Part III: “M” Is For Merchandise.
(In case you missed it: Part I: L Is For List-Building and Part II: I Is For Interns).
Selling merchandise is one of the greatest, most underused tactics that you can easily do with Google Ad Grants. A lot of nonprofits think you’re not allowed to advertise products for sale with your Grants account, but you absolutely are. The only caveat is that 100% of your profits must go back to the charity, and I expect that’s the case with most charities.
But here’s the thing: Even if you aren’t giving 100% of your profits back to the charity, I have very deep doubts about Google’s interest in checking, or even ability to check, whether you are doing so. Google Ad Grants is one of hundreds of initiatives/divisions within the company, and it’s not one that attracts many internal resources. It doesn’t make Google any money, and it never will. In fact, it’s a total loss-leader. The only gain Google derives from the Ad Grants program is goodwill and good publicity. Hence, very little manpower is devoted to Google Ad Grants from within. Even basic account help is almost nonexistent.
I’m not telling you to break the rules. You shouldn’t; the potential upside of selling products you aren’t allowed to sell doesn’t outweigh the potential downside of losing your Ad Grant. I’m simply saying that I don’t think this particular rule is policed very actively; thus, you should have no issues using your Ad Grants account to sell merchandise to your heart’s content.
Another reason merchandise is an exciting usage of Ad Grant money is the fact that a lot of the merch that nonprofits sell happens to be stuff that’s very low-margin and therefore doesn’t attract a lot of for-profit competition on AdWords. Calendars, coffee cups, T-shirts, CDs, DVDs, etc.: These are low-margin items that are simply impossible for a lot of businesses to sell using AdWords. If a company sells a pack of pencils for $5, how many clicks can they possibly absorb on AdWords before they’ve spent more in advertising than the retail price of the pencils? Not very many, that’s how many.
But wait. Let’s say you’re a nonprofit focused on LGBTQ rights, and you sell rainbow pencils emblazoned with your nonprofit’s URL. You sell them for $10 a pack (hey, they’re rainbow; you can price them at a bit of a premium). Let’s say your production/wholesale costs are $3 a pack, so you have $7 of profit for each pack you sell.
Guess who can now afford to bid $2 per click? You can! Profitability? We don’t need no stinkin’ profitability! You can spend $20 of Google’s money on every pack of pencils you sell if you want – that’s 500 packs of pencils sold, at $7 profit per pack – $3,500 in your nonprofit’s bank account. Sweet!
Or let’s say you’re a pet-rescue nonprofit (we work with several of these), and you’ve produced a calendar full of adorable puppies that you sell (with 100% of the profits coming back to your organization, of course) for $10.
Other big for-profit publishers sell a similar calendar for $10 also. But they have margins to make. Can they afford to bid $2 a click on a calendar for which they make only $5 of profit on each sale? Absolutely not. Even if they sold a calendar on every third click, that’s $6 of spend against $5 of margin. They’re in the red. Not gonna work.
But can you? Absolutely. You can bid and absorb $2 clicks all day long, because you’re not using real money. You’re using Google’s money, and you have $329 of it every day to spend how you like. Plus – bonus! – you have a much more compelling pitch to the searcher than your for-profit competitors do. Whom would you rather give your puppy-calendar money to: a huge publishing conglomerate or a real nonprofit that takes the money and uses it to care for the puppies in the calendar pictures? It’s a no-brainer.
So let’s do the math here for the puppy calendar project. Let’s say you make a $10 puppy calendar that costs you $4 apiece in printing costs, for a $6-per-unit profit. Let’s say you use your Ad Grant to bid on nothing but puppy-calendar-related stuff (because you can certainly do that if you want to).
Let’s be more realistic and assume that your clicks cost you $1.75 apiece (having to pay the full $2 per click is rare). Let’s also make the realistic, possibly conservative, assumption that out of all these people who are searching for “puppy calendar” and other such phrases indicating they want to buy exactly the type of puppy calendar you have, only 10% of them follow through and purchase one of your calendars after clicking an AdWords ad to check it out.
That’s one calendar sold, and $6 of profit, for every $17.50 of your grant money spent. If you spend your entire $10,000 monthly grant this way, that’s 571 calendars sold per month (for the mathematically challenged, that’s $10,000 divided by $17.50). So 571 calendars at $6 of profit each equals $3,426 of profit. Per month!
Not too shabby.
Those two examples probably explain very well why Google Ad Grants customers who sell merch excite me so much; it’s a very nice way to monetize the grant, which keeps them very happy and more than willing to keep paying us our measly $400 monthly fee to manage their Ad Grants account.
If you don’t currently sell any merchandise, the above scenario should make you rethink that and, if possible, add some merch to your offerings. Because what we’ve spelled out above is exactly this: By giving you an Ad Grant, Google is not only giving you advertising money, it’s enabling you to create/manufacture merchandise profitably – merchandise that doesn’t even exist yet.
Mindblowing stuff. Seems too good to be true, doesn’t it? But it’s true nonetheless. Long story short: Do not overlook merchandise when determining how to focus your Google Ad Grant marketing efforts.
ADVANCED TIP: Make sure that the “store” area of your nonprofit is located on your Ad Grants-approved domain and that it does NOT link off to another domain or store host. Remember that ads in your account must point to this domain, so you’ll want to have your store URL be http://mynonprofitsmainurl.org/snugglypuppycalendarstore or http://mynonprofitsmainurl.org/rainbowpencilstore or something like that. If you link off to an eBay store or Amazon or any other hosted e-commerce platform, you’re out of luck.
Happy selling!
— Josh Barsch is the CEO of StraightForward Interactive and the author of The Google Ad Grants Playbook: The Definitive Guide To Explosive Nonprofit Growth on Google’s Dime.