by Brady Opsahl
A smartwatch. A board game. A potato salad. What do these things have in common?
A smartwatch. A board game. A potato salad. What do these things have in common?
If you answered “successful crowdfunding campaigns” (or if you guessed from the title) you’d be correct.
 |
| One man's quest to make a potato salad generated $55,492 in donations |
Crowdfunding is the practice of raising funds by collecting money from a large number of people in order to fund some sort of project. It can be an great method of financing a project that traditional investors might find to be too risky. The internet, being host to many wonderful things, is no stranger to crowdfunding. Websites like Kickstarter, Indiegogo, GoFundMe, and many more facilitate crowdfunding campaigns for projects around the world. While the particulars vary from site to site, a crowdfunding campaign typically has a funding goal that needs to be fulfilled in a set amount of time. Users can donate as much money as they see fit, and in return they are promised rewards based upon the amount of their donation, should the campaign be successful.
 |
| Kickstarter, one of many popular crowdfunding sites |
It's important to note that donating to a crowdfunding campaign is not the same as buying something from a store. While many campaigns are created in order to realize the creation of a specific product, and oftentimes one of the reward tiers is the product itself, there is no guarantee that you will receive anything in return for your donation. Sometimes projects fail despite being funded, and sometimes the project creator will essentially take the money and run. So with all of the risks involved, just how are people persuaded to donate to crowdfunding campaigns?
We know that there are two routes to persuasion: the Central route, where people are influenced by the strength and quality of the argument presented, and the Peripheral route, where people are influenced by other factors such as a source's likability (Kassin 2017). While some campaigns may be immensely successful utilizing the Peripheral route and all but abandoning the Central, such as the potato salad example, the conclusions found in a paper by Ilya Tirdatov (2014) show that elements pertaining to both the Central route and Peripheral may be the key to crowdfunding success. By examining similarities found in textual descriptions of Kickstarter's highest funded campaigns, he created a hypothetical profile that included elements found in all 13 of the projects examined.
"Such a project description will establish the credibility of the project owner or his/her associates by referring to their expertise/experience ... and high standing in the field ... It will contain background information about the project ... along with a detailed description of the object of promotion ..., refer to its unique nature ..., and show both “practical” ... and “emotional” ... rewards to be obtained by providing donor support. The narrative will include forceful descriptive terms ... The testimonials from authoritative sources about the object of promotion, project, and/or project owner (where available) will be included as well .... The financial terms of providing donor support, discounts, shipping conditions, and other details will be clearly explained .... The project owner will also state why exactly the donations are needed and what they will be spent for. (Tirdatov 2014)"
So, we know that according to Tirdatov's research, a successful crowdfunding campaign will rely upon not only the reputation of the project owner (an example of the Peripheral route), but will also provide a strong, high quality argument containing detailed descriptions and background information (an example of the Central route). Of course, Tirdatov's research only focused on the textual descriptions of the Kickstarter campaigns. Many successful campaigns are also accompanied by a video that covers much of the same ground as the text description. An important difference to note is that a human speaker in the video may have some influence over a potential project backer's decision. Kassin (2017) shows us that a high similarity between a source and another person, as well as the physical attractiveness of the source increases that source's likability. The more likable the source, the higher chance it has of persuading someone.
In conclusion, there is no one way that successful crowdfunding campaigns use to ensure that their funding goal is met. It is through a combination of the two routes of persuasion that the success of these projects is found.
References
Kassin, S., Fein, S. & Markus, H. R. (2017). Social Psychology (10th ed.). Boston, MA: Cengage Learning.
Tirdatov, Ilya. (2014). Web-based crowd funding: Rhetoric of success.(Report). Technical Communication, 61(1), 3-24.
Images:
Great post! I think oftentimes people that donate to crowdfunding campaigns forget that what they are really doing is investing in a product. And just like in a (formerly) typical investment situation, crowdfunders can lose their investments. I think as we see more and more companies (game developers, I'm looking at you) turn to crowdfunding as a means of quick starter funds, we will be seeing an increase in persuasive techniques used to garner higher numbers of investments.
ReplyDeleteWhat do you think are the positive and/or negative implications of strangers being persuaded to fund campaigns on the internet? Do you think that these types of transactions should have any oversight?
I think that a lot of these crowdfunding campaigns are actually fairly good, you just tend to see examples of the bad ones a lot more because of the outrage when people get burned on their investments. I know that a lot of Kickstarters and such are for things like custom board games, where the developers have everything ready to go, they just don't have the financial means to print them.
DeleteAs for the oversight question, personally I am of the belief that people should do their research before making these kinds of decisions, and that if a project doesn't work out then sometimes they might've deserved to get ripped off. That being said, it isn't like there is no oversight on these websites. The article linked in the blog post talked about Kobe Red, a scam that was actually shut down by Kickstarter before the funding period ended.
I looked at the potato salad link and all I saw were comments about how people never got their t-shirt.. a great example of why donating to an illegitimate campaign may not be the greatest idea. That makes me so mad though! That the potato guy got over $50,000! I can't even begin to tell you all of the places it'd be better to donate to. I'm a little biased here but how about research for kid's with cancer or a freaking animal shelter. I don't get it. But then again, these people that donated to that probably never donate to anything else and only did in that situation because that guy had such a good, captivating persuasion technique. Maybe St. Jude should take a hint.
ReplyDeleteHaha, crowdfunding a potato salad. I wanna do that.
ReplyDeleteI've never done any crowdfunding before, but it sounds like a very cool investment. Especially if the project eventually comes to fruition. You have persuaded me to try it :)
Another aspect to this is more and more when people are in need financially I hear people say have you tried GoFundMe. I know one family that used it for 3 funerals in a year. They were all legitimate but what if it is not legitimate. You dabled in this and that would be my biggest worry. For the purpose of your post though it was a good post and when it comes to investing I think it's all a gamble. The uncertainty in what will be funded or successful I think stems from the uncertainty of people in general. Also as for the potato salad if it doesn't taste good then it won't sell and how do you taste it online. As you said there's no way to predict it. Just ask all those who have lost on Wall Street.
ReplyDeleteI found this topic to be very interesting. I feel as though crowdfunding has become such a normal thing in the past few years that people have stopped taking time to really think about all the potential for deceit and dishonesty. But it is a very good example of different types of persuasion and the best ways to get people on your side or to send you money.
ReplyDeleteIt would be interesting to analyze which types of persuasion are generally successful on which crowdfunding platform. For example, I've seen GoFundMe used mainly for individuals or families in need of money for medical expenses, funeral expenses, and so forth, so people who donate are not expecting anything in return, like they may be if they were funding a new business venture. I'd imagine that in order to raise funds for more personal reasons, you would have to rely largely on emotion as a persuader, as opposed to a more central route technique that may work on KickStarter.
ReplyDeleteInteresting topic talking about crowdfunding. I never heard of the potato salad crowdfunding campaign. Its amazing to see how different products can become reality because of this internet resource, as well as how ridiculous things go viral. I think how the campaign is funded depends on what the product is. As with the potato salad, this had to have been a peripheral route to persuasion. Comparatively, I would think a tech product would make better use of the central route of persuasion. But again, this could all come down to the person in general and what is more of an influence on them.
ReplyDeleteI haven't personally seen this but I've heard of instances in which people post their kickstarter campaign on social media and guilt all of their family and friends to contribute even if it's a cause they don't really care about. Obviously for larger projects like games, etc., this wouldn't work, but I've heard of crazy stuff like people asking for money for vacations. I think this is another side of crowdfunding, especially if it's a social expectation that everyone's friends should contribute to their campaigns.
ReplyDelete