Crowdfunding, as a newly developed finance source, are welcomed and being employed by an increasing number of founders. It allows new entrepreneurs, social projects advocates, or even artists to obtain funding from many individuals. With the development of crowdfunding intermediary service, some crowdfunding websites like Indiegogo and Kickstarter are even starting to launch commerce-management to better serve business starters (Clifford, 2015).
But simply based on the crowdfunding websites seems not enough, it is difficult to catch large amount of people who has no knowledge about crowdfunding thus don’t visit crowdfunding websites at all. Therefore, the way founders advertise and promote their projects worth shedding light on.
On the other hand, social media as an intermediate tool has been widely used to promote various types of projects in terms of NGO, marketing, charity, etc. It is reported that more than 90% of the companies use social media as a marketing tool and the top three commonly used social media marketing tools are Facebook (92%), Twitter (84%) and LinkedIn (71%) (Stelzner, 2011). As an intermediary, social media marketing can generate exposure for the business projects and improve search ratings with a very low expense. Comparing crowdfunding projects with those NGO, marketing or charity projects, they can be homogeneous from the aspect of business goals. And we have reason to believe the effective impact of social media on crowdfunding projects.
Scholars already noticed the importance of crowdfunding platforms and doing qualitative exploratory study on some crowdfunding platforms. The reason why people are motivated to participate crowdfunding activities is that social interactions can be realized through crowdfunding platforms. For project creators, they can gain feedbacks strengthening commitment to an idea. While for funders, they can feel connectedness to a community with similar interests and ideals. Scholars summarize this research as motivational crowdwork (Elizabeth M. Gerber, 2012).
Some other studies reveal the need to build a bridge between crowdfunding projects and social media. Previous research on the deterrents to crowdfunding success reveals that project creators are unwilling to participate crowdfunding activities due to fear of failure while supporters are due to lack of trust (Gerber and Hui, 2013). Therefore, the communication between project creators and supporters is urgently needed. It is suggested that the crowdfunding creators should maintain regular contact with their community of supporters through project updates and discussion boards (Hui et al., 2014). Both individual and territorial social capital impact on the success of crowdfunding projects and the two types of capitals interact with each other (Giudici et al., 2013). Based on these findings, social media can be a useful and effective mediator to bridge communication between fund-raisers and supporters, contributing to the success of crowdfunding projects.
In summary, based on previous research and the current crowdfunding market, we can widely guess there is an inferring impact of social media on crowdfunding. For both project creator, crowdfunding website and donator, it would be a great bonus, if not necessary, to integrate social media functions into their crowdfunding activities.
CLIFFORD, C. 2015. Indiegogo Launches Commerce Option for Successful Crowdfunding Campaign Owners [Online]. Entrepreneur. Available: http://entm.ag/17fN1lK.
ELIZABETH M. GERBER, J. S. H., PEI-YI KUO 2012. Crowdfunding: Why people are motivated to post and fund projects on crowdfunding platforms. CSCW Workshop.
GIUDICI, G., GUERINI, M. & ROSSI LAMASTRA, C. 2013. Why Crowdfunding Projects Can Succeed: The Role of Proponents’ Individual and Territorial Social Capital. Available at SSRN 2255944.
HUI, J., GREENBERG, M. & GERBER, E. Understanding crowdfunding work: implications for support tools. CHI’13 Extended Abstracts on Human Factors in Computing Systems, 2013. ACM, 889-894.
HUI, J. S., GREENBERG, M. D. & GERBER, E. M. 2014. Understanding the role of community in crowdfunding work. 62-74.
STELZNER, M. A. 2011. How Marketers Are Using Social Media to Grow Their Businesses. SOCIAL MEDIA MARKETING INDUSTRY REPORT.