#1 Crowdfunding: Ten Frontiers for the Future of Engagement


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This is the first report from our upcoming People's Insights Annual Report titled “Now & Next: Future of Engagement”, also available as a Kindle eBook and soon as an interactive iPad app. The report will highlight the ten most important frontiers that will define the future of engagement for marketers, entrepreneurs and changemakers: Crowdfunding, Behavior Change Games, Collaborative Social Innovation, Grassroots Change Movements, Co-creation Communities, Social Curation, Transmedia Storytelling, Collective Intelligence, Social Live Experiences and Collaborative Consumption.

In each of these reports, we start by describing why they are important, how they work, and how brands might benefit from them; we then examine web platforms and brand programs that point to the future (that is already here); then finish by identifying some of the most important features of that future, with our recommendations on how to benefit from them.

Do subscribe to our email newsletter to receive an invite to download a free copy of the interactive iPad app.

Find out more: http://peopleslab.mslgroup.com/peoplesinsights/future-of-engagement/
Get the Kindle eBook: http://www.amazon.com/dp/B00D8ZZMDY

Published in: Business, Technology

#1 Crowdfunding: Ten Frontiers for the Future of Engagement

  1. 1. 1. CROWDFUNDINGPeoples Insights Annual ReportNow & Next:Future of Engagement
  2. 2. We are delighted to share that we will bepublishing the People’s Insights AnnualReport titled “Now & Next: Future ofEngagement” in January 2013 as an interactiveiPad app. The report will highlight the tenmost important frontiers that will definethe future of engagement for marketers,entrepreneurs and changemakers:Crowdfunding, Transmedia Storytelling,Social Curation, Behavior Change Games,Grassroots Change Movements, CollaborativeSocial Innovation, Crowdsourced ProductInnovation, Collective Intelligence, SocialRecommendation and Hybrid RealityExperiences.Throughout 2012, 100+ planners onMSLGROUP’s Insights Network have beentracking inspiring web platforms and brandprograms at the intersection of social data,citizenship, crowdsourcing and storytelling.Every week, we pick up one project andcurate the conversations around it — on theMSLGROUP Insights Network itself but alsoon the broader social web — into a weeklyinsights report. Every quarter, we compilethese insights, along with original researchand insights from the MSLGROUP globalnetwork, into the People’s Insights QuarterlyMagazine. Now, we have synthesized theinsights from our year-long endeavor in futurescanning as foresights into the future ofengagement.We believe, like William Gibson that, “thefuture is already here; it’s just not very evenlydistributed.” So, innovative web platformsin the areas of social data, citizenship,crowdsourcing and storytelling point towardsinteresting possibilities for brand programsthat leverage similar models to engagepeople. In turn, the web platforms and brandprograms of today give us clues to the futureof engagement tomorrow.In our reports on the ten frontiers that willdefine the future of engagement, we start bydescribing why they are important, how theywork, and how brands might benefit fromthem; we then examine web platforms andbrand programs that point to the future(that is already here); then finish by identifyingsome of the most important features of thatfuture, with our recommendations on how tobenefit from them.For the next ten weeks, we will publishthese reports one by one, then present themtogether, in context, as an interactive iPad app.Do subscribe to our email newsletter to receiveeach report and also an invite to download afree copy of the interactive iPad app.People’s Insights Annual Report
  3. 3. 3What is Crowdfunding?Crowdfunding involves people coming togetherto collectively fund projects they are passionateabout and help bring them to life. Crowdfundinghas been used to support a wide variety ofprojects, including disaster relief, citizenjournalism, political campaigns, startups, art(music, movies and books), game development,scientific research and causes. In return, fundersreceive a reward, which might include a product,a customized experience, equity or simplyrecognition, depending on the type of project.Microlending platforms like Kiva (video), peer-to-peer lending platforms like Prosper and micro-donation platforms like DonorsChoose (video) canbe considered to be predecessors to crowdfundingplatforms. However, crowdfunding in its presentform can be traced to the inception of platformslike indiegogo (video) in 2008 and Kickstarter(video) in 2009, both of which connect peopleto creative projects in need of funds. It enteredmainstream consciousness in 2012, when severalprojects on Kickstarter and other crowdfundingplatforms raised more than $1 million each – andup to $10 million – in funding. These includetechnology gadgets like e-paper watch Pebble; amusic record and tour by Amanda Palmer; gamingprojects like gaming console Ouya; and even acommunity center in Glyncoch, Wales.The success of such crowdfunding projectsshows that people are willing to offer financialsupport to people and projects they believein, and has created a new model for artists andentrepreneurs to fund their projects.Source: p22earl on FlickrHow Does Crowdfunding Work?On most crowdfunding platforms, a creator(an individual or a group) pitches a project tothe community and asks for small amounts offunding. Then, the creator and the communitypromote the project on the crowdfundingplatform, on the social web, and in mainstreammedia, to gather support for the project, andhelp it reach the funding goal within a specifiedduration.Successful creators often have a clear plan forcompleting their project and a public history ofsuccessfully completing similar projects, backedup by links to project website and personal socialnetwork profiles. By launching the crowdfundingproject in public, creators back up their projectswith their reputations.Most backers support crowdfunding projectsbased on trust, to help their friends or publicfigures they have long admired create somethingmeaningful. Others are inspired by the newnessof the idea or the rewards promised by theproject, such as backstage passes for a concertor being included in a film’s credits. Yet othersare attracted to the idea of co-creating theproject, by having insider access to updates andthe ability to contribute their own ideas to it.Crowdfunding platforms offer creators morethan just money. They also help creators testtheir ideas in public, build a strong communitythat supports them and spreads the word,and gain visibility on the platform itself, onsocial networks, blogs and sometimes evennewspapers and television.People and brands puttheir money wheretheir mouse is.
  4. 4. View the full infographic at intuit.comView the full infographic at pleasefund.usView the full infographic at intuit.comAs Stephan Angoulvant, design director at textingprinting company Lumi, shared:“For us, Kickstarter has been a powerful tool toconnect with a community passionate aboutour work, to help us collect critical insight, andto provide a time line that helps us organize ouractivities as we grow our project.”Platforms offer one of two funding models: ‘all ornothing’ in which the creator only gets the fundsif the project reaches the funding goal, and ‘keepit all’ in which the creator gets whatever amountthe project has raised, irrespective of whetherit has met the funding goal. Over time, threedistinct models of crowdfunding have emerged,focused on donations, lending and investments.As crowdfunding becomes mainstream, we arebeginning to see niche crowdfunding platformstargeting specific geographies, funding modelsand types of projects. Pozible (video), Zeczecand WeFund focus on diverse projects inAustralia, Taiwan and the U.K. respectively.ArtistShare (video) focuses on music projects,CrowdRise (video) and Razoo (video) on non-profits, LoudSauce (video) on meaningful ads,GiveForward (video) on patients, GoFundMe(video) on personal projects, SpaceHive (video)on public spaces, Credibles (video) on foodbusinesses, and Crowdfunder (video) andCrowdCube (video) on startups.Crowdfunding for BrandsSeveral brands have used crowdfundingprinciples in their programs to connect their fanswith worthy projects and non-profits (targetingbackers), and to encourage fans to start their ownprojects and catalyze positive change (targetingcreators).In the most popular model, brands ask theiremployees, customers or fans to vote for eligiblenon-profits to receive philanthropic grants. Manybrands also enable the community members todirectly back the non-profits by volunteering ordonating money. Several brands have launchedrecurring programs that follow this model,which include Chase Community Giving (video),American Express Members Project (video), andStarbucks Vote.Give.Grow.In another popular model, brands ask their fans toact as changemakers by creating their own projectsand gathering support from their networks toqualify for funding. Not only do these projectsreceive funding, but also visibility from the brandand its community members, and support fromthe brand and its employees to realize and scalethe idea. Branded programs that follow thismodel include the Pepsi Refresh Project (video),Benetton’s Unemployee of the Year (video) andMahindra Group’s Spark the Rise (video).Both of these types of crowdfunding programstap into the same dynamics as the crowdfundingplatforms. Brands provide change makers andnon-profits the opportunity to connect with a largercommunity, and offer their fans a range of projectsthat match their passions. Changemakers andnon-profits activate their networks to support the
  5. 5. 5projects, and keep backers engaged with updateson progress during the fundraising period. Thebrand provides credibility and visibility, beyondfunding. Finally, brands rely on the wisdom ofcrowds to identify projects to fund, and fans feelaffinity not only for their favorite projects, but alsofor the brand for creating the platform to supportthem.Crowdfunding case studiesThroughout the year, we have tracked theconversations around a number of crowdfundingplatforms and branded crowdfunding programsin our weekly insights reports and quarterlymagazines; here are a few highlights.Crowdfunding platform: KickstarterRead the full case study on our blog or onSlideshareSource: kickstarter.comKickstarter is the largest U.S. crowdfundingplatform, empowering artists and engineers toraise funds from individuals.Mike Bulajewski, a user experience designer,described Kickstarter as:“A place where artists and engineers can connectwith the people in direct peer-to-peer relationshipswho aren’t just buying entertainment, they’rehelping make dreams a reality.”Kickstarter focuses on funding of creativeprojects and fills a gap that was created by theslow economy and budget slashes. As journalistJames Reed observed in the music industry:“As the music industry’s financial resourcescontinue to crumble, more independentmusicians are turning to fans to directly financework that might not otherwise get done.”This need has helped fuel the growth andsuccess of Kickstarter. Journalist Patricia Cohennoted:“[Kickstarter] recently boasted that it expectedto raise $150 million in contributions in 2012.By comparison, the National Endowment for theArts, noted Yancey Strickler, one of Kickstarter’sfounders, has a budget of $146 million.”Kickstarter follows the ‘all or nothing’funding model, in which only projects thathave successfully met their funding goals –approximately 43% of all Kickstarter projects– receive funds. Kickstarter believes this model“protects everyone involved,” as projects withinsufficient budgets are less likely to succeed.Since 2009, Kickstarter has helped raise morethan $250 million for more than 24,000 projects.Crowdfunding platform: LoudSauceRead the full case study on our blog or onSlideshareSource: loudsauce.comLoudSauce is a crowdfunding platform that fundsadvertising for social good.The platform offers people a unique opportunityto broadcast messages that can help society. Associal activist Jeremy Williams commented:“Most of us can’t afford a billboard. But if we gottogether with like-minded people and eachchipped in a bit, perhaps we could use just a smallpart of the advertising network for somethingpositive.”This opportunity helps non-profits andorganizations reach larger crowds and createlarger networks of like-minded people. BloggerBeth Buczynski observed:“Most of these [social media] outlets requirepeople to “opt in” to receive updates and invites.This means that for the most part, organizationswith the ability to catalyze social and environmentalchange end up preaching to the choir.”
  6. 6. Source: mybanktracker.comSource: unhate.benetton.com/unemployee-of-the-year“Way to go, Chase- it is refreshing to see a “bigfaceless corporation” making things right. Thanksfor looking out for the little guys!”However, the need to campaign for votes andcompete with other charities has led to muchdebate amongst non-profits about the return oninvestment of participating in such programs. Asconsultant Carrie Hirmer commented:“For us, being in one of these contest-typegrants has been a wonderful thing so far. It maynot work as well for some organizations. It hashelped increase awareness of the need for ourproject and has served as a door-opener, so tospeak, for relationships that will last long afterthe contest ends.”This type of program also requires constantcampaign management and proactivecommunication with audiences. B.L. Ochman,a consultant and contributor to AdAge.com,who has written about this program at length,considers Chase Community Giving to be:“a model of what — and what not — to do in acorporate philanthropy campaign.”Branded crowdfunding program: BenettonUnemployee of the YearRead the full case study on our blog or onSlideshareIn 2012 Benetton’s Unemployee of the Yeargave €500,000 to 100 projects to celebrateyoung people’s ingenuity, creativity, and abilityto create new ways of addressing the problem ofunemployment.While the platform may not have an immediateimpact on traditional media buying andadvertising, it is finding support from bothconsumers and advertisers. As advertiser MichaelCaissie commented:“I work in advertising and my goal is to make amore human way of communication and thisconcept of ideas coming from the public is almostto me revolutionary.”Branded crowdfunding program: ChaseCommunity GivingRead the full case study on our blog or onSlideshareSince 2009, Chase Community Giving hasdonated more than $28 million to more than 500charities by asking its employees and customersto first nominate eligible charities, then askingits 3.8 million fans on Facebook to vote for theirfavorite charities.The four-year program has contributed muchlearning to Chase’s internal giving strategy.As Samantha Smith, journalist at NY Timessaid:“JPMorgan Chase’s goal with the abovecontribution is to continuously engagecommunities that care and are knowledgeableon change in the JPMorgan Chase Foundation’sgiving strategy.”The program has also helped spread the wordabout Chase’s philanthropic efforts and shapepeople’s opinion about the brand. As Julie Browncommented on Facebook:
  7. 7. 7Source: votegivegrow.com/Source: sparktherise.comInvolving customers also complementedStarbucks’ contribution to non-profits. AsStarbucks customer Suzanne C commented:“This seems like a good way for SB to not onlydonate funds to a non-profit but to also raiseawareness for the non-profits that are out there!”In return, customers feel a sense of pride forcontributing to worthy causes and a sense ofaffinity for Starbucks for making it happen. AsStarbucks customer Sarah commented:“Feels good to patronize a company that isphilanthropically minded.”Branded crowdfunding program:Mahindra Spark the RiseRead the full case study on our blog or onSlideshareIn 2012 and 2013, Mahindra Group is giving grantsof $1 million to 96 ideas and projects that candrive positive change in India under its Spark theRise program. Mahindra also connects changemakers with each other and mentors, to helpcreate an ecosystem for social innovationin India.While Benetton is famous for highlighting socialissues in its advertising, this campaign marksthe brand’s first effort to support these issuesfinancially. As Stuart Elliott, columnist atNY Times wrote:“For almost as long, critics have dismissed the[Benetton] ads as exploitative because they donot offer solutions to the problems or assistanceto the causes that could use financial help. Now,however, Benetton is going to put some moneywhere its mouth is.”Youth unemployment is a cause that has a largepassionate following globally, and the programhas inspired widespread coverage of the issueand participation from 42,266 unemployedyoung people. As NYTimes reader DJnoted:“Every little bit helps when you have no jobat all."The €5,000 grants and the relevance ofthe cause will help Benetton build a deeperrelationship with the youth market. As Adweekblogger Tim Nudd wrote:“They may be less provocative than last year’s,but perhaps they’ll make a more lasting differencein the lives of the target market.”Branded crowdfunding program:Starbucks Vote.Give.GrowRead the full case study on our blog or onSlideshareIn 2012, Starbucks Vote.Give.Grow gave $4million to 124 local non-profit organizationsbased on votes from My Starbucks Rewards card-members.The program created an opportunity forStarbucks to involve brand loyalists in itscorporate purpose. As social do-gooder TaraNami commented:“One of the focus areas of the StarbucksFoundation is helping the communities in whichthey operate, and during the month of April… we,the people, get to help them decide where and towhom it goes to in our very own communities.”
  8. 8. We also expect some niche crowdfundingplatforms to focus on connecting brands withcreators and backers. Projeggt (video) in Spain istrying to promote a model where brands sponsorprojects in return for custom rewards fromcreators.Already, we are seeing examples of brands,organizations and celebrities supporting projectson crowdfunding platforms. For instance, MozillaFirefox is offering matching grants at Crowdrise.Some brands will go further and create theirown crowdfunding platforms, and ask theircommunity members to fund projects andnon-profits on a matching grant basis, not onlythrough virtual actions such as voting.However, as branded crowdfunding programsbecome mainstream, and their novelty wears off,we expect that they will become more focused,with a stronger alignment between the brand’spurpose and the type of projects or non-profits itfunds.The program is a demonstration of MahindraGroup’s commitment to its corporate philosophy‘Rise.’ Ad veteran Ramesh Narayan commented:“Mahindra is making a statement it iscommitted to helping India, and backing it withaction. [Spark the Rise] is an eloquent statementof its positioning, unlike a mere advertisingcampaign that says the company is committedto some cause or the other.”The initiative taps into the passions of the Indiancrowds, as former ad-man Lakshmipathy Bhatpointed out:“The ‘rallying cry’ of Rise and the call to actionof ‘Spark the Rise’ couldn’t have come at a bettertime – there are heroes emerging from every walkof life and being egged on by the general public.”As consumers evolve in the digital age, it isimportant for brands to be seen as authentic andsocially responsible. Narayan commented:“As consumers get younger and more aware,these will be increasingly important criticalfactors affecting choice."The Future of CrowdfundingIn the near future, we expect equity-basedcrowdfunding platforms to become a popularway to fund startups across the world, as financialregulation is modified to allow allocation ofequity against crowdfunding. Such modelsalready work in markets like the UK.We also expect consolidation amongst the largercrowdfunding platforms, as large crowdfundingplatforms like Kickstarter and indiegogo becometruly global through organic growth, acquisitionsand partnerships. For instance, indiegogo isalready investing in supporting projects bycreators from across the world and building astrong global network of partners, and Kickstarterhas already expanded to the UK.In parallel, we expect even more nichecrowdfunding platforms that focus on an under-served segment or geography, as white labelcrowdfunding software like Launcht, Hayduke,Invested In, CrowdForce and Catarse becomemore powerful.
  9. 9. 9Learn more about us at:peopleslab.mslgroup.com | twitter.com/peopleslabPeople’s Lab is MSLGROUP’s proprietarycrowdsourcing platform and approach thathelps organizations tap into people’s insights forinnovation, storytelling and change.The People’s Lab crowdsourcing platformhelps organizations build and nurture publicor private, web or mobile, hosted or whitelabel communities around four pre-configuredapplication areas: Expertise Request Network,Innovation Challenge Network, Research &Insights Network and Contest & ActivationNetwork. Our community and gaming featuresencourage people to share rich content, vote/comment on other people’s content andcollaborate to find innovative solutions.The People’s Lab crowdsourcing platformand approach forms the core of our distinctiveinsights and foresight approach, which consistsof four elements: organic conversation analysis,MSLGROUP’s own insight communities, client-specific insights communities, and ethnographicdeep dives into these communities. The People’sInsights Quarterly Magazines showcase ourcapability in crowdsourcing and analyzinginsights from conversations and communities.People’s Lab:CrowdsourcingInnovation & Insights
  10. 10. Write to us to start a conversation on the future of engagement.:Pascal Beucler,SVP & Chief Strategy Officer(pascal.beucler@mslgroup.com)Janelle Dixon,North America Head of Insights(janelle.dixon@mslgroup.com)Dominic Payling,Europe Head of Insights(dominic.payling@mslgroup.com)Gaurav Mishra,Asia Head of Insights(gaurav.mishra@mslgroup.com)mslgroup.com | twitter.com/msl_groupMSLGROUP is Publicis Groupes strategiccommunications and engagement group,advisors in all aspects of communicationstrategy: from consumer PR to financialcommunications, from public affairs toreputation management and from crisiscommunications to event management.With more than 3,700 people, its offices span22 countries. Adding affiliates and partnersinto the equation, MSLGROUPs reachincreases to 4,000 employees in 83 countries.Today the largest PR and Engagementnetwork in Europe, Greater China and India, thegroup offers strategic planning and counsel,insight-guided thinking and big, compellingideas – followed by thorough execution.