One topic we’ve talked about a lot on KickstarterForum and CrowdfundingForum is the effectiveness of paid advertisements for crowdfunding campaigns. It’s a tough question, because every category, campaign, and product is different.
I hope this guide will help shed some light on the topic and I invite you to share your experience with paid ads for your Kickstarter or Indiegogo by commenting on this article.
CPC vs. CPM
CPC = Cost per click. It’s also sometimes called PPC (pay per click) or PPA (pay per action). Advertisements that fall into this category can include Google Adwords, Facebook Ads, Twitter Ads, and LinkedIn Ads. When you use this type of advertisement, you will pay for each person that clicks on your advertisement. Usually, this rate is dependent on the keywords and demographic you are targeting. For example, a click from the key words or from individuals interested in “auto insurance” might cost as high as $20 per click, because there are so many advertisers. If they keyword or demographic you are targeting has less competition, then the cost per click might be as low as 25 cents.
The average CPC in 2013 for google adwords was $0.92 – Hochman Consultants
The average CPC in Q3 of 2013 for facebook ads was $0.45 – SearchEngine Journal
The average cost per engagement for twitter ads ranges from $0.26 – $0.43 as reported here or according to a Twitter success story, can get as low as $0.22. Others report $.50-$2.00.
The average cost per click for LinkedIn Ads ads reported in this experiment (2013) turned out to be about $2.00, which is the minimum bid. Others report $3.20 to $3.80 per click.
CPM = Cost per mile or cost per 1,000 impressions. If your advertisement is viewed 5,000 times on a website and the CPM is $5, then you would end up paying $25 for that advertisement. Unlike CPC ads, you would not be paying per lead, but based on the volume of traffic. You can buy CPM ads on BuySellAds.com, ProjectWonderful, Adsella, and through private advertisement deals.
The cost per 1,000 impressions will vary based on the niche of the website and the amount of traffic it receives.
The average CPM in 2013 for google adwords was $4.70 – Hochman Consultants.
LinkedIn sets a $2 CPM minimum, but it can get as high as $16-$24 CPM for sponsored updates (source).
You can easily see the CPM for websites on BuySellAds and other sites based on their traffic numbers. For example, if it costs $30/30 days and they are getting 30,000 visitors a month, then the CPM would be $1.
You can see our advertising numbers here.
If you’re considering doing a cost per mile deal, then it’s important to get an understanding of click through rates for banner and text advertisements. If you’re paying $1 per 1,000 impressions and there is a click through rate of .10% vs. .50%, you would get 1 click vs. 5 clicks for those 1,000 impressions or be paying $1 vs. $0.20 per lead.
According to MarketingCharts, the average banner CTR is 0.08% – 0.10%. Flash-rich CTRs are about 0.25%. In my experience, the click through rate on banner advertisements depends on the relevancy of the advertisement ad how noticeable it is. I’ve seen click through rates ranging from 0.10% – 1%.
Advertising Case Studies
Using Facebook Ads (for Marketing a Kickstarter Campaign) – This article was written by Theresa Pridemore who ran the Flat Track Around the World Kickstarter, which raised almost $10k. It breaks down her use of Facebook advertising throughout the campaign.
“I gave our campaign a total budget of $120, since I was paying out of my own pocket and very curious to test the Facebook ad waters. In the beginning I primarily posted a regular Facebook ad linking to our Kickstarter, but over time I gave more and more funding to our Facebook page ad, primarily to our Mexico-centric ad, as it got the most results.
Overall, I think we spent about $93 of that on our Facebook page promotion. I think growing our audience by 600 people was totally worth it, especially since some of the returns we get from that endeavor are tangible to the success of our project as a whole.”
“Our ad that went directly to the Kickstarter page got fewer clicks, but it was still pretty respectable. I think we had something like an overall 0.13% click through rate, which, from my reading, is okay (though you can imagine such a low number does contribute to the impression that for many Facebook is not a pragmatic choice for advertising). We were closer to 0.18% on our Mexico-centric ad, which is a much healthier total.”
How to Suck at Kickstarter – This article was written by Zachary Citron who ran this electronic music Kickstarter campaign.
“I ran a super small Facebook ad as a test. I’d never done a paid advertisement in my life.
With $25 as my total budget, I set up an ad on facebook targeted specifically to Males (because, gamers) of ages 18-30 (because, they have to know what Chrono Trigger is) in the United States (because English), who like “Chrono Trigger” and “OverClocked Remix” (which is the largest video game remix website)…
As a result of this $25 ad, I received a pledge for $50 and a pledge for $25 That’s solid. I made a 3x return on my investment (it’s important to note that the return was in Kickstarter pledges so I actually never got the cash). If it maintained that rate of return, at about $900 investment on my part in Facebook Ads, I could have made the $3500 I was looking for…
I ran a Google Adword that did not do as well as Facebook (contrary to my expectations). I received 0 pledges from Google. I think this was a mistake on my part though — I ran the same Chrono Trigger ad, but most of the impressions came from Final Fantasy search results.”
How I raised $64,515 on Kickstarter, failed, and plan on doing it all over again soon – This article was written by Jack Marchetti who managed the 4 of a Kind – A Crime Thriller Set In Chicago Kickstarter campaign.
“Facebook Ads and Likes are pretty much useless. I launched with 1100 likes. About 111 are people I personally know. So 900 strangers basically. It didn’t provide much of any help. The best approach is still to grow your content organically. People that come across your page because of a clever post or picture or video and like it, will engage more with your content than if they clicked “like” in an advertisement.
Facebook is not useless, don’t misread here. The actual Ads and Like count are somewhat useless. We raised $17,000 from people who clicked on links from Facebook. The Kickstarter dashboard doesn’t allow me to tag links so I have no idea if they came from friends or possibly the ads I’m railing against. But my educated guess is that they did not come from ads at all.
[amount spent] $1100 Facebook ads. This included very early ads getting our Like count up to 1100 by launch. It also included “promoting” Facebook posts. Not many people realize that even though I had 1100 likes, only about 200 people ever see my posts. So you can promote it to 1000 or so for $15.00. Also, during the final week I spent close to $100 per day on ads. It didn’t help much at all.”
As you can see, crowdfunders experience with Facebook ads can vary. Not all Facebook ads will convert into pledges and some campaigns may convert better than others. For more reports on the use of Facebook ads, check out this thread on our forum.
If you’d like to get a better idea of results for twitter ads, click here.
Regarding the use of google adwords to drive traffic to a campaign, several creators have reported on their findings.
“In the final couple of weeks I ran a Google Adwords advert for the kickstarter. I have heard people preferring to do this and drive viewers onto a landing page that then forward onto Kickstarter, but I didn’t bother with this. i got a few very enthusiastic backers from doing the advert, worth it for the little I spent (~£50).” – Successful kickstarter – How I Ran the Campaign.
“Something I really regret was taking a traditional approach to promoting a non-traditional product. We started off using Google Adwords and were only targeting popular keywords like ‘men’s dress shirts’, ‘ties’, ‘tie-clips’, and even some fashion labels. Our strategy was to go for quantity (we wanted lots and lots of clicks) instead of focusing on relevancy. I think we really burned a lot of money by advertising to the wrong crowds. We should have spent more time learning Google Adwords and Analytics. Also we haven’t been keeping in touch with our customers – we should really be utilizing our e-mail list.” – (Eddie Tsai, Co-Founder)
Sponsored reviews and posts
When browsing around the web looking for niche blogs and relevant news websites, many creators have asked me whether or not it’s worth it to pay for a sponsored review or post, because a particular website won’t cover them.
Before paying for a sponsored review or post, I would first assess the traffic level of the website with Alexa to make sure that they are an authority in their field. You can also look at other sponsored posts and see if they received any comments or social media shares. You could also put their website domain into BuzzSumo (paid version – 14 day free trial) to see which articles on their site have the most social shares.
Next, I’d ask whether the links in the post are “follow or no-follow” meaning that if they linked to your website and it was a “follow” link, you would get some link juice, which is good for SEO.
I would also try to contact previous customers who have used their website, get a sense of reasonable traffic expectations from the company, and google the name of the site to see if there are any reviews online.
The main benefits of having a sponsored review or post is that, if the site has an audience, the post functions as a recommendation and will likely send some traffic your way. You can also submit that review to social bookmarking websites like Reddit and StumbleUpon and promote it on your own networks to indirectly advertise your campaign. In addition, you can put the logo of the company on your campaign page.
On the flip side, there is no guarantee that the traffic will convert into pledges or that their audience will be interested in your product. Unfortunately, there is no real way to minimize this risk, aside from talking to previous customers who advertised with them and had a similar campaign.
Social media promotion
There are more and more websites out there offering social media promotion for new products, startups, and crowdfunding campaigns. In my view, the main draw of social media promotion is that you might get a better rate or experience better engagement, than if you were to do Twitter advertising ($0.26 – $2.00).
When considering social media promotion, the most important aspect is the quality of the individual’s followers (not necessarily the number of followers). You can easily buy Facebook, Twitter, or Instagram followers online for a few dollars. That doesn’t mean they are engaged followers. Almost all will be bots.
If you are investigating a social media promotion company, look through their tweets/facebook posts and get a feel for how engaged their followers are. You can do a quick search on twitter to check other accounts that have mentioned their account with the twitter advanced search functionality.
Newsletters are a bit of a different animal than websites in terms of traffic and conversions because they are comprised of readers who have opted in to receive messages from the publication. In my experience, email advertisements and advertorials typically experience higher conversion rates.
According to MailChimp, the average email open rate ranges from 17-30% by industry and the average email click through rate is between 3-5%. Keep in mind that this data will vary from niche to niche and also depend on the size of the publisher’s email list.
I would recommend seeking out email lists that are connected to some kind of existing publication that has an engaged audience. Don’t buy random email lists and if the pricing looks too good to be true, it probably is.
Press Releases
Press releases are a form of advertising. They are essentially sponsored news. When crafting a press release, it’s crucial to remember that you are not selling to potential backers or customers. You are selling to a journalist. You must keep in mind the demographics of their audience and the types of stories they have covered in the past.
There are several companies that you can do press releases through:
PR Web – Owned by Vocus, PR Web is one of the more popular options out there and includes syndication and distribution options. Prices range from $99 – $499.
CrowdfundingPR (our site) – CrowdfundingPR focuses exclusively on crowdfunding industry, creator, and campaign news. Prices range from Free – $159.99.
PRNewswire – PRNewswire has been around the longest of these websites (1954) and services public companies and smaller companies. Their iReach platform is typically used by smaller companies. Pricing ranges from $129 – $349.
eReleases – eReleases focuses on press releases for small businesses. The pricing ranges from $199 – $499.
Also be sure to check out these free press release companies.
For more tips regarding PR, see: Facts to Remember When Pitching a Reporter about your Kickstarter Campaign
What about regular backers?
Is it possible to advertise to “regular backers” of crowdfunding campaigns? In my experience, the best way to reach regular backers is indirectly, either through their favorite blog or forum. There are also websites like KickTraq that have a good amount of traffic from individuals interested in Kickstarter campaigns that could be a good place to start. This blog has a pilot advertising program and there are a few other free advertising programs we have going on. You could also seek out advertising on sites that already are familiar with Kickstarter, like Board Game Geek.
Conclusion
Have you done any advertisements for your Kickstarter campaign? Let me know about your experience via comment!
