Crowdfunding For Brands? Not For Us!

Young woman whispers in friend's ear

Crowdfunding is fashionable, but that's not why we like it. Crowdfunding allows ordinary women and men to support businesses they believe in, create value and share in the success and the profits.

But old-fashioned marketing types have hi-jacked crowdfunding and turned it into a way of making big, old-fashioned retailers look informal and adventurous and innovative.

This article is a warning to our readers - don't get fooled!

There's a story in Advertising Age this week about a product called "Three Jerks Jerky" and two others called "Soy Vay" and "Very Very Teryaki". The makers ran a promotion on Kickstarter to raise funds which they didn't need, for products they were already manufacturing.

First question: Who makes these names up?

"Sounds like blems watching Mad Men", says our office intern.  (We didn't ask.)  

Second question: what does this have to do with crowdfunding?

Nothing, as far as we're concerned. If you're interested in crowdfunding, you need to research it yourself. There's good projects and investment opportunities, but there's  a lot of terrible stuff out there. The bottom end of crowdfunding is the twenty-first century equivalent of sponsored walks and car-boot sales. And it doesn't help that advertising agencies have now decided it's cool to use pretend crowdfunding projects in marketing campaigns

"An Econsultancy blog noted that brands are increasingly using crowdfunding platforms to get market feedback and validation, but warned that this trend risked diminishing the value of such platforms if big brands overused them." commented the advertising research resource warc.com.

To each their own, but we want no part of this trend. We want to support small businesses and make a return on investment. 

So - add this to your skills, if you want to explore crowdfunding. Learn to distinguish a serious money-making business proposition from a humorous campaign to get you to buy a product. The easiest way to do that is to discern what the offer is. Not the business - the offer.  What's in it for you? What do you own, and what risks are you taking?

For more information about the use of pretend crowdfunding, here's some further reading from around the web.

Further Reading

How brands use crowdfunding For kick-ass marketing
(hint: you may be the ass that gets kicked.)

Why crowdfunding of brands is the future
(
of brands, maybe, but not of crowdfunding.)

Using crowdfunding as a marketing tool
(from the school of 'everything looks like a nail.')