5 Ways Digital Marketing Powers Your Equity Crowdfunding Campaign to Succeed When you research something online, you become a hot lead.
By Kendall Almerico Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Under the JOBS Act, small companies now have two methods of equity crowdfunding to raise millions of dollars in capital online from the general public. Unfortunately, most people think that all a company needs to do is post a cool video, some fancy graphics and some engaging text, and the investment money will start pouring in. Wrong.
As one of the foremost experts on crowdfunding, I have seen this time and again. When companies ask me why their equity crowdfunding campaign failed, the answer is nearly always the same -- they did not market the offering correctly. Crowdfunding is not the "field of dreams." Just because you build it, does not mean investors will come. Companies have to drive investors to their equity crowdfunding campaign with effective marketing.
Related: What We Can Expect for Equity Crowdfunding in the Year Ahead
Ever wonder why you looked at that gadget on Amazon, and for the next two weeks you are suddenly bombarded by ads for that gadget or similar products every time you are online? Welcome to the wonders of digital advertising. Someone is paying to serve you those ads, knowing you are a highly likely buyer based on hidden bits of data called pixels and cookies some company was kind enough to attach to your computer while you browsed. By looking at anything online, you have become a hot lead to someone trying to sell you something.
The same logic works for equity crowdfunding. If your company is funding a new product, for example, it's easy and cost effective to put ads in front of potential investors, based on data of their prior online habits. A crowdfunding marketing plan involves many aspects, but these five tips related to digital marketing are essential to equity crowdfunding success.
1. Use Facebook ads.
An effective Facebook ad campaign allows a company to effectively target likely investors based on Facebook users' location, demographics and interests. Stephanie Heinatz, CEO of The Consociate Group, is not only a public relations guru with a special expertise in the digital marketing space, but has also successfully marketed several equity crowdfunding campaigns. "Facebook is the number one platform in social media marketing where you can target a customized audience. No more wasting money on a megaphone of messaging to who-knows-who. Facebook is like picking up the phone and selling directly to someone."
Related: 8 Reasons Facebook Will Beat All Other Digital Marketing Channels This Year
2. Use "lookalike" audiences.
If you have an email database of customers or investors, you can create a lookalike audience and serve ads to them on Facebook. Delray Wannemacher of First Look Equities is a financial industry veteran whose success in driving investors to equity crowdfunding offerings comes from delivering ads to lookalike audiences created from his proprietary investor database. Wannemacher exemplifies this with a case study showing the impact that a well-designed, targeted audience ad campaign can have on a crowdfunding offering. "One Facebook ad campaign we ran showed an improvement on the amount of investments per day of 252 percent, with the average investment being three times higher than before the campaign."
3. Search Engine Marketing (SEM).
The most basic form of SEM involves paying for certain search terms and having Google drive traffic to your crowdfunding campaign based on what you paid for. Heinatz explains "With SEM, we know somebody is a potential investor based on their search terms, so you are directly reaching out to people who have already identified themselves as someone looking to make a purchase or an investment."
4. Twitter and LinkedIn ads.
With these two popular social media sites, Heinatz emphasizes context over content. "Twitter is a fast moving headline source, but you can use Twitter advertising to promote and grow your community. LinkedIn ads work best in a B2B context and can be used to drive people to a lead generation page for the right crowdfunding offerings."
5. Email marketing.
While email marketing may not be as sexy as newer marketing tactics such as social media and video, it can still be a huge factor in driving a successful equity crowdfunding offering. Rob Clarke and Andrew Eckard of Lin Digital have spent almost a decade crafting successful digital marketing strategies for local, regional and national businesses, and both agree that email is a crucial factor in driving conversions. Eckard explains, "There are plenty of digital platforms available to deliver your message, but good old fashioned email marketing continues to offer one of the best opportunities to build relationships and drive sales." Clarke added, "Early momentum is crucial in any crowdfunding campaign, and building your email list to engage people in what you are doing before asking them to invest or contribute will put you at a huge advantage on launch day."
Related: Email Marketing Is Nearly 40 Years Old. How Can We Keep It Thriving?
Digital marketing is an essential part of every equity crowdfunding offering, just as it has been for rewards-based crowdfunding. Working with the right professionals with the correct strategy and knowing who to target is the key to success. One last tip from your favorite crowdfunding expert: Digital marketing is a process that takes time. Most say it takes a potential investor seeing an average of five ads before they make a decision to invest. Converting digital advertising is a process, so start early in the crowdfunding campaign.
