Crowd Funding 101: How to Maximize Your Online Campaign
Brandon Walter Irvine helps filmmakers crack the code of crowd funding.May 12th, 2011 | Brandon Walter Irvine
The Big Players and What Differentiates Them
Though the phrase “crowd funding” technically refers to any method that raises money from a large group of people, often with a stipulation of reaching a proposed goal or budget, for independent filmmakers and artists, the phrase most often refers specifically to two competing websites, Kickstarter.com and IndieGoGo.com.
Money raised through these sites is not an investment per se—contributors don’t get any financial return or stake in a project—so campaign creators (or for the purposes of this article, filmmakers) retain all creative control of their projects. However, one way filmmakers attract contributors is to offer rewards that take the form of memorabilia, unique gifts, or even credit in the film. Crowd funding websites are just that, online venues that connect filmmakers with financial supporters.
There are other crowd funding sites, such as Invested.in, but IndieGoGo and Kickstarter are much more often cited by indie film finance bloggers like Ted Hope or Jeff Steele. Though similar, the two platforms are also distinct. If your Kickstarter campaign doesn’t reach its funding goal by the deadline you’ve set, you don’t collect any of the money pledged. IndieGoGo, however, doesn’t have this restriction, so you will collect money even if you don’t make your goal.
Michael Cuomo, lead actor and producer on Happy New Year, helped attract $26,390 in contributions on IndieGoGo, and Kickstarter’s requirement was one of the reasons he selected their rival: “We weren’t in a position to raise 98 percent of the money and then risk losing it,” he explained to me. However, according to statistics on the past two years that Kickstarter released just recently, this scenario is very unlikely. As they noted on their blog, “Of the 20,000 projects that have launched, only one has been unsuccessful after reaching 90 percent of its funding goal.”
Of course, Internet traffic is an important consideration, and here it seems safe to say that Kickstarter has the advantage. Compete.com estimates that Kickstarter.com received almost 510,000 unique visitors from the US in March 2011, while its estimate for IndieGoGo.com in the same period was a bit above 111,000. Similarly, Alexa.com’s rankings of websites, based on data from the past three months, recently put Kickstarter.com at number 2,986 worldwide (with 1 being the best), while they ranked IndieGoGo at 15,638 worldwide.
Fees between the two sites are comparable, but of course even one percent may mean hundreds of dollars' difference in what you actually collect. While IndieGoGo’s fees are only four percent of the total raised, compared to Kickstarter’s five percent, the fee that IndieGoGo takes rises to nine percent if the project doesn’t meet its stated goal. Transaction fees will also reduce the amount actually received by campaign creators by a few more percentage points on both sites. So, for example, IndieGoGo’s FAQ suggests that every $100 contributed will mean about $93 dollars for you, with $4 going to IndieGoGo and about $3 going to credit card companies. Meanwhile, for every $100 pledged to your campaign on Kickstarter, you will receive somewhere between $90 and $92, with $5 going to Kickstarter and three to five dollars taken out by Amazon.com’s payment system, which is what Kickstarter uses to collect money. If you don’t make your goal, however, you receive nothing. (These figures are all for filmmakers and contributors in the US; international payment and transfer fees can only reduce what you actually keep.)
There are a few more ways in which the sites differentiate themselves. IndieGoGo’s co-founder and CEO Slava Rubin pointed out over the phone that anyone may post a project there, and with hard work, campaign creators can increase their “GoGoFactor,” a quotient the site uses to determine whom it will give a promotional boost to. IndieGoGo has also partnered with two organizations that can provide fiscal sponsorship for campaigns so that contributions are tax deductible. Contributions can be made tax deductible on Kickstarter, too, but the site doesn’t currently partner with other organizations to ease the process. Finally, Kickstarter only allows campaigns with US bank accounts and identification, while IndieGoGo can host campaigns based in other countries.
Campaigns Both Use and Build Project Awareness
Whatever the differences, however, it seems clear that the tactics used for fundraising on either site are similar, which only begs the question of what makes a successful campaign. For one, since both platforms have consequences for not making the funding goal, it’s definitely worth setting a realistic target. Keep in mind that many of the most successful campaigns—some have raised more than $100,000—have been able to exploit existing awareness and support. Before it became a feature-length film, Happy New Year had already been an off-Broadway production and a short. In another example, filmmaker Christopher Salmon attracted $161,774 in contributions on Kickstarter for production funds to turn Neil Gaiman’s story The Price into an animated short. Gaiman wasn’t directly involved in the campaign, but after he mentioned the project on his blog, “My e-mail just went crazy,” said Salmon. Even so, Salmon's goal was ambitious, and he only hit the goal 12 hours before the deadline ran out. Looking back, Salmon said of his success, “Most of it is Neil’s credibility.”
For some filmmakers, though, it may be a matter of tapping smaller, less easily identified groups. Cuomo and Happy New Year director K. Lorrel Manning exploited awareness of their cast members: “Noah Mills and Tina Sloan used their own fan bases,” explained Cuomo. They also got support from military personnel they had interviewed for the film, an example of how a natural fan base can develop around an issue film, especially with hard work.
In a recent conversation and in a bulletin on his website, Peter Broderick, a noted distribution strategist, touted the unusual success of the Kickstarter campaign for the film I Am I, which drew $111,965 in pledges at the beginning of the year, a big number for a project with an original script. As Broderick pointed out, director Jocelyn Towne was able to leverage existing fans of the actors: Both Simon Helberg, Towne’s husband and an actor on CBS’s The Big Bang Theory and Jason Ritter, from NBC’s The Event, used their Twitter followings to attract attention to her film.
For a project that needs to create interest from scratch, however, a crowd funding campaign might be more a matter of fielding an idea and building early support. Crowd funding “opens up opportunities for filmmakers to get feedback early,” Broderick said, about whether their project is appealing. He said that raising money shouldn’t even be the primary question on filmmakers’ minds when crowd funding. “They should think of it as a way to build awareness of their film, and secondly as a way to build support.” He put actual fundraising as third on the list of goals. As part of this awareness-building, he said, it’s very important that indie filmmakers develop a mailing list. Often, he finds, “They just do not understand the value of having a list of people and e-mail addresses in different points in the life of their film.”
The Experts on Making a Campaign Work
Another point Broderick emphasized was that goals should be realistic. Sheri Candler, a marketing and publicity specialist for filmmakers, has recommended on her blog, “Try raising $5,000 and see how you do,” noting that many successful film projects have a goal that’s below $10,000.
As for the presentation of the campaign page, it's conventional wisdom that the video posted on your campaign page is very important. “Every project should have a video,” said Kickstarter’s co-founder, Yancey Strickler in a phone interview, adding that 80 percent of projects have one. Broderick added that many campaigns have been successful because the video has personalized the campaign by including the filmmaker. He pointed to the video for I Am I as an excellent example: Jocelyn Towne, the director, guides the viewer through her apartment in a single four-minute take, using the producers and the stars in various clever gags.
The rewards are also important. “The $20 and $100 reward levels are the key reward levels,” Broderick explained. “The creativity in the rewards is important.” Happy New Year, for instance, sets reward levels named after military ranks, echoing the film's theme. This wasn’t the only way they used rewards deftly: While they could get personal favors from friends, Manning and Cuomo wouldn’t have been able to turn that kind of support directly into funds. So they used it as an opportunity to leverage non-monetary support.
Another common point made by veterans of crowd funding is that successful campaigns are hardly passive affairs. “You should be active the whole time during your campaign,” said IndieGoGo’s Rubin. Cuomo reiterated this sentiment, saying their campaign “was a full-time job.” His team made sure to write thank you letters within 24 hours. Regular updates, too, can prompt much greater interest and participation.
Crowd funding can often be a matter of putting effort into mobilizing a base, then expanding it into a larger audience. “You can’t just start and expect outsiders that don’t know to get involved. You have to convince your core audience,” said Invested.in CEO Alon Goren in a recent interview. In other words, it's a good idea to find influential people to advance the campaign through their social media power, especially since IndieGoGo’s Rubin estimated that you need 30 to 40 percent of your goal before strangers begin donating. Coincidentally, Kickstarter’s blog mentioned a similar figure in a related context: “Projects that reach 30 percent of their funding goal succeed more than 90 percent of the time.” Thirty percent of the goal might well be the tipping point.
Finally, while it may be tempting to drag out a campaign to maximize your takeaway, it may not pay off. Strickler said that projects on Kickstarter with a 30-day limit actually hit their goal more frequently than longer campaigns. “Momentum is more important than time,” he said. And one month might exhaust you, anyway. According to Christopher Salmon, “Thirty days is like 30 years on the Internet.”