People often assume that you simply launch a crowdfunding campaign and you’ll get $$$$ pooling in without having any extra expenditure.

This is not how it works.

Crowdfunding does require the spending of money but the good part is you can always recover that money spent by setting a goal that is three times higher than the money you spend. 

So let’s say, you have to spend $5000 on marketing, campaign creation, video shoots, photography etc, so your campaign goal should be at least $15,000 to cover up your costs, build your project and also earn some profit. 

When starting your crowdfunding campaign, make sure you are aware of the costs, hidden charges and other expenses involved. 

To help you, here’s a breakdown of all the costs you may incur during a crowdfunding campaign. 

Kickstarter vs Indiegogo Fees

This is a common question most people ask. Does Kickstarter charge more than Indiegogo or vice versa? 

Kickstarter and Indiegogo fees have the same structure. Both have a 5% platform fee of your total funds raised which you’re required to pay when claiming the funds. 

Both also have the credit card and payment processing fee which is usually set at 3 – 5% depending on the payment partner. 

So in a nutshell, you need to spend at least 8% as platform + payment fees. This 8% is from the total funding amount received. 

Assuming you raise $10,000, you’ll be paying $800 as platform fees + other charges. 

Creating Product Demos and Renders

If you’re raising a crowdfunding campaign to support the development of a product, then you’ll need to have a product demo made. This can be done by hiring a product design company to create 3D renders of your product and bringing it to life. 

The cost for product demos and renders varies, but expect a higher cost that starts from at least $3,000. 

Creating Product Prototypes

With so many crowdfunding campaigns turning out to be frauds and scams, people are now reluctant to invest in a product unless they are able to test it out. The same goes for journalists who will be covering your story. It’s not mandatory to create prototypes, but it’s beneficial because it shows backers you’re actually working on your product. 

The cost of building prototypes varies but it can start from $10,000 and go up to $30,000 depending on the complexity of the project and the company you hire. 

Multimedia Content

When you’re creating a crowdfunding campaign, you obviously need to create multimedia content like images and videos. You’ll need professional photography services as well as video editing/shooting services. 

Photography from a professional photographer could cost you from $200 to $3,000 depending on who you hire. 

Video specialists, i.e animators, editors, videographers are not cheap. It could cost you from $1,000 to $5,000. 

You could hire these specialists from freelance platforms so the price may be cheaper than hiring from a professional agency. 

Marketing & Advertising

You’ll need a marketing specialist or agency to take care of your press releases, social media advertisements, landing pages, and other assets. The more people know about your campaign, the more opportunities for funding. 

Marketing agencies can charge you up to $10,000 for growing your campaign. If you’re spending on ads, you’ll need to keep an additional $10,000 for that. 

Other Miscellaneous Expenses

Miscellaneous expenses include creating rewards for your backers such as badges, tee-shirts, or any other giveaway in return for their contribution. Small expenses like shipment, packaging etc should also be counted. 

You should be keeping a budget of at least $3,000 for all miscellaneous expenses. 

In Total

As you can see, running a crowdfunding campaign is not easy. Although crowdfunding is meant to provide you with financial support, it still needs money to deliver results. The trick lies in the funding goal you set for yourself. 

Considering all of the above expenses, let’s say you need to earn $150,000 if you’re spending $50,000. This is why we always recommend setting a higher funding amount so that you can get some extra cash to improve or build your product as you go.

Crowdfunding is super beneficial for companies that don’t want to go to investors or banks to fund their projects. However, a successful crowdfunding campaign is not run for free – you have to spend some to gain some. 

Want to know more? Feel free to reach out to us for details. 

Check out the videos below for more.

The post How Much Does it Cost to Run a Crowdfunding Campaign on Kickstarter and Indiegogo? appeared first on samitpatel.

Quick Post Overview Video ⤵️

 Most entrepreneurs pledge a goal that does not take into consideration their overall expense and end up going in the minus. What are some of the costs that you need to watch out for?

Let’s break it down. 

• Kickstarter Fees and Payment Processing 

Kickstarter applies a 5% fee to the funds collected for creators. Their payment partner Stripe charges 3 to 5% of payment processing fees. There’s an additional $0.20 fee for every pledge. In total, you have 8% of platform expenses.  

So, say you’ve got $10,000 pledged. 

You pay 5% of 10,000 = $500 

3% +0.20 cents of processing fees = $300 

Total = $800 of $10,000

Now, moving on to additional costs. 

• Crowdfunding Taxes

Funds generated from crowdfunding are seen as taxable income. Depending on where you live and the different tax laws that apply, you’ll need to figure out the taxable amount for your goal. You may even be required to pay sales tax from the amount you receive. Be sure to bring in your accountant and figure out the amount you may need to pay. You can do this before you launch your campaign (based on your goal) just to get an early estimate. 

• Campaign Design Fees 

Crowdfunding campaigns require the set up of page design. The cost of that ranges from $500 – $5,000 depending on whether you’re hiring an individual freelancer or an agency.

You May Also Like to Read:

What Happens When Kickstarter Campaign Fails?
How to Start and Launch a Kickstarter Campaign?
Can Kickstarter Be Used to Start a Business? Here’s Everything You Need to Know.

Additional costs may incur if you’re also planning to invest in social media advertisement, influencer marketing, PR, networking or conferences. 

Your costs could shoot up significantly, so make sure that you have enough budget to spend on these activities and that the ROI is at least 2X times of what you’ve spent. 

• Professional Photography 

Photography is, of course, a necessity. Most people overlook photography assuming that they can take pictures with their phones, apply some filters and the job would be done. 

If you truly want results though, you will need to have professional photography done, especially if you’re using crowdfunding to fund a product. 

Photography could cost you anywhere from $300 – $3,000 again depending on who you hire for the services. 

• Videography & Video editing 

Videos are a fundamental part of your campaign. Whether it’s on your main campaign page, your social media or your website, you’ll need the help of videos to talk about your product. 

You’ll need a videographer who will be professionally recording and editing your video. You could hire people locally or you could hire them online. 

Video recording and editing costs run from $300 to $10,000 depending on the type, intensity, duration and type of service hired. 

Running a crowdfunding campaign is expensive and could bleed you dry if you don’t carefully plan your expenses. You’ll need to factor in all these expenses and pledge them as part of your goal. 

 , it’s not just the Kickstarter fees that you have to look into. It’s also all the additional costs that you will face during the execution of your campaign. 

Got any questions regarding Kickstarter fees and other costs? Call us or drop us an email! 

The post Kickstarter Fees and Additional Costs You Need to Know When Launching a Crowdfunding Campaign appeared first on samitpatel.

To capture a chunk of that audience is every marketer and business owner’s DREAM.

The only way you can achieve that dream is by mastering Facebook ADVERTISING.

Facebook advertising is one of the most challenging features of digital marketing after PPC ads. It’s competitive. It’s complex. It’s nerve-racking. Yet, it’s also one of the most powerful platforms that offer you the ability to reach your target audience directly. Since it’s so extensive in nature, we’ll be covering this in three parts. You can read the first part here to get a preliminary understanding of how to use Facebook as a marketing funnel.

Setting Up Your Facebook Page

The first step to running a successful Facebook ad campaign is setting up a successful Facebook page. It is highly recommended that your Facebook page is active with regular posts and engagements, ‘before,’ you run an ad campaign. Why do you need to do this? Because your audience wants information about your business before they decide to do business with you.

Here are a few things to do before you initiate a Facebook advertising campaign.

✔️ Setting up a page: To run a Facebook ad campaign, you need to have a facebook page. Setting up a page is just a matter of seconds. All you have to do is click the Create Page option in your personal profile, enter your page name, choose your business category, upload your company logo and cover photo. Done! You now have a page ready.

✔️ Uploading business profile & cover photo: Use a 360×360 pixels profile photo size. If you’re a business, your logo is your profile picture. Your cover photo can be a graphic with your business tagline or caption. It can also be a short video that introduces your business.

✔️ Create a complete profile: Nothing is more annoying than incomplete information. Make sure you have your address, About Us section, Photos, Demo videos, and every other information ready on the profile before you invite friends or share information.

✔️ Create consistent branded posts: Facebook content is mostly image-based, so, you should either have a designer on board who can help you with branded posts or you can try your hands at Canva, a free design tool. Ensure consistency in terms of fonts, brand colors, and other design elements.

✔️ All relevant links/CTAs: Make sure your phone number, landing page URL and CTAs are ready and are connected to your FB page. The most important is your landing page or website.

✔️ Put up some posts: As soon as you have your page active, begin posting. Use an editorial calendar to plan your posts for at least a month in advance of running an as campaign. You should ideally have 4 to 5 posts a week divided into various types – a blog link, a quote, a meme, some inspirational stuff, etc.

✔️ Use Facebook’s Schedule Post Option: Now that you have your content ready for all the days, it’s time to post it on Facebook using the Schedule Option. Initially, you’d have to use tools like Buffer or Hootsuite to schedule posts on FB, but now, the channel has a pretty good and easy-to-use schedule option. You can schedule posts in advance. This leaves you free time to monitor and measure your posts.

✔️ Posting schedule: Experts recommend a posting schedule of maximum two times a day, focusing on when your audience is most active. You can obtain information about your audience from Facebook Insights.

✔️ Invite friends: Once you have a few content pieces ready, start inviting your friends to like your page and share your posts on their newsfeed. The more people share your page, the higher your chances of getting likes and engagement.

✔️ Super Important: Whatever you do, DO NOT BUY FAKE FOLLOWERS. They are ineffective and can even possibly drag your engagement rates down.

✔️ Familiarizing Yourself with FB Page Manager: The FB page manager is a full-fledged business tool. It has an extensive list of options. From assigning page roles (important when you hire a social media manager to handle your account), to monitoring and measuring insights. Familiarize yourself with the options of the page manager given in Settings. For example, cross-post (posting one piece of content across several channels) without using any third-party tool. There are some great functionalities you can use to optimize your page. All you need is to spend time exploring each option.

✔️ Page Insights: One of the most important features is the Page Insight. These are metrics that give you insights on page views, page likes, page followers etc. What’s the most crucial is you can actually see which of your post has been the most popular throughout the week. This information can help you get a very accurate idea of what your audience prefers to see on your page.

✔️ Delegating social media management: Facebook management is a full-time job and if you were to do this with other channels, it will eat up your whole day. My best advice? Hire a social media specialist from Upwork, share your goals and expectations, assign them a role on the page, bring metrics on an excel sheet and use your time to focus on business or product building.

Beginning with Facebook Advertising

Right! So you’ve got your page set up, great posts going out and have a fair amount of engagement. Now you want to grow and you’re venturing into Facebook ads for crowdfunding.

Let’s go through it step by step.

Creating Ad Objectives

It’s always important to narrow-down your business goals before you start an ad campaign. You have to know why you want to run a certain ad type and what is your end goal.

For example, if you’re a new business and want to gain traction, Page ads may be a good choice. If you’re an established business, you may have deeper business goals, such as attracting leads or increasing sales.

Facebook categorizes most business goals into three broad or common objectives which are:

✔️ Awareness: If you’ve launched a new business or project, your first goal or objective may be to help your target audience know about your business. For example, you’ve launched a new bookstore in town and want to inform your audience. Your first campaign would be an awareness post informing your audience about the bookstore and the benefits of buying books from you.

A narrower goal of awareness is maximizing your brand visibility and reach. This means running a campaign that caters to a wide audience demographic just to get the initial buzz going. So again, back to the bookstore example. This time, your goal may be to attract a national audience with online ordering. Awareness is a fundamental objective of any new business, product or service. It’s the first step you can take to attract your target audience.

✔️ Consideration: The second objective is to help your audience find out more information about your product. The consideration objective uses your website or landing page to help people find the information they need to consider buying from you.

Narrower goals of consideration can be driving traffic to your website, getting your app installed, getting people to engage with your posts, collecting leads and signups, connecting with customers and encourage their interest in your business.

✔️ Conversions: The most important objective for every business investing in Facebook ads is conversions. This is the phase where you want people to make the purchase via your website or online shop. In the case of crowdfunding, this is where you want people to fund your project.

You May Also Like to Read:

How to Carry Out Research for Your Crowdfunding Campaign – Part 1
How to Use Facebook Marketing to Boost Your Crowdfunding Campaign – A Beginner’s Guide, Part 3

For conversions, you could have goals as getting people to buy from a discount offer, leading people to specific products in your store, or giving them incentives to purchase from your brick and mortar store.

The narrower your objectives, the better you will be able to create effective ads.

Eleven Types of Facebook Ad Formats

Facebook ads can be categorized into eleven main elements (as of 2019). You can employ multiple formats depending on your ad objectives. Each ad format forms an ad set which is tied to the ad campaign.

✔️ Video: Smartphones have allowed people to create high-res videos seamlessly. This has led to an increase in video consumption with nearly 45% of people watching more than an hour of Facebook or YouTube videos a week. Video ads are one of the most powerful ways to attract your new audience, provided it is creative and thought-provoking.

✔️ Images: Image ads are super popular with e-commerce stores. There are the easiest to make and do not take more than a few minutes to execute. One powerful image can play a significant role in traffic generation and lead conversion. Facebook allows for normal JPG and PNG images as well as 360 Panorama images that you can use to give your audience an immersive experience.

✔️ Collection: Have a variety of products to show? The collection ad format lets you display your product catalogue when you run the ad. This means if you want to showcase your new arrivals or the different versions of your product in one ad, you can easily do so with the Collection format. You can combine the main video with these products and the ad will be displayed in the form of a grid. This kind of ad is highly effective in getting your users to convert!

✔️ Carousel: Want to showcase ten images or videos within a single ad, each with its own link? The carousel ad format does exactly that. This is a perfect ad for businesses that want to show a process, a collection catered to individual tastes or simply a sequential story.

✔️ Slideshow: Slide-shows are basically a collection of your top-images turned into a video format. So if you don’t have the budget to create a professional video, you can use the Slideshow option to gather your best images and turn it into a facebook video. The perfect solution for those who cannot create a video.

✔️ Instant Experience: Known previously as Canvas, Instant Experience uses the mobile’s full screen to display the ad. This ad format supports all of the formats above – be it a carousel, a collection, video or images; it’s main purpose is to grab the attention of the user and give them an enriching brand experience.

✔️ Lead Generation: Want to get people to sign up directly to your website? Use a lead-gen ad. You can create an ad with a basic form that asks for name, email address, and zip codes. This is the right ad to use if you want people to sign up for your newsletter or to avail a seasonal discount etc.

✔️ Post Engagements: Post engagement ads are simpler and more classic forms of Facebook ads. You can use these to promote a post on your page to get likes, shares and comments. Most businesses use post engagement ads to gain traction over a specific post.

✔️ Offers: Have a special deal coming up? The Offers ad format lets you create an offer right on Facebook itself. You don’t have to use any landing page or website to create an offer on FB, although you can make it creative by using a carousel or slideshow to make the offer attractive.

✔️ Event Responses: Have a special event coming up? Use the Event Responses ad format to create ads that specifically gives information about your events including time, date, location and any other important information. This is a great feature for social causes like marathons, walk-for-a-cause, and any other local activity.

✔️ Page Likes: This is the most basic form of Facebook ads. To do this, you simply go to your page and Promote it using the Promote option. Your FB page will appear as an ad. If you’re new to Facebook ads and want to experiment with how it works, you can start off by first promoting your page to the relevant target audience.

With so many options and features, Facebook ads are complicated, but they also offer a world of opportunities through strategic advertising. It is highly recommended that you spend time learning about each of these ad formats and how they can cater to your fundamental goals.

Follow us as we continue the discussion on Facebook ads in Part 3 of the guide or Need help to boost your crowdfunding campaign? Hire our crowdfunding marketing agency today.

The post How to Use Facebook Marketing to Boost Your Crowdfunding Campaign – A Beginner’s Guide, Part 2 appeared first on samitpatel.