Study explores influence of social media on cr
The role of social media in the success of a crowdfunding campaign varies over time and is most helpful within the first 10 days of launching a campaign, according to a recent analysis by researchers at the University of Texas. in Dallas.
In a study published online Feb. 15 and in the February print issue of Interactive Marketing Journal, Dr. Brian Ratchford, Professor Emeritus of Marketing at the Naveen Jindal School of Management, and his co-authors examined the unintended dynamics of promoting crowdfunding campaigns via social media.
Crowdfunding is a method of raising money from individual donors through an online platform, and social media is a common channel to publicize these efforts.
Crowdfunding can be used to fund a business venture or to donate for an individual’s personal needs or to a non-profit cause. Sometimes when you support a business venture there is a potential reward, such as a share of the business or access to the business’s products.
“Our results indicate that the general pattern of behavior is the same for purely charitable campaigns as for campaigns that induce donation, suggesting that psychological motives are important for both types of campaigns and that the economic motive is not says nothing. the whole story,” Ratchford said.
The researchers collected data on 437 unique giving campaigns that had some activity during the study’s data collection period on GoFundMe, a popular online crowdfunding platform.
Donation campaigns on crowdfunding sites are created by individuals and can be promoted by sharing, tweeting and liking on social media, a relatively inexpensive way to generate interest. Since 2010, GoFundMe has announced that it has raised $15 billion for life events ranging from celebrations and graduations to accidents and illnesses.
The researchers analyzed data from 6,073 observations to estimate the impact of likes, shares, past donations and other variables on the number of donors and revenue per donor.
The three phases of donation
The study found evidence that donation-based crowdfunding campaigns do not follow a regular pattern of fundraising, but instead have three phases.
In the first phase, ie the first 10 days after the launch, potential donors have the choice to donate, to wait or to abandon the cause. Friends and family are very likely to donate.
Ratchford’s research found that potential donors are more likely to contribute late in a campaign if more than 70% of the goal has been met.
“The average number of donors, amount donated and amount per donor are the highest during this period,” Ratchford said. “If a campaign doesn’t work well initially, it’s unlikely to succeed.”
In the second phase, which takes place 11 days or more after the launch and with less than 70% of the goal achieved, potential donors are more likely to wait to make a decision. One influence on this is the bystander effect, a decision to donate only if the campaign goal is not met by others.
Another possible decision is to follow others and donate if many others donate. This tends to create a herd effect and a large influx of donations.
In the third phase, when more than 70% of the goal has been reached, potential donors are more likely to contribute because they find a campaign with higher cumulative donations more desirable or because their motivation increases as the campaign is getting closer to its goal.
“As with investment campaigns, there is a decided increase in charitable campaign funding as the goal approaches, even if GoFundMe campaigns do not end at a predetermined time,” Ratchford said. “It can’t be explained by economic factors, like not seeing a potentially profitable idea funded.”
Researchers found that if a campaign doesn’t reach at least 70% of its goal 20 days after launch, it’s unlikely to succeed.
The study also looked at slacktivism, the tendency to support a political or social cause on social media or sign online petitions but not engage in more meaningful activities to contribute to it. With crowdfunding, viewers can like or share on social media to get the satisfaction of participating, but not actually donate to the campaign.
This is an unintended consequence of using social media as a promotional tool and results in fewer donations but more social media engagement, Ratchford said.
“The simple act of clicking like can demonstrate concern and bring satisfaction that could have been obtained by making a donation,” he said. “We provide preliminary evidence that promoting charity campaigns on social media can lead to slacktivism, but a detailed study of this would require individual-level data.”
GoFundMe recently stopped using likes, which provides an opportunity for a before-and-after study, Ratchford said.
The research has implications for charity fundraisers and marketers.
“Make the campaign visible from the start,” Ratchford said. “Although we haven’t studied them, reminders could be a way to rejuvenate a flagging campaign.”
Co-authors of the study include Dr. Yashar Dehdashti of Texas Wesleyan University, Aidin Namin PhD’15 of Loyola Marymount University, and corresponding author Dr. Lawrence Chonko of UT Arlington.
Journal of Interactive Marketing
The title of the article
The Unforeseen Dynamics of Promoting Crowdfunding Donation Campaigns on Social Media
Publication date of articles
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