Experiment: GeoFence Marketing for Crowdfunding Projects
What is Experiment about?
Something we do as a platform is constantly seek innovative ways for project creators to push project donations. In our first experiment, we created an in-home magazine with a goal of finding innovative ways a project creator could drum up local support. This experiment, we’re looking into GeoFence Marketing for crowdfunding projects. Our goal? To see if project creators can conduct highly targeted advertising campaigns without breaking the bank. To iterate from our last experiment, our strong belief is that a crowdfunding platform should undergo extensive R&D to find innovative and cost effective ways for project creators to raise awareness.
Note: Have questions? We’re here to help, shoot us an email at firstname.lastname@example.org or better yet Tweet us at @Dreamsdotbuild.
What is GeoFencing?
GeoFencing refers to the act of creating a virtual geographic boundary that you can define events for. GeoFencing has numerous applications but we will be focusing on the marketing aspects and benefits. When running a paid ad on Facebook you will be asked to create a target audience to advertise towards. There are many ways to do this, you can define user interests, location, people who have viewed your Facebook page etc. With GeoFencing we can now combine interests and locations into marketing towards people’s behaviors, making your advertising campaigns display only to people interested in your product at a set location on Earth (Down to 1 mile). This is the power behind Geo marketing.
Along your crowdfunding journey, you’ve probably considered running paid advertisements on social media to drum up awareness. It’s ironic to have to spend funds to raise funds but it’s becoming an accepted practice within the industry. Yet you can spend a LOT of money on advertising that frankly, is not giving you results. So why advertise? Simple, to gain exposure to people interested in what you’re doing. In essence, a well ran advertising campaign should pay for itself after the initial ads are running with conversions. Make no mistake, however, this is quite hard to accomplish but GeoFencing is here to help us out! So basically… if you’re going to advertise, it’s worth the time to learn the best approach to take.
Isn’t the crowdfunding platform traffic enough?
No, in fact, your success will almost always be determined by what you do before being on a crowdfunding platform. We recently covered this myth but it boils down to three issues:
- Lots of traffic that isn’t targeted
- You’ll be trying to sell a video game to someone who has never played one. It’s a hard sell and our results oddly show this as well.
- Short attention span
- If you don’t capture a sponsors interest they’re on to the next project.
- No connection
- You have to hold a strangers attention, pitch them, build a relationship with them AND ask them for funding within 2 minutes instead of 2 months. Did we mention thousands of other projects are doing the same thing? It’s not easy.
If you wait and let the platform traffic drive your exposure, unfortunately, there is a high chance you won’t gain exposure or funding. A lot of crowdfunding comes down to creating a relationship with like minded backers. That’s drastically harder to do in two minutes than to cultivate the same relationship over two months. Paid ads while not necessary for success will help you acquire new backers at a faster rate than platform traffic will if done correctly.
What we did
So now that we’ve covered some popular questions and basics let’s get into what we did.
Facebook allows you to to run GeoFence ads by defining an address and displaying ads to users within a one-mile diameter from the address. So, we ran four (4) Facebook advertising campaigns, one Remarketing, two GeoFence campaigns, and one highly targeted and optimized non-GeoFenced campaign. The Remarketing campaign served ads to only project creators who had viewed our project creation form in the past 30 days. This serves as our baseline for a highly targeted, non-GeoFenced advertising campaign. We then ran a GeoFencing campaign targeting news outlets to serve as our non-targeted, GeoFenced advertising campaign. We also ran a highly targeted GeoFenced campaign to emulate what unoptimized GeoFencing can do. Lastly, we’ve included our ProgressWorks promotional ads BEFORE we scaled them up. The ProgressWorks ads are the only ads that have been optimized.
All ads were created and NOT optimized (aside from ProgressWorks) to simulate an average case scenario as well as to keep the data consistent. So if we had optimized and scaled up the ad campaigns these numbers could be far better or worse depending on the changes we made.
The ads were to target anyone who has an interest in crowdfunding, startups, entrepreneurialism etc. and this was constant across all ad campaigns. We did, however, add an additional filter to the News campaign to focus writers and bloggers.
The timeframe for these ads was roughly one week, with the exception of the ProgressWorks expo which is still ongoing. We’re just about to ramp that up actually 🙂
Finally, we had each ad campaign limited to just five dollars a day, this allows us to gather enough data to provide expected results but to be truely effective need to be scaled up past just five dollars a day.
Our initial theory proved correct in that GeoFenced ads are often more cost effective than their non-geo brethren. We found that on average the GeoFenced campaigns produced five times the results at 1/13th of the cost. That’s quite the improvement but let’s look at the graphs for each one. Please keep in mind as a crowdfunding platform, our conversions are harder to obtain as for a conversion to occur for us a user must create a project and sign up for weeks of funding time. This is a bigger commitment than asking someone to back your project and as such, our numbers do not represent how your ads may perform.
Remarketing Campaign (Not GeoFenced)
As you can see, over the course of a week we’ve garnered 15 conversions from our remarketing campaign. However, we displayed our ad to over 17k+ people, that’s a lot of people! Yet it also highlights the results your project could see if you rely on a crowdfunding platform’s traffic. We saw a lot of traffic but little engagement, even days with no engagement! This is a good indication that our ad is not hitting the people we want. Sure the people have visited our project creation page once and are interested in crowdfunding but may not be project creators looking for a platform at the moment. We can also see that our cost to acquire a new user is around 3.30 USD, that’s steep for a meager 0.05% ration from viewers to conversions. Let’s see how it stacks up to our GeoFenced ads.
News Ad Campaign (GeoFenced)
By simply adding simple GeoFencing attributes we can already see a massive difference in results. While we only reached 1,212 people over the same course of time, you can see our results have improved ten-fold. Having spent roughly 20 USD less, we’ve impacted eight times as many people. We also pay less per result at just .25 USD per interested person. We also have a healthier result rate at 4.87% instead of just 0.05%. This highlights the power of marketing towards a specific group of people instead of going for the most views. Keep in mind we only targeted news outlets like CNN or Fox News with this ad campaign.
Brand Awareness Campaign (GeoFenced)
Here is where you really see the power of GeoFenced ads. Here we directly marketed towards project creators and small businesses that walked within a one-mile radius of popular business incubators. While we spent roughly 10 USD more than the news campaign, keep in mind our pool of people we marketed towards opened up a bit. You can see this in our results, we reached 7k+ business owners in the same week as the rest. The results are also quite positive as we have a result rate of 6.20% allowing us to reach 570 people of the 7k+ impressions. The big kicker here, however, is our cost per result, not that without GeoFencing we were spending 3 USD PER RESULT, with geofencing we are not spending on 0.07 USD per result allowing us to reach more people for less money on our ads.
ProgressWorks 2017 (Not GeoFenced)
Back to not being GeoFenced, you can see some favorable trends forming. Still not to the levels of results you’ll see coming out of a GeoFenced ad as our ProgressWorks ad has garnered a 0.68% result rate. The nice thing is that our cost per result is under the one USD mark now at just .64 cents but again even a highly targeted Non-GeoFenced campaign does not scratch the surface of an unoptimized GeoFenced campaign.
We definitely enjoyed jumping into the intricacies provided by GeoFence technology and are excited to see the potential it can bring to crowdfunding. Is it something we’d advise crowdfunders to partake in? This really isn’t up to us to answer as you have to decide that advertising your project is the path you want to take. If you’re looking at spending some funds on advertising, GeoFencing is worth a look. If anything, it will help you define your target audience and keep the marketing costs down while still producing some good results. Our campaigns are far from optimized by design, as such, we will definitely be revisiting GeoFencing with optimized ads at a later date. We will also be hosting a class on how you can implement effective GeoFencing advertising for your crowdfunding project on our upcoming E-Learning platform dreams.university. Until then, we’d love to hear your thoughts on Twitter (@DreamsdotBuild), Facebook (@dreamsdotbuild), or by email.
PST! We’re a small company with a big vision, mind helping us revolutionize crowdfunding with a social shout out?