This Case Study of Indiegogo comes from Olivia HU’s dissertation with Distinction for MSc. Digital Marketing Strategy, Trinity College Dublin, August 2020.
Abstract
In this qualitative study, how Indiegogo becomes new digital marketing tools to help Chinese businesses going global was researched. The digital marketing function has been defined as an online company presence in the process of overseas marketing. In the past literature reviews, crowdfunding was regarded as a useful tool to raise funds. However, there are C-levels using Indiegogo crowdfunding as digital marketing tools to help their business go global when they are making strategic decisions. To address this lack of knowledge, the researcher aimed to research how innovative hardware companies used Indiegogo as digital marketing tools and its correlation during their international expansion with crowdfunding. Therefore, the study analysed interviews with nine CEOs or directors from the most successful Indiegogo campaigns. The study showed that Indiegogo is the agreed great platform for overseas business expansion. It also showed the executive level has different understandings about digital marketing tools while going global. While mature companies agree on the digital marketing function of Indiegogo to acquire customers, SMEs tend to value the pre-sales and market testing function most while admitting the innovation branding effect of Indiegogo. Additionally, the C-level with more experience with crowdfunding has higher acknowledgement of the Indiegogo digital marketing function. Overall, this finding is useful as it shows an opportunity to develop a more transparent digital marketing service for crossing borders with Indiegogo targeting mature companies or SMEs respectively, which would be useful for researchers and companies as it would improve understanding for both the platform and entrepreneurs to face Covid-19 challenges.
Keywords: Digital Marketing, Market Test, Pre-Sale, Branding, Crossing borders, Overseas Crowdfunding, Indiegogo, International Expansion, Covid-19 Crowdfunding Strategy
Chapter 4: Analysis and Findings
Chinese innovative hardware and technology CEO and Directors were interviewed to obtain the most updated crowdfunding experience they had with Indiegogo to go global. The innovative companies’ participants are working with are: Xiaomi Corporation, Midea Group, Huami Amazfit, Balanx, GPD, Padmate, ForwardX, and CZUR. Central themes were identified from nine interview transcripts with translations. Both manual analyses and professional qualitative data analysis (QDA) software NVivo were used to uncover insights. All interviews were conducted with the online video/audio call using two recording phones, the speechnotes website for transcription, and a notepad as mentioned in the previous methodology section.
4.1 Participant Overview
In total, nine C-level were interviewed for the research project. The interviewees all had crowdfunding experience with Indiegogo before and moreover, they have worldwide overseas markets, which enable witnessing Indiegogo digital marketing functions and crossing borders with crowdfunding closely. Table 4.1 below outlines the detailed overview of the interviewees for this study:
Table 4.1: Interviewees Overview Details, 2020.
For reasons mentioned in the methodology, selected high-level interviewees made it possible to reveal the decision-maker point of view for a better understanding of the ecosystem and influence of crossing borders with crowdfunding. Qualitative analysis was begun by utilizing NVivo’s WordCloud to display the most mentioned words to finalize themes and develop insights.
Overall, the most mentioned words from all interviewees were “global, marketing, brand, market, product, audience” as seen in Figure 4.1a. All Interviewees’ Word Frequency Criteria was shown in Appendix 4.
Figure 4.1a: WordCloud Results of All interviewees, NVivo, 2020.
As mentioned before, there were interviewees from both mature companies and SMEs to provide observations and insights. Their experiences with crowdfunding marketing and international expansion had major similarities and different focuses. As seen in Figure 4.1b, SMEs use “entrepreneur and market”, Mature companies use “marketing and brand” most. While both sides referred to global audience most, SMEs focused on concepts like pre-sale and market test, and mature companies focused on innovation branding and overseas marketing throughout the interview.
Figure 4.1b: WordCloud of SMEs and Mature Companies Interviewees, NVivo, 2020.
4.2 Digital Marketing Tools for Customer Acquisition
After completion of the WordCloud analysis, the NVivo analysis was continued with a Text Search Query (include stemmed words) to check related topics with marketing/market as Figure 4.2a.
Figure 4.2a: Word Tree of “Marketing/Market”, NVivo, 2020
The understanding of digital marketing functions on the Indiegogo crowdfunding platform seemed to be different between the SMEs and mature companies group in term of usage. Digital marketing-related topics were gathered using the NVivo Mind Map. The Figure 4.2b below displays the digital marketing functions on Indiegogo eight companies have mentioned to utilise in the process of crossing borders with crowdfunding.
Figure 4.2b: NVivo Mind Map of Digital Marketing Functions of 8 Companies, NVivo, 2020
“What we are talking about in the crossing border context is “online company presence” rather than digital media only. We would define it as where overseas backers and entrepreneurs like us are connected via a digital marketing website to do marketing, branding, pre-sale and market test.” Interviewee 7
All digital marketing functions on IndieGoGo mentioned are summarized in the table below.
Table 4.2: Digital Marketing Functions Mentioned During Interviews, 2020
Marketing
As for the companies using Indiegogo as the overseas marketing tool, mature companies gave the most positive comments. They all agreed on the digital marketing function on Indiegogo.
“We promote star products to the global market and predict the customers’ expectation through Indiegogo. Our company highly relies on Indiegogo crowdfunding to do overseas marketing, especially the PR and KOL resources. It is more efficient than other ways to acquire customers and build B2B channels for the future.” Interviewee 4
Also, launching successful crowdfunding campaigns on Indiegogo does not only allow SMEs to obtain financial support, but also provide strong marketing partnerships and opportunities for the continuous expansion of overseas markets. Interviewee 7 and 8 both mentioned that they received co-branding opportunities, event invitations and media attention with the new innovation brand image brought by crowdfunding on Indiegogo.
Branding
Seven out of nine interviewees saw the branding opportunities brought by Indiegogo. Overall, Decision-makers with more crowdfunding experiences tend to endorse the branding effect of Indiegogo.
“We tested our innovative products and gained media exposure through Indiegogo. For marketing, we focus on sales led from Facebook advertising to Indiegogo crowdfunding. Compared to e-commerce, Indiegogo crowdfunding has more branding influence on innovation.” Interviewee 1
“We launched new products to win the niche market through Indiegogo. Integrating Indiegogo branding effect, we always do the forum marketing by ourselves to target more accurately.” Interviewee 2
Pre-sale and Market Test
While all companies endorsed the market test function of Indiegogo, SMEs also cared more about pre-sales function. Particularly, the first- or second-time crowd funders focused on sales more than marketing.
“Pre-sale and market testing are more important for my company. The secret of crowdfunding lies on launching innovative products which suit the Indiegogo platform itself. I don’t think there is an advertising system on Indiegogo, and the Indiegogo marketing package is not strong. We are operating our owned media, attending exhibitions like CES, and doing e-commerce with Amazon, Shopify.” Interviewee 9
4.3 Global Networking Tools for International Expansion
International expansion is the most important market factor for hardware companies in addition to the digital marketing field. As all interviewees have the overseas market, Indiegogo global networking function offers them foundations. All participants highly agree Indiegogo is a great platform for their overseas business expansion.
“The success of our crowdfunding campaigns is the true beginning of our brand going overseas. Crowdfunding has opened a whole new door for the brand. We obtained high-quality channel resources from all over the world, taking the most solid first step for the global distribution of products.” Interviewee 4
Text search query of “Overseas” or “Global” or “International” with stemmed word results in NVivo could be seen as Figure 4.3 below. When interviewees mentioned international expansion, they tend to use “brand, comment, content, market, culture, invitations, users, China, and Kickstarter.”
Figure 4.3: Overseas related Stemmed Text Search Query Results, NVivo, 2020
With the above results, four themes are summarized to explore the global networking functions on Indiegogo to help the business expand globally.
China Team
When asking what the best support from Indiegogo is when going global, half of the interviewees gave credit to Indiegogo China team support, especially when compared to Kickstarter. They accepted the marketing service from Indiegogo’s localized professional team, which enabled their campaigns to gain public recognition from users around the world once it was launched, thus taking the first step of the brand to go overseas firmly.
“If Chinese hardware companies choose to crowdfund on Kickstarter, it is difficult to have the opportunity to contact the Kickstarter official team directly. It is very inefficient to communicate back and forth through emails alone. However, Indiegogo has established a Chinese team to serve Chinese companies, which has added value to language communications, culture education, data sharing and crowdfunding expertise for Chinese hardware companies.” Interviewee 3
Global Invitations
All interviewees received global invitations to cooperate in various ways. After launching campaigns on Indiegogo, they were connected to global agents’ resources to open overseas markets. The crowdfunding campaigns did not only bring funds, but also global resources to open international markets as strong proof that they can succeed in their early adopters’ community on Indiegogo.
“After crowdfunding on the Indiegogo platform successfully, we received an official invitation from Amazon Launchpad to settle in, and directly obtained Amazon’s platform resources, making the product a milestone in global distribution. Also, we received cooperation invitations from online cross-border e-commerce platforms and offline distributors from all over the world.” Interviewee 4
Global Backers
All interviewees value the interactions with backers to receive feedback from product promotion to order shipping. They concluded Indiegogo backers give feedback to innovative products as an active community, and look forward to receiving products they have participated in optimization. Crowdfunding can verify the product before the product is formed, and collect valuable user feedback to optimize iteratively.
“After our campaign went online, it collected high-quality feedback from backers through the message section of the crowdfunding page and the Facebook community. The first version of the APP has no courses, and users can only follow NTC (Nike Training Club) or Keep training. After listening to the backer’s suggestions, our team completed a video with a training project before the product was shipped.” Interviewee 3
Company Transformation
One-third interviewees use Indiegogo crowdfunding to finish company transformation. They completed the market verification and successfully completed the transition to B2C. They believe B2C focuses on more things, such as traffic, branding, marketing, operations, channels, psychology, and even anthropology. Interviewee 8 even changed from ODM (Original Design Manufacturer) or OEM (Original Equipment Manufacturer) to D2C (Direct to Consumer) with the wide global audience.
“For companies that are new to the C-side, the period is generally more extended to succeed on the e-commerce platform, and the benefits are slower. We are one of the typical successful cases of B to C transformation through crowdfunding. We established global awareness first with Indiegogo, and finished global distribution through online channels. In addition to raising tens of millions of dollars in C-end orders on Indiegogo, we also successfully entered the B-end channels in more than 100 countries, winning reputation and funds.” Interviewee 8
4.4 How IndieGoGo Helped Companies to Go Global
The process of how Indiegogo helped companies go global was different case by case, but there are some similarities to sum up. Figure 4.4 below displays the digital marketing process on Indiegogo company 6 has mentioned using in the process of crossing borders with crowdfunding.
Figure 4.4: Map of Digital Marketing Process of Company 6, 2020
“Indiegogo helped us from building the pre-launch page to community management. They provided consistent marketing promotion assistance and connected us to crucial resource partners. For example, they introduced us to foster cross-promotion with other campaigns to create a more significant influence. Indiegogo’s newsletter also drove massive revenues for our campaigns. We followed Indiegogo’s guidance to use digital advertising, and AB tested our ads to drive our international success by visualized data.” Interviewee 7
“Indiegogo’s digital marketing plans for us include rewarding backers for sharing crowdfunding projects with relatives and friends and encouraging backers to share product usage stories in the comment section. Indiegogo also invited professionals to help us make an official unboxing video, spreading the video through the Indiegogo project crowdfunding page and official social media at the same time. Eventually, the number of backers increased instantly by 60% within three days.” Interviewees 5
4.5 Covid-19 Influence on Crossing Borders with Crowdfunding
Under the Covid-19 situation, seven out of nine interviewees say their businesses continue to grow or stay the same. They believe they have innovative products in the niche market to be competitive, and will continue to go global with tech crowdfunding platform Indiegogo. Compared to traditional e-commerce, Indiegogo backers are passionate about innovative products and support campaigners in difficult times as a community.
According to the Indiegogo website, their backers’ are influenced less due to their higher salaries. More than 54% backers’ salaries are higher American average annual salary 63,179 dollars, and 24% backers’ salaries over 124,999 dollars. That is why the backers are stable or even stronger to contribute to campaigns during Covid-19.
However, outdoor activities are heavily impacted by Covid-19. The travel industry is experiencing a challenging time. Also, the manufacturing speed is not as satisfying as before. However, all interviewees are willing to continue to work with crowdfunding platform Indiegogo to go global.
“Our AI-Powered Suitcases for travelling are heavily impacted with a 85% reduction in sales during Covid-19. We also stopped all the advertising during the lock-down to minimize the cost. At the moment, we are trying to change our B2C business into B2B.” Interviewee 6
“There are influences on taking more time for logistics. It is clear to see overseas buyers are having declined purchase demand. We are changing the operation strategy to be more efficient, and will keep going global with crowdfunding since we have longer production time compared to traditional e-commerce. It allows us to receive orders and funds first, and produce products with the more flexible schedule in three to six months” Interviewee 7
For the opportunity side, home office, home gym, home security, kitchenware, home toys, and home cleaning products are performing well on the Indiegogo platform, which provides new opportunities for innovative hardware or technology companies. Overall, the platform traffic and funds are still increasing compared to last year.
4.6 Social Media Advertising Boycott Influence on Digital Marketing
As all interviewees agree, Facebook advertising helped them most to lead traffic to the Indiegogo campaign page. The recent Facebook Ad Boycott activity is influencing the advertising choice for decision-makers. While hundreds of big companies joined #StopHateforProfit to pause spending on Facebook advertising, the campaign expanded globally. Considering the overseas brand images, one interviewee decided to pause advertising.
“We stopped advertising during Covid-19, and it is important to respect racial and ethnic differences and avoid discrimination when building overseas brands. Therefore, it becomes one of my considerations to make the right marketing decision.” Interviewee 6
As Indiegogo platform provides a chance to build direct to consumer brands, most interviewees depend on Facebook advertising to drive crowdfunding traffic. They are unable to participate in the Facebook boycott the same way big companies are doing since DTCs direct response ads meant to acquire customers to crowdfunding campaigns rather than increasing brand reputation only.
“I believe there are still many smaller advertisers that will continue to advertise on Facebook. It is more like a political campaign to stop any Facebook advertising to avoid being related to discrimination, bias, and hate content. We haven’t thought about it too much since we are a start-up to focus on sales led from Facebook ads to the crowdfunding page.” Interviewee 1
As for research objective 1 to explore the ways how Indiegogo becomes new digital marketing tools for SMEs or mature companies, this study finds that while mature companies agree on the digital marketing function of Indiegogo to acquire customers most, SMEs tend to value the pre-sales and market testing function most while admitting the innovation branding effect of Indiegogo. As for research objective 2 to explore the influence of crossing borders with crowdfunding on helping the business go global, all participants highly agree Indiegogo is a great platform for their overseas business expansion, including traffic guidance and support, global backers and invitations, professional and local team service, and direct to consumers branding, etc.
4.7 Recommendations for International Expansion with IndieGoGo
It can be seen from both this study’s nine interviews and Indiegogo China brand survey from six hundred Chinese innovative hardware entrepreneurs that Indiegogo is considered to be a great platform to enter overseas markets. In the Indiegogo China brand survey, 95% of the respondents agreed on Indiegogo’s value proposition stated in the text. Very few people gave disagreement. The section below proposes solutions about how to improve the international expansion process with Indiegogo based on interviewees’ insights.
Figure 4.7: Recommendations for IndieGoGo, 2020.
Reward-based crowdfunding campaigns on Indiegogo can act as effective marketing tools to help promote small business or enterprise to new and global backers, which is also the overseas customers (Cox and Nguyen, 2018). From the interviewees’ feedback, Indiegogo already offered high selling points with the global target audience and professional local service team. However, interviewee 7 with experience running ten crowdfunded projects believed Indiegogo needs to build a more open platform with transparency. Belleflamme et al. (2014) suggest how to increase the chances of successful crowdfunding initiatives or solve asymmetric information on the platform need to be researched further. Interviewee 8 said the Indiegogo team needs to have more precise answers about the overseas market regulations, especially regarding tax. With Covid-19 ongoing situations, the Indiegogo team is giving products insights to serve entrepreneur crowdfunding decisions better, which is useful for all interviewees. According to the top 100 fastest growing & declining categories in E-commerce from Stackline, the kitchenware, home gym, and home office are doing well, while travelling and outdoor products are heavily impacted (Stackline, 2020).
4.8 Covid-19 Digital Marketing Strategy to go global with IndieGoGo
The fight against the Covid-19 has lasted for half a year. Although the global economic situation has not yet recovered, industries have gradually worked out a series of new countermeasures. As a global crowdfunding platform, Indiegogo also provided a new way out for many technology companies to help them get sufficient production funds and support from global users. Indiegogo China team mentioned five methods for improving companies’ digital marketing strategy to go global with Indiegogo, which further developed the section 2.41 literature review and section 4.4 of the digital marketing process on Indiegogo.
Focus on Social Media Advertising
People staying home provides an excellent opportunity for online promotion and can achieve better than usual investment effects under a reasonable budget. Indiegogo recommends that the campaigners conduct pre-testing of its brand and marketing materials through “A/B testing” to optimize the click-through rate and conversion rate, thereby increasing the ROI of the advertising investment.
Improve Video Marketing Communications
According to Forrester’s research results, if a picture can cover hundreds of words of information, the video can express far more than the picture, reaching 1.8 million words. Video is a universal communication method between companies and global backers. Whether to explain the unique selling point or update the schedule, shooting video is the most eye-catching way to display. As the fastest and most adequate way to express brand positioning, video marketing plays an essential role in crowdfunding to reach users accurately. As discussed in section 2.41 literature review, as a kind of content marketing, campaign videos can be easily integrated into websites and shared on social media widely (Chen et al., 2016).
Build Word of Mouth and Brand Loyalty
Under the global epidemic, people spend more time on social media platforms at home. Indiegogo recommends maintaining a close and stable relationship with users through social platforms more efficiently, which helps products get support from potential users. The interaction can bring not only a high crowdfunding performance but also the long-term brand loyalty and word-of-mouth communications, which will lay reliable community support for future promotion plans.
Do Email Marketing A/B Testing Earlier
Email marketing is one of the dominant channels to gain the attention of supporters in the early stage of crowdfunding. It is particularly important to develop email headers that can quickly capture users’ attention to resonate with user groups. To better increase the project’s ROI on email marketing, Indiegogo recommends “A/B testing” to conduct early and small-batch tests on email content to achieve a higher click rate. After the test is over, the group of emails with higher performance can be sent to other email users. Indiegogo Pre-launch Page is also the right place to verify the accuracy of product positioning and marketing strategies through “A/B testing” to test popular pictures, text, and layouts to achieve a higher conversion rate.
Keep Community Posted in a Transparent Way
The global supply chain and logistics disruption caused by the Covid-19 will undoubtedly have a direct impact on production and delivery. Campaigners need to synchronize information with the users who support you in time. If there is a delay in production and delivery, they should maintain transparent and open communications to let backers know the challenges, so that backers can fully understand the challenging situations, and get more supporters. Patience and support from backers will have a positive impact on global brand building to avoid any refund applications.