Is Crowdfunding as a Social Media Strategy Here to Stay or Just a Passing Fad?

Have you heard about the Veronica Mars Kickstarter miracle? In just 11 hours, the ever-loyal fan-base of the cancelled show guaranteed that their favorite adult Nancy Drew-esque sleuth would return, this time to the big screen, to the tune of $2 million. The excitement for some is palpable. What exactly is crowdfunding? Is this the sign of a new way of doing things?

According to Wikipedia, crowdfunding is  “the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations. Crowdfunding is used in support of a wide variety of activities, including disaster relief, citizen journalism, support of artists by fans, political campaigns, startup company funding,motion picture promotion, free software development, inventions development, scientific research,and civic projects.” Kickstarter is one of many burgeoning crowdfunding websites that have appeared on the internet in the last few years. And while the Veronica Mars Kickstarter project is not the first of its kind (there are 31 crowdfunded films currently showing at SXSW), the sheer amount of money raised speaks volumes for the power of the voice of “the people.”

Take a look at the graphic from Loudsauce.com, a leading crowdfunded advertising platform. Crowdfunding does something that is every marketer’s dream: not only does a campaign encourage others to put forth their money for causes they believe in, you can bet these same donors are doing more than putting their money where their mouths are-they are spreading the cause through the power of social media. These donors are exposing the masses to the causes they believe in through Facebook, Twitter, blog posts and more. As Loudsauce.com sees it, crowd-powered advertising, especially for the arts and ideas that matter, is here to stay.

Advertisers have been taking notice of the trend, too. Have you seen the new Dodge Dart campaign? The idea is being touted as “The New Way to Buy a Car.” It’s quite a unique concept. Imagine a gift registry, but for funding the purchase of a car. The Dodge Dart registry lists car parts, ranging from inexpensive items like an antenna to pricey ones like heated seats, and anyone can sponsor a part. Aspiring Dart owners are encouraged to use their social media accounts to spread the word. They can appeal to Facebook friends and Twitter followers to contribute and publicly thank them for doing so. The registry has its downfall, including a 9% fee that can take quite a bite out of the funds raised for a car, but the concept has some merit. The Dodge Dart is the first compact sedan in Chrystler’s line-up in nearly seven years; however, it is entering a highly competitive segment that has many established strong brand loyalties. Sales so far have been disappointing and so one of the challenges has been getting the car on potential buyers’ radars. This is where tying in social media with the crowdfunding campaign could prove helpful, and with each update from would-be Dart owners, they’ll be helping to boost awareness of the car.

As with any trend, early adopters such as Veronica Mars will probably benefit more than late-comers. A recent study has shown that Kickstarter has seen a drop in the number of new projects, as well as a decline in the amount people who are willing to invest. While this can be attributed to any number things, of course, over-saturation of projects is an obvious factor. This is not to say that Kickstarter and other crowdfunding platforms are dead or dying. There is still much great potential that comes from harnessing the power of an audience that wants to see something accomplished, and marketers would be smart to continue attempting to focus this energy. Only time will tell what the future will hold for crowdfunding, but as the Veronica Mars fundraising venture has shown, the power of social media is nothing to be scoffed at.

 

Debbie Szwast
With 20 years of advertising and PR experience, Debbie Szwast understands the multifaceted nature of marketing. A true believer in the art of communication, she acquired an MBA in marketing and a Master’s degree in writing. Today, she calls on the knowledge she has gained over the past two decades to formulate big-picture strategies and execute comprehensive marketing plans for clients across the country.