For example, a union may run a public policy campaign or a campaign that aims to raise awareness of an issue amongst the general public (or a specific audience). During industrial disputes, for example a city-wide strike, a union may want to run ads that link to articles that explain the dispute.

A third reason that unions may run online ads is to gain supporters for digital campaigning. Unions are increasingly operating online campaigns, and a key tactic for those campaigns is to build a base of supporter email addresses using tools like petitions. Online ads can direct people to those campaign microsites and landing pages.

So, how can you determine whether it’s worth it?

In the case of member recruitment, it’s fairly easy. Your union’s finance department should be able to give you an estimate of a member’s “life-time value”. That is, the average length of membership (e.g. four years) multiplied by their annual dues (e.g. $400). In this case, a member’s financial contribution to their union would be $1,600.

Of course, there are costs to the union to service that member (as well as fixed costs to keep the union running), and your finance department, again, should be able to help you calculate that. Let’s say that these come to $1,000.

This means that it is financially worthwhile for your union to spend up to $399 to recruit that member.

(This calculation also explains why retaining members is so absolutely vital for unions. See more here.)

Now comes the online ad, and this is where you will need to make some guesses. There are two types of online ads: display ads (banners) and text-based pay per click (what Google mostly does).

Display campaigns typically run on major websites, like news sites such as The Age or the Washington Post. These generally require a large up-front cost, and you pay per impression (i.e. the number of times the ad is loaded, not the number of times someone clicks on the ad). Using the example from earlier, if your up front cost is $10,000, then you would want to end up with at least 25 new members from the campaign.

This highlights why it is so important to focus on website conversion; if your join page doesn’t work, or is complicated, or is not mobile/tablet optimised, then you could be wasting your money.

For pay-per-click ads, you typically are looking at a cost of around $1 to $10 per click, depending on the keyword you want to bid for. Again, conversion here is very important. The calculation is similar. Let’s say your goal is 25 new members, and your website converts at 0.5%. You would want to buy 5000 clicks using pay-per-click to get those 25 members. If each of those clicks cost you an average of $2, then you’d pay the same $10,000 to recruit those new members.

Again, this highlights the importance of good conversion rates and investing in an excellent website.

What about the other two reasons that unions may want to advertise online: promoting a campaign or gaining new supporters.

When promoting a campaign, many unions often think about traditional media advertising. For example, running an ad on TV or in a newspaper. What you are doing there is buying an audience. The ratings and distribution figures that determine the cost of these ads really tell you how many eye-balls you can buy. For example, if you buy an ad for $10,000 in the Herald Sun (circulation 1.4 million), then you’re paying $7.14 per 1000 people. The cost per thousand for online banner ads on the Herald Sun’s website is approximately $3.50; half the price of a print ad.

The main problem is that this mass audience often isn’t very targeted. While television stations and newspapers can tell you about the demographics that watch their shows or read their papers, the information is not very specific. You are often paying for an audience that is wholly unsuited to receiving your message.

Online ads, especially pay-per-click, let you target much more closely, so you are only speaking to the people you really want.

In the case of online ads for raising awareness about your campaign issue then, your union should consider online advertising as a more efficient, more targeted alternative to traditional print media or TV.

Finally, what if you want to build a group of supporters and their email or other contact details? Often, these supporters are not members of the union. For example, you may want to build a group of supportive parents if you’re a teaching union.

The key calculation here is to determine the value of an email address (or phone number, or mailing address). Since there’s often no financial connection from supporters to the union (e.g. they don’t join and pay dues), this can be tricky. However, with no benchmark, it can be easier to pull a number from the air at first, and then vary it once you start getting real data to work with.

For example, if you value a supporter’s email address at a hypothetical $5, then you would be willing to pay up to that amount per click (for Google ads). Of course, this assumes your conversion rate is 100%, so if your conversion rate was a much lower, say 20%, then you’d need to get 25 clicks to get one email address, with an average cost of just $0.20, to make it worth it.

At this level, it can seem dubious as to whether it’s worth it, or even possible, to grow a supporter list using online ads. This is where low cost-per-click sources like Facebook can be useful, especially promoted posts, which can have a “free” sharing component.

However, where online ads shine for supporter acquisition is scale. You can quickly build large-scale supporter acquisition using online ads, which can be varied and tweaked in real-time to improve their impact, and you can target specific groups or audiences with great precision.

Online advertising should definitely be considered a part of the mix for unions. It’s obvious, stand out value is clearly for the higher life-time value areas like recruiting dues paying members. However, even for less “valuable” uses (in simple dollar terms), there can be benefits for running online ads.

What underlines all of this though is the importance of your digital conversion rates. Any time you spend money online, whether it is paid online ads or social media promoted posts, or sending email blasts using a paid-service like Salsa Labs, Nationbuilder or Mailchimp, you should be closely concerned with the conversion rate.

Before you start jumping into buying online ads, or into spending lots of time on social media, make sure your website is up to scratch.

(Apologies for any faulty maths in this post.)