The effect and motives of using social
media on crowdfunding
Bachelor Thesis BSc Economics and Business – Business studies University of Amsterdam by Stefan Pel (10564098) under supervision of Willem Dorresteijn Amsterdam, The Netherlands2
Abstract Starting businesses engage in new ways of funding their businesses. Start ups use crowdfunding to obtain the necessary capital to start. Social media is used to promote the campaigns. Former research has proven that social media and crowdfunding are related. This study builds on these studies and explores what effect the three biggest social media sites; Facebook, Twitter, and Instagram have. Especially relevant for starting Kickstarter project owners, this study analyzes the effect of using social media on crowdfunding projects. In addition to the relationship of social media and crowdfunding, underlying motives of using social media come to light. Data is extracted from the Kickstarter website and the social media websites. A total of 54 projects are analyzed. The data is analyzed using correlations in SPSS. In addition to the relationship of social media and crowdfunding, a case study is presented to get the underlying motives of using said social media. This is analyzed using the uses and gratification theory (Katz, 1959). For the case study, a survey is sent out to the owners of one project. The findings of this paper are not conclusive, although it has some interesting findings, implications are that the sample size is not big enough to share significant results. This study presents a minor significant correlation between using Instagram during the crowdfunding campaign and the result of the crowdfunding campaign. This research can be improved by analyzing more projects. The originality of this research is that it studies three social media at the same time and also analyzes the amount of posts and likes/followers on these social media.
Statement of Originality
This document is written by Stefan Pel who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.Table of contents 1. INTRODUCTION ... 4 2. LITERATURE REVIEW ... 6 2.1 CROWDFUNDING ... 6 2.2 SOCIAL MEDIA ... 7 3. CONCEPTUAL MODEL AND PROPOSITIONS ... 11 4. METHODOLOGY ... 15 4.1 DATA COLLECTION AND ANALYSIS ... 15 5. RESULTS ... 17 5.2 GENERAL STATISTICS ON THE USAGE OF SOCIAL MEDIA ... 17 5.3 INFLUENCE OF THE USAGE OF FACEBOOK ON PROJECT RESULTS ... 18 5.4 INFLUENCE OF THE USAGE OF TWITTER ON PROJECTS RESULTS ... 19 4.5 INFLUENCE OF THE USAGE OF INSTAGRAM ON PROJECTS RESULTS ... 20 6. CASE-STUDY: DRINK-O-TRON: THE DRINKING GAME OF KINGS ... 22 6.1 THEORETICAL FRAMEWORK ... 22 6.2 METHODOLOGY ... 25
6.3 PROJECT INTRODUCTION: DRINK-O-TRON: THE DRINKING GAME OF KINGS ... 26
6.4 PROJECT ANALYSIS ON KICKSTARTER ... 26 6.5 PROJECT ANALYSIS ON SOCIAL MEDIA ... 29 6.5.1 Project analysis on Facebook: www.facebook.com/drinkotron ... 29 6.5.2 Project analysis on Twitter: www.twitter.com/DrinkOtron ... 32 6.5.3 Project analysis on Instagram: www.instagram.com/drinkotron ... 35 6.6 MOTIVES OF PROJECT OWNERS FOR USING SOCIAL MEDIA ... 36 6.7 CASE-STUDY DISCUSSION AND IMPLICATIONS FOR FURTHER RESEARCH ... 37 7. DISCUSSION AND IMPLICATION FOR FURTHER RESEARCH ... 39 REFERENCES ... 41 APPENDICES ... 44
APPENDIX A: DATA-SET ON KICKSTARTER PROJECTS ... 44
APPENDIX B: SURVEY FORM FILLED IN BY DRINK-O-TRON ... 49
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1. Introduction
Today, social media have a great impact on people communicating and creating networks. Social media use mobile and web-based technologies to create platforms via which consumers generate and discuss user-generated content (Kietzman, Hermkens, McCarthy, & Silvestre, 2011). Consumers are no longer passive in the marketing exchange process and take an active role in the process, from design to promotion (Berthon, Pitt, McCarthy, & Kates, 2007). Small businesses often face difficulties when applying for necessary capital (Carter & Rosa, 1998). Startup companies have difficulty to fund their businesses just after starting (Cosh, Cumming, & Hughes, 2009). Especially for fresh start ups, it is difficult to gain trust and find sources of capital. Traditional ways of fundraising are applying for funds at a bank or foundations. Therefore, these businesses often use savings of the entrepreneur and his family or friends (Voelker & McGlashan, 2013). This will mostly lead to the fact that these businesses are under-capitalized and therefore have a greater chance of not making it. To overcome such debacle, other ways of raising capital have increased in importance. In contrast to traditional ways of fundraising, crowdfunding is a relatively new and atypical type of fundraising for startups. Crowdfunding can be explained as “an open call, essentially through the Internet, for the provision of financial resources either in the form of donation or in exchange for some form of reward and/or voting rights in order to support initiatives for specific purposes” (Belleflamme, Lambert, & Schwienbacher, 2014). Previous research has shown that social media and crowdfunding are related (Etter, Grossglauser and Thiran (2013). Among others, they studied whether social media indicators influence indicators on crowdfunding. The research only used “tweets” as one of the predictors for crowdfunding success. Other social media (Facebook and Instagram) have not been researched thoroughly enough. Kickstarter is one of the two major platforms used for crowdfunding next to Indiegogo. Kickstarter offers a platform to entrepreneurs as they ought to gain funding through these means. In total $ 2,461,015,365 has been pledged to Kickstarter projects as of June 2016. There have been 108,053 successfully funded projects (Kickstarter, 2016a). Kickstarter offers 15 different categories for projects including art, design, fashion, games, and technology. Since it’s introduction in 2009, public interest in Kickstarter has drasticallyincreased. On Google search, “Kickstarter” has been searched more in comparison to two other forms of capital sourcing, “small business loan” and “venture capital” (Voelker & McGlashan, 2013). Particularly interesting for Kickstarter projects starters, this research answers the question whether social media sites help crowdfunding projects gain more funding. The complete research question is as follows: How and why do social media sites help projects gain more funding on Kickstarter? This question is separated in two sub-questions. The first question is whether social media does have a positive relation to the projects results on Kickstarter. This question is answered in the first part of this research. The second question is a combined question of how and why social media sites help projects gain more funding on Kickstarter. This question is answered in the second part of the research, in the case study. The case study has a separate theoretical framework and methodology. This study is especially relevant for project owners on Kickstarter that want to improve their results on Kickstarter projects. Additionally, as both the concept of crowdfunding and social media are relatively new, this study will build on prior research to provide a more stable basis for further research. This paper is structured as follows; in chapter 2 the relevant literature on both crowdfunding (in section 2.1) and social media (in section 2.2) will be discussed. Chapter 3 will consist of the propositions formed from previous studies and the conceptual framework aiding the first part of the research. Chapter 4 will address the methodology used in the first part of this research. I will present the results of the first part of the study in chapter 5. In chapter 6 the second part of the study presents a case-study with its own theoretical framework (in section 6.1) and methodology (in section 6.2). The discussion of the case study is placed in section 6.7. Finally, in chapter 7, the general discussion about the whole research (first and second part) takes place. In this chapter, there is also room for any implications and improvements for future research.
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2. Literature review
To provide a basis for this study, this chapter will provide an analysis of relevant literature of both crowdfunding and social media. Social media and crowdfunding are both fast-changing subjects that are relatively new. This chapter is structured as follows: first the concept of crowdfunding is explained and explored. Among other things, the different crowdfunding platforms and crowdfunding models come to light. Next, in section 2.2, social media theories will be presented in order to understand the impact of social media on crowdfunding. 2.1 Crowdfunding In contrast to traditional fundraising types, crowdfunding uses small bits of funding from a large number of funders. Crowdfunding involves three parties; project initiators (that need funding for their projects), ‘backers’ (that support projects), and crowdfunding platforms that bring the two mentioned parties together. The platform can therefore be seen as a kind of marketplace that brings supply and demand together. In broad terms, a project creator sets a goal for the project and the backers can fund small bits of this goal. Most projects provide a set of rewards the backers can choose from. These rewards are often in the form of the final product or service but with great discounts in comparison to the selling price of the final product. Kickstarter and Indiegogo are two many platforms available for crowdfunding. In addition, Kickstarter has the highest amount of funded projects to date (Kickstarter, 2016a). Crowdfunding platforms can choose from two different crowdfunding models (Veuger, 2015). Platforms either use “All or nothing” or “Keep it all” types of funding. The first type of funding is where project creators set a goal for their projects and when the goal is not reached because of insufficient funds, the pledged funds will be refunded to the backers and the creator receives nothing. The second type of funding is where the project owner gets to keep all the funding they receive regardless of whether the project succeeds or not. Kickstarter and Indiegogo use different funding models. Kickstarter uses the ‘All or nothing’ type of model and Indiegogo uses the “Keep it all” type of model. Due to the fact that Kickstarter uses the AoN (All or nothing) type of funding, the success rate on thisplatform is higher (Veuger, 2015). This research will be using the Kickstarter platform as a basis. This paragraph will explain how Kickstarter works. Everyone with a certain idea can go to the Kickstarter website and start a project. This project creator chooses a category and a sub category. Kickstarter offers a total of 15 different categories for projects: Art, Comics, Crafts, Dance, Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Publishing, Technology, and Theater. Next, the project initiator gives his or her project a title and a short description. The most important step is to set the goal of the project. Of course, the goal of a certain project is based on the needs of the project. Smaller projects need less funding than bigger projects. The categories vary greatly in the average amount of goal set by the project creator. In this research for instance, the category Music has an average goal of $4,100 and Technology has an average goal of $32,538. Consequently, a larger goal means that the project needs to attract more backers or receive more funding per backer in order to succeed. After setting a goal, the creator should decide on the project time. This is the time (measured in days) the project is online and open for funding. The duration is mostly connected to the amount of the goal. Often a lower goal means a lower duration. The Kickstarter page can be improved by using multiple photographs or videos of the product/service. The project owner can choose to link his personal Facebook page to the project. In addition to this, the project owner can insert a number of links to websites and other social media accounts. 2.2 Social media Social media is a relatively new phenomenon that has become apparent since the beginning of this century. In quite a short time, social media has taken over our social life. Previous research often speaks of social media, web 2.0 and user-generated-content as it were the same. Although the three concepts are interdependent, to understand what social media really is, the differences between them are important to note. The terms social media and web 2.0 are more than often used interchangeably, because they are closely related (Berthon, Pitt, McCarthy, & Kates, 2007). Web 2.0 serves as the technical basis that is necessary for both social media and user-generated-content (UGC). Social media can be
8 Social media is a broad term that incorporates different types of media. As described by Kaplan and Haenlein (2010, p. 61), social media are ‘a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content’. Social media include a variety of formats including social networking sites (Facebook, Instagram and LinkedIn), creativity works-sharing (YouTube), collaborative websites (Wikipedia), and microblogging sites (Twitter) (Mangold & Faulds, 2009). Social networking sites as defined by Kaplan and Haenlein (2010, p. 63) are “applications that enable users to connect by creating personal information profiles, inviting friends and colleagues to have access to those profiles, and sending e-mails and instant messages between each other”. In this research, the terms ‘social networking sites’, ‘social network sites, ‘social media’, and ‘social media sites’ are used interchangeably. These times, many social networking sites exist and they all vary in scope and functionality (Kietzman, Hermkens, McCarthy, & Silvestre, 2011). Some platforms are used by the general mass population, like Facebook for instance. Other social media sites including LinkedIn, focus on establishing a professional network and are mostly used by companies and employees. In 2014, 71% of online adults in the United States use Facebook, 23% use Twitter and 26% use Instagram (Duggan et al, 2014). The interactive parts of social media have changed customers from passive observers to to active contributors. The social media platform serves as an ideal place for product and brand promotion (Chu & Kim, 2011), customer-led content generation (Vivek, Beatty, & Morgan, 2012) and customer-created product innovations (Hoyer, Chandy, Dorotic, Krafft, & Singh, 2010). These are some of the functionalities of social media. Especially the possibility for product and brand promotion is important for this study. Chu & Kim (2011) studied consumer engagement in electronic word-of-mouth in social networking sites. Social networking sites represent an ideal tool for electronic word-of-mouth, as consumers create and share brand-related information in their social network (Chu & Kim, 2011). Advertising on these social media sites gets customers to take part in social interactions by commenting and liking. Electronic word-of-mouth in social networking sites is there to establish and maintain social ties with friends, family and others. Social networking sites can help their social connections with purchase-related decisions (Chu & Kim, 2011).
Mangold & Faulds (2009) argue that social media is the new hybrid element of the promotion mix. Social media, they say, have two interrelated roles in business. First, social media can be used by companies to interact with consumers, and second, consumers are able to talk to each other using social media. The second role of social media is a supplement to the traditional word-of-mouth communication. The ability of consumers to talk each other through social media limits the control that companies have over the content and dissemination of information (Mangolds & Faulds, 2009). Mangold & Faulds (2009) further emphasize that consumers like to build a network with people that have similar interests and desires. Companies should therefore create communities of like-minded individuals in order to let them talk to each other and share their ideas. In this research, we could replace companies by project owners which results in a better network for consumers that are all interested in the same product or service. Kickstarter does already provide such networking platform in a way. The Kickstarter website connects individuals who like to either create start-up ideas or fund these ideas. With the help of other social media, this network can be optimized, especially when project owners use multiple social media at the same time. Lastly, Mangold & Faulds (2009) state that customers feel more engaged with products and organizations when they are able to submit feedback. Feedback is not necessarily a good thing. If an individual customer is dissatisfied with the product or service, the whole world can read along and share this negative experience. On the other hand, if the company will address the problem and solve this, the world watches too. The three social media sites that will be included in this research are Facebook, Twitter and Instagram. In total, more than 3 billion people have access to the internet, which is around 46% of the world population (Number of Internet users 2016, 2016). This again, shows the importance of social networking sites in our daily life. Facebook and Twitter are as of June 1, 2016 respectively the most popular and second most popular social media platforms worldwide. Instagram is the eight most popular social networking site (eBizMBA, n.d.). Launched in 2004, Facebook is one of the most popular social networking sites in the world. Facebook’s mission is to ‘give the people the power to share and make the world more open and connected’ (Company info | Facebook Newsroom, 2016). As of march 2016,
10 world. Facebook started out as a network site for college students from Harvard, later spreading to Stanford, Columbia and Yale. Next, Facebook was available for all people, not just students. Today, Facebook has emerged from a simple network site for college students, to a social network site used by companies to interact with their customers. Twitter is an online social networking site or service that allows users to send and read short 140-character messages called “tweets”. Launched in 2006, Twitter has 310 million monthly active users as of march 2016 (Twitter, 2016). Twitter’s mission is ‘to give everyone the power to create and share ideas and information instantly, without barriers’. The CEO of Twitter, Jack Dorsey, collaborates that the restriction of 140 characters ‘inspires creativity and brevity’ (Jack Dorsey, 2016). Instagram was released in 2010 and is an online photo- and video-sharing and social networking service. Instagram enables users to share photo’s publicly or privately. The social networking site was later acquired by Facebook in 2012.
3. Conceptual model and propositions
Until now we have seen that both crowdfunding and social media are booming. As crowdfunding existed before the emergence of social media, the two are not interdependent. The purpose of this research is therefore is to analyze the influence of social media on crowdfunding. The ultimate goal for a project is that it succeeds. But what exactly is a ‘successful’ project? Success can be measured in different ways: as the percentage of the total goal that is set by the project initiators, as the total amount of money that is pledged, and as the number of backers. These indicators are interrelated; a higher amount of backers will likely lead to more funding which contributes to a higher percentage funded (Hekman & Brussee, 2013). On Kickstarter, project initiators themselves decide on a certain goal. Of course, this goal varies by the needs of the project. Smaller projects mostly have goals under $10,000. In comparison, larger projects can have funding goals of $250,000. The higher the goal, the more funding is needed to make the project a success. To measure this success, this research will use the percentage funded of a certain project. If a certain project is funded 100%, then the goal is exactly met. It is also possible for a project to gain more funding than the set goal. There have been projects that have doubled their initial goal and end up with a funding percentage of 200%. A projects that has been funded 100% or more is classified as ‘succeeded’. When the percentage funded is below 100%, the project classifies as ‘failed’. In order to get to the % funded, I simply divided the amount of funding for a given project by the stated goal by the project owner. For the indicators of the social networks, I used three general known social media: Facebook, Twitter, and Instagram. There are different indicators for the three different social networks. Facebook works with likes, the more likes on the Facebook page, the more popular it is. Twitter and Instagram work with followers, the more followers, the more people are interested in the social media account. The crowdfunding platform Kickstarter has some traits that come from social media. A simple messaging service is added to Kickstarter which allows backers and project creators to communicate. This is used to ask questions and provide feedback (Kickstarter, 2016b).12 the project page. This way, backers can visit the Facebook account and see how many friends the project creator has. This feature might me implemented to add additional trust in the project owners as the backers can visit the Facebook page and get to know the person behind the project. However, the option to connect to Facebook is optional and certainly not needed for creating a project. Based on the fact that Facebook integration is optional, project creators have two options when fundraising for a project: only using Kickstarter as the platform and putting their faith in the people (backers) that visit the Kickstarter website, or extending the campaign to social media sites, and thus possibly reaching more people. This raises the question whether the use of social media affects the fundraising for projects in a positive way. Moisseyev (2013) explored the relation between ‘likes’ on Facebook and total fundraising money. He found that a total of 546 ‘likes’ could be sufficient to fundraise the intended amount. Moisseyev used likes as a variable that would explain the funding of 100%. Building on this, the following propositions include whether the amount of likes has a relation to the funding percentage. Mitra and Gilbert (2014) noted that the integration of Facebook on the Kickstarter project page is one of the success factors of succeeding a crowdfunding campaign. By engaging on Facebook, more people might be reached. If the product or service has fewer chances of getting noticed, the project will most likely fail. By interacting with your customers on Facebook, communications and status updates will be spread more easily throughout the networks of the backers. Friends of backers will publicly see that they are supporting a certain project and may even highlight their personal experience regarding the product or service. 𝑃1: 𝐴 𝐹𝑎𝑐𝑒𝑏𝑜𝑜𝑘 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃1𝑎: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐹𝑎𝑐𝑒𝑏𝑜𝑜𝑘 𝑙𝑖𝑘𝑒𝑠 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃1𝑏: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐹𝑎𝑐𝑒𝑏𝑜𝑜𝑘 𝑝𝑜𝑠𝑡𝑠 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 Greenberg, Pardo, Hariharan, & Gerber (2013) did an extensive research on a set of attributes of Kickstarter which the authors link to the succes of a project. Different attributes are, among others, the goal in dollars set by the project initiaters, the duration of the project
on Kickstarter, and whether the project is connected to Twitter and/or Facebook. Greenberg et al. (2013) found that with an accuracy of 67% (p. 1818) they implemented an algorithm of a succesfull online crowdfunding project. In addition to whether the project campaign uses Twitter and how many followers this Twitter account has, my research includes the number of tweets sent out by the project initiaters. By linking a Twitter account to the Kickstarter project page, again more people might possible be reached. By getting influential people to retweet and share the project on Twitter, a bigger group of people could be noticed. 𝑃2: 𝐴 𝑇𝑤𝑖𝑡𝑡𝑒𝑟 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃2𝑎: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑓𝑜𝑙𝑙𝑜𝑤𝑒𝑟𝑠 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃2𝑏: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑇𝑤𝑒𝑒𝑡𝑠 𝑝𝑜𝑠𝑡𝑒𝑑 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 To my knowledge, no researchers have incorporated Instagram in their research. Building on the fact that Instagram is very popular among youngsters; a Piper Jaffray survey stated that one third of a sample of American teens think that Instagram is their most important social network (The Wall Street Journal, 2015), I decided to study the effects of Instagram on the outcome of a crowdfunding project as well. 𝑃3: 𝐴𝑛 𝐼𝑛𝑠𝑡𝑎𝑔𝑟𝑎𝑚 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃3𝑎: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑓𝑜𝑙𝑙𝑜𝑤𝑒𝑟𝑠 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃3𝑏: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐼𝑛𝑠𝑡𝑎𝑔𝑟𝑎𝑚 𝑝𝑜𝑠𝑡𝑠 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 On the next page, the three sets of propositions are put in a simplistic conceptual model (figure 1).
14 Figure 1 Conceptual model
Social network Actions on social network Result on Kickstarter projects
Facebook Twitter Instagram Followers Posts Likes Tweets Posts Followers Percentage funded P1b + P1 + P1a + P2 + P2a + P2b + P3 + P3a + P3b +
4. Methodology
This chapter provides an overview of the methodology used in the first part of this research. This part of the research is based on a quantitative database. The database used is the Kickstarter database. This database is accessible for the public, even finished projects are on there. This part of this research will answer the question whether a correlation exists between the usage of social media on Kickstarter projects and the success of these projects. It is convenient to do a quantitative study because of the number of projects. This research focuses on the Kickstarter platform, primarily because this platform uses the the all-or-nothing type of funding as explained earlier. Moreover, Kickstarter focuses more on the social media linkage, more than other platforms. Kickstarter gives the project owners the option to integrate Facebook and share links of other social media accounts. For this research it is convenient to have easy access to the social media accounts of the various projects. Other platforms like Indiegogo use different options to integrate social media in the crowdfunding campaign. Because it is difficult to compare Kickstarter with other platforms, I decided to use the Kickstarter platform only. Kickstarter was chosen over Indiegogo because of the easy access to the data, especially because of the option to store links of finished projects and analyze them later. 4.1 Data collection and analysis For this study I have analyzed 54 projects on Kickstarter that started between March 16 and May 7. The projects were all accessed on the Kickstarter website and were both successful and unsuccessful. The projects were selected randomly by scrolling through the different categories and selecting a few. The data in this research comes from 9 Kickstarter categories. Due to the limited time of this research I did not include all Kickstarter categories. The full datasheet of the Kickstarter projects is accessible in appendix A. Information about the social media sites were linked to these projects. Information about whether the project had its own Facebook fan page or Twitter account and when this was the case, I looked at these accounts and tracked the number of tweets, Facebook posts and Instagram messages. In contribution to the number of tweets and Facebook/Instagram posts, I analyzed the number of followers and likes.16 For my data analysis I tested whether a correlation exists between the social factors (the number of Facebook, Instagram and Twitter posts and the amount of likes and friends) and the percentage of the goal reached. The data is analyzed in SPSS 22.0 For the correlation, the dependent variable is the percentage funded mentioned earlier. The independent variables are the number of Facebook likes, the number of Twitter followers, the number of Instagram followers, the number of Facebook posts, the number of Twitter posts, and the number of Instagram posts. In the next section, the results of the analysis are presented.
5. Results
In the following section I will present my findings of the research about the the effects of social media usage on crowdfunding projects. 5.2 General statistics on the usage of social media First off with some general findings on the results. Of the 54 projects, 76% has succeeded and 24% has failed their goal. (appendix A). The average funding percentage is 108%, which is just over succeeding. The minimum and maximum are respectively 2% and 586% (table 1). Table 1 Statistics on the percentage funded StatisticsLikes_Facebook Followers_Twitter Followers_Instagram
N Valid 31 22 17 Missing 23 32 37 Mean 1718,8387 757,4091 1510,2941 Table 2 Social media usage and likes on Facebook, followers on Twitter and followers on Instagram As noted in table 2, of the 54 projects, 31 projects have a fan-page on Facebook (57% of total), 22 have a Twitter account (41% of total) and 17 use an Instagram account (31% of total). The average amount of likes on the Facebook pages is 1719, the average followers on the Twitter accounts is 757 and the average followers on Instagram is 1510. A quick analyze will tell that Facebook is the most popular media for creating a fan-page for a Kickstarter project, followed by Twitter and Instagram. It looks like Facebook pages are also most noticed by people, as the average likes on the Facebook pages is higher than on the other two social media. Percentage_funded N Valid 54 Missing 0 Mean 108,9815 Std. Deviation 80,87155 Minimum 2,00 Maximum 586,00
18 Statistics
Posts_Facebook Posts_Twitter Posts_Instagram
N Valid 31 22 17 Missing 23 32 37 Mean 16,0968 526,8636 147,4706 Minimum 1,00 4,00 8,00 Maximum 63,00 1833,00 1052,00 Table 3 Social media usage and posts on Facebook, posts on Twitter and Posts on Instagram In table 3, the following statistics come to light; the most posts of project creators are put through Twitter, the average amount of posts is 527, with a minimum of 4 and a maximum of 1833 posts. After Twitter, Instagram follows as the social networking site with the most posts with an average of 147 posts. The minimum amount of Instagram posts is 8 and the maximum is 1052. The average amount of Facebook posts is 16, with a minimum of 1 and a maximum of 63 posts. The data of this statistic is a little biased. On Facebook, I only counted the posts that have “Kickstarter” in it to make sure the posts were actually to promote the Kickstarter campaign. On Twitter and Instagram, I simply looked at the amount of posts, without sorting them out to the ones that mentioned anything about the Kickstarter project. Possibly, many of these Twitter and Instagram posts are posted before or after the project was online on Kickstarter. This is done because of a limited time and can definitely be improved in further research. In the following sections I will refer back to the stated propositions in chapter 3. 5.3 Influence of the usage of Facebook on project results In the following table (table 4) I will present the results of the correlations between 1) using Facebook and the funding percentage, 2) the amount of Facebook likes and the funding percentage, and 3) the amount of Facebook posts and the funding percentage.
Table 4 Correlations between funding percentage and Facebook indicators The stated propositions were as follows: 𝑃1: 𝐴 𝐹𝑎𝑐𝑒𝑏𝑜𝑜𝑘 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃1𝑎: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐹𝑎𝑐𝑒𝑏𝑜𝑜𝑘 𝑙𝑖𝑘𝑒𝑠 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃1𝑏: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐹𝑎𝑐𝑒𝑏𝑜𝑜𝑘 𝑝𝑜𝑠𝑡𝑠 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 Unfortunately, the three hypotheses are not supported with a significance level of 0,05. It shows however, a little positive correlation with using Facebook. In contrast to the study of Moisseyev (2013), the amount of likes and the amount of posts have no influence on the funding percentage whatsoever. The correlation between Facebook likes and the funding percentage is even a little negative. 5.4 Influence of the usage of Twitter on projects results In the following table I will present the results of the correlations between 1) using Twitter and the funding percentage, 2) the amount of Twitter followers and the funding percentage, and 3) the amount of Twitter posts – or tweets and the funding percentage. Table 5 Correlations between funding percentage and Twitter indicators
Used_Facebook Likes_Facebook Posts_Facebook Pearson Correlation ,152 -,106 ,015 Sig. (2-tailed) ,272 ,572 ,937 N 54 31 31 Correlations Percentage_funded
Used_Twitter Followers_Twitter Posts_Twitter Pearson Correlation -,131 ,088 ,221 Sig. (2-tailed) ,347 ,696 ,324 N 54 22 22 Correlations Percentage_funded
20 The stated propositions were as follows: 𝑃2: 𝐴 𝑇𝑤𝑖𝑡𝑡𝑒𝑟 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃2𝑎: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑓𝑜𝑙𝑙𝑜𝑤𝑒𝑟𝑠 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃2𝑏: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑤𝑒𝑒𝑡𝑠 𝑝𝑜𝑠𝑡𝑒𝑑 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 Again, the results are not significant on a 0,05 level of significance. The results show that there is a minor positive correlation between the amount of posts on Twitter and the funding percentage. There is even a little negative correlation between using Twitter and the funding percentage. The correlation between the number of followers on Twitter and the funding percentage is too little to notice. 4.5 Influence of the usage of Instagram on projects results In the following table (table 6) I will present the results of the correlations between 1) using Instagram and the funding percentage, 2) the amount of Instagram followers and the funding percentage, and 3) the amount of Instagram post and the funding percentage. Table 6 Correlations between funding percentage and Instagram indicators The stated propositions were stated as follows: 𝑃3: 𝐴𝑛 𝐼𝑛𝑠𝑡𝑎𝑔𝑟𝑎𝑚 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃3𝑎: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑓𝑜𝑙𝑙𝑜𝑤𝑒𝑟𝑠 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 𝑃3𝑏: 𝐴 ℎ𝑖𝑔ℎ𝑒𝑟 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐼𝑛𝑠𝑡𝑎𝑔𝑟𝑎𝑚 𝑝𝑜𝑠𝑡𝑠 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑜𝑗𝑒𝑐𝑡 𝑙𝑒𝑎𝑑𝑠 𝑡𝑜 𝑎 ℎ𝑖𝑔ℎ𝑒𝑟 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑓𝑢𝑛𝑑𝑒𝑑 The correlation between the usage of Instagram and the funding percentage is significant on the 0,05 level, which is also the only correlation that is significant on the 0,05 level. This Used_Instagram Followers_Instagra m Posts_Instagram Pearson Correlation ,319* -,088 -,054 Sig. (2-tailed) ,019 ,738 ,836 N 54 17 17 Correlations Percentage_funded
could mean that there is a relation between using Instagram and getting a better funding percentage. The followers and posts both have a negative correlation with the funding percentage. In the next chapter, the second part of this study is presented, the case study about Drink-O-Tron: The Drinking Game of Kings.
22
6. Case-study: Drink-O-Tron: The drinking Game of Kings
In addition to the question whether a relation exists between using social media and the results of the project, the introduction raises the question why project creators use social media. The straightforward explanation is that project creators use social media to reach more people, but several deeper motives might lay underneath this. To investigate this, I decided to zoom in on one project I studied: Drink-O-Tron – The Drinking Game of Kings. This chapter is structured as follows. In section 6.1 the uses and gratifications theory by Katz (1959) is explained. Next, in section 6,2, I will share the methods of this case-study. Next, before analyzing the social media usage of this project, I will share the basic information of this project in section 6.3. In section 6.4 there is room for a quick analysis on the Kickstarter website, which gives insight in how the project is put together and what choices the project creators have made. In section 6.5 the social media usage of the project is analyzed. This will include an in-depth investigation of the many posts and tweets on the various social networks Drink-O-Tron used to promote the product. Section 6.6 will give an explanation of the motives by the project initiators, by analyzing the survey I sent out and finally in section 6.7 the results will be discussed, along with any implications this research incorporates. 6.1 Theoretical framework This second part of this research will be mostly based on the theoretical framework by Jahn & Kunz (2012) (Figure 2).Figure 2 Theoretical framework of Jahn & Kunz (2012) Jahn & Kunz (2012) developed a theoretical framework around ‘fan pages’. Their research was based on fan pages on social networks. The purpose of their research was to study the effect of fan pages on the customer-brand relationship and for what reasons users have to participate on these fan pages. According to Jahn & Kunz, fan pages have traits from online brand communities. Fan pages differ from brand communities in a way that fan pages are “embedded in an organic grown, and not brand-related network of social ties” (Jahn & Kunz, 2012, p. 348). Fan pages are created around a single brand, product, or company. They also note that fan pages are mostly regulated by the company behind the page. Fan pages are the central connections between customers and brands and are used to interact with their customers. The framework is based on the uses and gratifications theory (Katz, 1959), customer engagement theory (Van Doorn et al. 2010; Brodie et al. 2011), and involvement theory (Zaichkowsky, 1985). The basic idea of the framework is that if the brand fan page satisfies particular needs of a user, this satisfaction leads to a higher approach to the brand fan page, which should in turn lead to a higher brand loyalty. Higher brand loyalty would ultimately
24 Using the uses and gratifications theory by Katz (1959) the research explains why independent consumers have different media-usage patterns. According to the theory, individuals have various needs and use media to please these needs and achieve any goals they pursue. Furthermore, Dolan et al. (2015) explain that the uses and gratifications theory is an approach to understanding how and why customers use specific media to satisfy specific needs. The uses and gratification theory can also be applied to new media like internet and social networking (Chung & Austria, 2010). The most noticeable needs can be classified into three gratification areas: the content-oriented area, the relationship oriented area, and the self-oriented area. The content-oriented area is based on the information in these media. The relationship-oriented area is based on the social interaction with others. The self-oriented area is based on particular needs of individuals. To explain the fan-page usage behavior, Jahn & Kunz (2012) apply the three gratification areas of uses and gratifications theory (content, relationship, and self-oriented) to the context of fan-pages. In the content area, the authors differentiate between the functional and hedonic values that are delivered. With functional values, information sharing plays a major role (Foster, Francescucci, & West, 2010). With hedonic values, entertainment serves as a basis (Sheldon, 2008). The authors suggest that higher functional value of the fan-page content leads to higher fan-page usage intensity. Furthermore, higher hedonic value of the fan-page content also leads to higher fan-page intensity. In the relationship area, there are two values that are important; social interaction values and brand interaction values (Sheldon, 2008; Algesheimer, Dholakia, & Herrmann 2005). Jahn & Kunz propose that higher social interaction and brand interaction leads to higher fan-page engagement. Finally, in the self-oriented area, fan pages can serve as a way to portray the own self-concept. (Jahn & Kunz, 2012). The authors propose that higher self-concept value leads to higher fan page engagement. The authors tested their framework on various fan pages including Coca Cola, BMW, Starbucks, McDonalds, and Barack Obama. Mostly based on brands and products, the authors gave have a clear interpretation of the concept. For Kickstarter projects, project owners also use some kind of fan page. In my interpretation, the fan pages of the research of Jahn & Kunz do not differ that much from the fan pages created around Kickstarter. Therefore, in this research, the propositions of Jahn & Kunz will be tested on the fan pages
(Facebook, Twitter, and Instagram) created around Kickstarter projects. Brand purchase in the theoretical framework is somewhat similar to backing a project on Kickstarter. As backing a project is highly interdependent of the percentage funded of a project (Hekman & Brussee, 2013), I will test the following propositions on the fan pages of Kickstarter projects: P1: Higher values in the content-oriented area lead to higher fan page usage intensity which leads to a higher funding percentage. P2: Higher values in the relationship-oriented area lead to higher fan page usage intensity and higher fan page engagement which leads to a higher funding percentage. P3: Higher self-concept value leads to higher fan page engagement which leads to a higher funding percentage. 6.2 Methodology This research is a case study on one of the projects I studied in the first part of the research. In addition to the analysis on Kickstarter and the social media websites, this part of the study uses a survey sent out to the owners of the following Kickstarter project. The survey is there to ask the owners on their motives of using social media with the crowdfunding project. In sections 6.6 and 6.7, the answers on the survey will be compared to my findings on the various social media accounts (in section 6.5) and the statistical data retrieved from the findings of the first part of this research. The survey incorporates a total of 18 questions. Some questions are only displayed to the project owners if they answered previous questions in a certain way. The full survey is available in appendix B. In section 6.5 I will thus analyze the various social media posts myself and try to put them in the three areas from the uses and gratifications theory. The various literature on the different areas will greatly help me analyzing the content of the social media posts. In the table below the different areas and values are noted (table 7).
Content-oriented area Relationship-oriented area Self-oriented area
26 6.3 Project introduction: Drink-O-Tron: The Drinking Game of Kings The project Drink-O-Tron: The Drinking Game of Kings is created by Prodigal Creative LLC, an app-making company that makes mobile games for Android phones and iPhones. The company currently developed two mobile games on the Android platform: Sevens: The Never Not Funny Game and Drink-O-Tron: The Drinking Game of Drinking Games. (On the IOS platform (for iPhones and iPads) the company has created five different apps: Sevens: The Never Not Funny Game, Drink-O-Tron: The Drinking Game of Drinking Games, 7 in 7: The Pop Culture Party Game & Celebrity Trivia Quiz, Wager: The Betting Game for Gambling with Friends, and Celebrity: The Pop Culture Party Game of Celebrity Names (The Prodigal Creative, 2016). The product Drink-O-Tron: The Drinking Game of Kings is basically the physical version of the mobile app. The card game on Kickstarter is created two years after Prodigal Creative LLC launched the app on IOS. This project was put in the category ‘Games’ and subcategory ‘Playing cards’. The project was launched on April 5, 2016 and ended on May 5, 2016, the duration of the project was therefore 30 days. The project creator describes the product as follows: “The game is easy! You just lay out the cards in the middle of the table, gather some friends, and GO! Pick a card, and do what it says. It may tell you to drink, or make someone else drink, or run around the room with your hands pulled into your shirt like a T-Rex! There are 54 different options!” Drink-O-Tron was backed by 148 people and raised $5,072 of funds. The goal of this project was $5,000 which means that the funding percentage is just above 100% and the goal is met. 6.4 Project analysis on Kickstarter On the project page of Kickstarter, the project creator posted 7 updates. Updates where posted by the project creator to keep in touch with the backers visiting the Kickstarter page. Also, backers get a notification when the project posted an update (Kickstarter, 2016b). On April 12, Drink-O-Tron posted their first update:
“Drink-O-Tron Week 1 Update: we’re of to a solid start! We’ve crossed the 20% mark, which is apparently a big deal in the land of Kickstarter. The stats say that 80% of all projects that reach 20% of their goal eventually get funded! (...)” On April 28 Drink-O-Tron wrote: “One week left: We’ve got a week to go and we’re 60% funded! I think that’s great news but I’m bad at math, so who knows! (…)” On May 3, just before the end of the project, Drink-O-Tron wrote: “We're at 84% of our goal with 48 hours left: Share this link http://kck.st/2390Dua and let's make this happen! Thank you to everyone for your support so far, it looks like we'll be able to get this project funded, all we need is a little more help!” The last project update during the Kickstarter campaign was on May 5: “Cheers to everyone! We are funded! - Thanks to your help, we are funded and production of the first ever deck of Drink-O-Tron cards will begin soon!! I'll be sending out a survey soon to collect shipping addresses. If you purchased a customized deck, I will be contacting you about what name you want featured on the box and/or cards. Thanks again everyone!” Drink-O-Tron had various rewards that backers could choose from, as mentioned in table 8 below, the project offers multiple personalized rewards: No. Pledge amount Reward(s) No. of Backers 1 $1 or more - “Updates on the status of Drink-O-Tron. A virtual cheers through the inter-webs!” 6 2 $5 or more - “A printable PDF of the entire deck. Updates on the status of Drink-O-Tron.” 5 3 $12 or more - “The Drink-O-Tron Game! (40% off!) (54 cards in a Collector's Metal Box) - A printable PDF of the entire deck.” 90
28 4 $20 or more - “2 Drink-O-Tron Decks! (50% off!) (54 cards in a Collector's Metal Box x2) - A printable PDF of the entire deck.” 35 5 $50 or more - “A personalized Drink-O-Tron Collectors Box. Your name will be featured on your Collector's Metal Box. - The Drink-O-Tron Game! (54 cards in a Personalized Collector's Metal Box) - A printable PDF of the entire deck.” 3 6 $125 or more - “A FULLY PERSONALIZED Drink-O-Tron deck. - The Drink-O-Tron Game! (54 Personalized cards in a Personalized Collector's Metal Box) - Your name will be featured on the back of each card in your deck, as well as your Collector's Metal Box. - A printable PDF of the entire deck.” 4 7 $500 or more - GET IN THE GAME! Create your own card which will be shipped out to everyone who orders! You'll work with our team on a rule and an original design* which will be featured in every deck! - The Drink-O-Tron Game! (54 cards in a Collector's Metal Box) - A printable PDF of the entire deck. *card will fit the aesthetic of the rest of the deck 2 Total number of backers 145 Table 8 Rewards from the Drink-O-Tron crowdfunding campaign Drink-O-Tron added a personal Facebook account to the Kickstarter page. It shows that the person has 269 friends. Also on the Kickstarter page there are two websites stated; one links to the Drink-O-Tron website (www.drinkotron.com), and the other links to the website of the project owner (www.prodigalcreative.com). There are no social media accounts mentioned on the page. However, there are three social media accounts mentioned on the product website (www.drinkotron.com): Facebook, Twitter and Instagram.
6.5 Project analysis on social media As stated in the previous section, Drink-O-Tron used three different social media networking sites. I will respectively analyze the Facebook page, the Twitter account and the Instagram account in sections 6.5.1, 6.5.2, and 6.5.3. 6.5.1 Project analysis on Facebook: www.facebook.com/drinkotron First off is an in depth analysis of the Facebook fan page of Drink-O-Tron: The Drinking Game of Kings. The Facebook page is actually the page for the mobile app by Prodigal Creative (Drink-O-Tron: The Drinking Game of Drinking Games). The Facebook page started in 2004, which is around the time the mobile app was launched. The page has 380 likes and numerous Facebook posts. For this study, I will only analyze the Facebook posts that have been placed from the start of the Kickstarter project to the end of the project (from April 5 to May 5, 2016). Drink-O-Tron posted 13 Facebook posts in total in that period. Of these 13 posts, I selected 6 which will be analyzed in-depth. The first Facebook posts are respectively posted on April 5 and April 10 and are as follows: Figure 3 First Facebook posts by Drink-O-Tron during the Kickstarter campaign The texts say: “Support us on Kickstarter!” and “Click here to support us on Kickstarter! (…)” including the link to the Kickstarter page of Drink-O-Tron: The Drinking Game of Kings. The second post also includes a link to a YouTube video about the new product they will be creating. The two posts did not have any “likes” by their followers. The first two posts have
30 Facebook posts provide information about the upcoming product. Referring back to the theoretical framework mentioned earlier, I will classify these posts in the content-oriented area with both functional and hedonic values. The posts provide informational content about the product and the YouTube video states that the product is useful and fun. The two posts can also fit in the relationship-oriented area as the creators try to create a relationship with their backers by asking them to support the campaign. The next post is posted on Facebook on April 28, 2016: Figure 4 Facebook post of April 28, 2016 This text in the Facebook page states “New Cards!” and this posted is most likely put online to provide their backers with more information about the product they support. The post might also attract new backers because the of the attractive image. Classifying this posts as brand interaction value is the best option here. The project owners try to create a relationship with the customer and the product by showing some characteristics of the card game.
The next two Facebook posts that will be analyzed are the following (figures 5 and 6): Figure 5 and 6 Facebook posts of May 3 and May 4 – Drink-O-Tron Facebook page These two posts have a lot in common. Both texts say: “Click here to get your pack today! (…)”, again with the link to the Kickstarter page included. Like previous posts, this post is there to get more people to back the project. The two posts fit into the relationship-oriented area because the project creators try to relate to the backers in such a way that they will back the campaign. The motive for posting this post is therefore applying to the social-interaction value. The last Facebook post that will be analyzed was posted on May 5 and marks the end of the Kickstarter campaign:
32 As said, the Kickstarter campaign ended on May 5 2016. This post is meant to provide a thank you to all the backers that supported the project. This post can therefore be ranked in the social-interaction value of the relationship-oriented area. By publicly thanking the ones who funded money, the project owners play on the relationship with their backers. 6.5.2 Project analysis on Twitter: www.twitter.com/DrinkOtron Next up is an analysis of the Twitter messages posted by Drink-O-Tron. Again, this fan page is used for promoting both the mobile app and the physical card game. The Twitter of Drink-O-Tron looks like this: Figure 8 The Twitter account of Drink-O-Tron The Twitter page of Drink-O-Tron has 8,949 followers. This might imply that the Twitter fan page is far more popular than the Facebook account mentioned earlier. Drink-O-Tron posted also posted an outstanding bigger amount of messages on this social media site. In total, Drink-O-Tron posted 283 tweets. Again, I will analyze some of the tweets that were posted when the Kickstarter campaign was active. A total of 41 tweets were posted between April 1 2016 and May 5 2016. The first tweet about the Kickstarter project was posted on April 1, 2016 – 4 days before the start of the campaign. The tweet looks like this:
Figure 9 First tweet about the Kickstarter campaign, April 1 2016 – Twitter account of Drink-O-Tron By providing information about the Kickstarter project, the project owners use the social-interaction value of the theoretical framework proposed by Jahn & Kunz (2012). By asking the Twitter followers to “stay tuned”, Drink-O-Tron’s motive for posting this tweet is to get more followers to back their upcoming Kickstarter campaign. The next tweet was posted on April 5, mentioning the start of the Kickstarter campaign: Figure 10 tweet on April 5 – Twitter account of Drink-O-Tron This tweet by Drink-O-Tron marks the beginning of the Kickstarter project. This tweet
34 tweet is most likely posted to get the people to know the product, hence the decision of placing the content of this tweet as a brand-interaction value. This is the first tweet that mentions the actual product: “a deck of Drink-O-Tron cards”. Below is an example of the tweets Drink-O-Tron posted from April 12 to April 30. Drink-O-Tron posted 16 tweets in the course of this time and they look more or less the same. Figure 11 tweet by Drink-O-Tron on April 12 This tweet is one of the many tweets Drink-O-Tron posted on Twitter. The tweet is used to arouse the followers of the product. In the various tweets, little pieces of information were shared about the final product. It attracts attention and makes you want to click on the link attached to find out more. Hence this tweet and the ones who followed are again characterized by brand-orientation value. The last tweet that will be analyzed is the following: Figure 12 tweet by Drink-O-Tron on April 24
This tweet is a little different than the many other tweets posted by Drink-O-Tron. This tweet marked the progress the project owners had on the project. It categorizes as functional value, as more information about the final product will come to light. 6.5.3 Project analysis on Instagram: www.instagram.com/drinkotron The Instagram account of Drink-O-Tron has 9811 followers, which is higher than any of the social media the project has been using. In total, the page posted 289 messages. Posts about the Kickstarter campaign start around the beginning of the Kickstarter campaign and end on the last day of the project duration. Because of the many different posts on Instagram, I will only analyze the ones in the middle of the campaign. In total, Drink-O-Tron posted 39 posts mentioning the Kickstarter campaign. This is just a minor selection of the many Instagram posts: Figure 13 Instagram posts by Drink-O-Tron The posts above are characterized by the Kickstarter logo which is placed on the images. The posts get around 60-70 likes. Instagram is not about using a lot of text next to the images so these posts are there to get the people to know the product without giving a detailed
36 description. Therefore, almost every Instagram posts can be classified in the brand-interaction value of the theoretical framework on fan-pages by Jahn & Kunz (2012). The next section will give an analysis on the motives of the owners of the Kickstarter project. The ones who made Drink-O-Tron: The Drinking Game of Kings will share why they used the various social media in such a way. 6.6 Motives of project owners for using social media The next step in this case-study was to sent out a survey to the project owners of Drink-O-Tron: The Drinking Game of Kings. In the survey, the project initiators were asked about their motives for using social media. The survey consists of 18 questions in total. Firstly, the project initiators were asked whether they had used any of the three researched social media sites (Facebook, Twitter, Instagram). Next, the project initiators were asked what their motives were for using these social media. Ultimately, the project initiators were asked how much they though that using the various social media would help the outcome of the campaign in a positive way. In the following paragraphs, the questions and answers will be shared and a short analysis will be made. In appendix B the full completed survey will be attached. The fist question on the questionnaire was whether the project owners used any social media to aid the funding of your project. As came to light in the previous section, Drink-O-Tron answered yes to this question. The social media that Drink-O-Tron used were Facebook, Twitter, and Instagram. Using the three gratification areas by Katz (1959), on the question why the project initiators used Facebook/Twitter/Instagram, five options were given; to display the functional value of the project, to display the hedonic value of the project, to interact with my backers, to present myself to my backers and to entertain my backers. Drink-O-Tron answered that for Facebook, Twitter and Instagram, their motives were the same. The project creators ticked all the boxes for the three social media sites. The answers of the questions are in line with what I analyzed earlier. The only thing that I did not immediately notice in the various Facebook- and Instagram posts and tweets was the fact that it was used to interact with their backers as in answering question and reacting on feedback. To my knowledge, there were no (or at least few) questions or reactions from backers on all three social media.
The next question was about the amount of social media messages the project creator posted. Drink-O-Tron states that they sent out 6-10 Facebook posts to aid the project campaign, they tweeted more than 26 times and they posted more than 26 Instagram messages. This again, follows my analysis in the previous section. The next question is more interesting. I asked: “In your opinion, how much did Facebook/Twitter/Instagram aid in the funding of your project”. Drink-O-Tron was presented a Lickert scale from 0 (not at all) to 10 (very much). For Facebook, Drink-O-Tron answered 4. Referring to the total amount of Facebook posts on the project, this might be true after all. Also keeping in mind that Drink-O-Tron has only 380 likes which is, in comparison to their Instagram and Twitter accounts, not that much. For Twitter, Drink-O-Tron answered 4 as well. This is in sharp contrast to the fact that their Twitter account has 8,949 followers. One could expect that this should have quite some impact on the Kickstarter campaign. For Instagram, Drink-O-Tron rates 7/10. Again, while referring to the indicators on social media there are some confirmations on the analysis. The amount of followers is 9811, which is more compared to Facebook and Twitter. This might explain why the project creators think that Instagram has the most impact on the Kickstarter campaign. On Instagram, there were also the most likes and reactions on the posts compared to Facebook and Twitter. I conclude that the expectations of Drink-O-Tron about aiding the Kickstarter campaign is what I analyzed on the social networking sites. 6.7 Case-study discussion and implications for further research Overall, the analysis I have made on the social networking sites is in line with the answers Drink-O-Tron gave to the questions in the survey. Referring back to the theory and the stated propositions, this means that using the different motives in the different areas leads to an increase in fan page usage intensity and fan page engagement, which ultimately leads to brand purchase. Especially P1 and P2 are confirmed. As far as I’m concerned, the self-concept value was not directly used in the social media accounts. P3 can, therefore, not be confirmed. Drink-O-Tron raised $5,072 on a goal of $5,000. This means that the funded percentage is above 100% and the different values might impact the outcome of the Kickstarter project.
38 projects that did not make it to the goal they set. In the future, the theory could be tested on many more projects, including the ones who failed to achieve their set goal. Furthermore, although the funding percentage is related to the amount of backers, it would be interesting to study the effects of the different values on the amount of backers. Especially because funding percentage is just above 100% and not very conclusive.
7. Discussion and implication for further research
As crowdfunding is becoming more and more popular and presents itself as the new type of financing start ups, it is useful to consider in what way one could attract even more contributions to a project. This research explored the relationship between the usage of social media and crowdfunding results. Unfortunately, there is only one significant conclusion derived from this research which is that having an Instagram account and using this for the promotion of crowdfunding projects will have a positive influence on the outcome of the project. In addition to the question whether social media usage impacts the outcome of Kickstarter projects, the second question was what the motives behind using social media were and whether they worked. I can’t be very conclusive about this question as the funding percentage of the project studied in the case study is just above 100%. This is also an implication of this research. This could be improved by doing a more extended case study on several projects. There are a few other implications of this research. First of all, the sample size of 54 is not enough to collect really reliable results. Research in the future should use a sample size of at least 200 despite the fact that the analysis of social networking sites is time consuming and often difficult. Furthermore, further research could make a distinction between the different categories on Kickstarter. I noticed that in some categories all the projects analyzed use social media and in some categories very few. This also has influenced the research in such a way that the results can be improved by others. An other thing is that the sample (although selected randomly) consisted mainly of projects that succeeded. To get more reliable results, the sample should consist of around the same amount of succeeded and failed projects. As the case-study is concerned, further research should also analyze projects that failed to get to the target amount of funding. This research can be extended in several ways. First of all, this research used only one indication on Kickstarter (the funding percentage), this could be extended by using all three variables. Secondly, this research looked at only one factor that could affect the outcome of the project. In reality, many more factors are interesting to study. For instance, think about the incentives or rewards and the location of the project. Moreover, this research did an40 analysis only on Kickstarter to extend the research, one could involve other major crowdfunding websites (Indiegogo etc.) as well. This research was focused on the three biggest social media: Facebook, Twitter and Instagram. Future research could also look at the fact that these social networking sites might be interrelated and could work together and therefore affect the outcome of a project in a positive way.
