The Only Crowdfunding FAQ You Should Ever Need.
Q: Why do you refuse to accept a percentage of crowdfunding funds raised instead of the fees you charge. You’d be more motivated and stand to make more money, right?
This is a short question with a long six part answer.
1) We can’t. We do crowdfunding public relations – not crowdfunding advertising or marketing or crowdfunding sales. We’ve been members in good standing of the PRSA (The Public Relations Society of America) for years and subscribe to the PRSA code of ethics which frowns on such practices. Similarly, the public relations industry as a whole takes a very dim view of paid-for-placement.
While paid placement, strictly speaking, is defined as “We’ll pay you X dollars for a PR piece on Y website” the acceptance of a percentage of funds raised for a successful crowdfunding campaign comes close to being a distinction without a difference.
2) We can’t. Respected media outlets detest “paid placement” PR. If we were to charge, demand, require or otherwise ask for a percentage of a campaign’s funds as a condition for promoting a crowdfunding campaign, we’d be blackballed, blacklisted and basically out of business. Why? It amounts to paid placement in the sense that we would, Heaven forbid, stand to gain financially through a media relationship. If we were to engage in such a practice, any and every respectable news outlet would refuse any of our crowdfunding PR pitches by deleting our emails upon arrival or hanging up on us when we call them on the phone. And where would that leave Crowdfund Buzz? Out of business. The shining example of this in action can be read here. Thanks but no thanks.
3) We can’t. We have no moral or rightful claim to any percentage of sales generated through your crowdfunding project. Why should we have any claim to YOUR idea? YOUR product? YOUR service? It’s yours. You and/or your team developed it. You put in all the hours day after day and week after week. You poured money into your idea to make it a reality, if only a prototype or a beta product. We can’t in good conscience hook our claws into your baby and rip out our piece. Our money is earned morally, honestly, ethically and fairly in doing our best to get your crowdfunding campaign all of the attention we possibly can for the fees we charge.
4) We can’t. Putting aside the three above answers, while each one is epic and inviolable in its own right, we’ll take a more pragmatic stance in answer #4. We can’t hitch our wagon to your creation as the only source of our income. And nobody else in the crowdfunding marketing or promotion business does either. Shop around and see for yourself. Nobody will advertise a crowdfunding campaign with no fees up front on the hope you beat the odds and are among the 35% of crowdfunding campaigns that, at the least, hits their goal. Other crowdfunding promotion firms will charge you anywhere between $1,500 to $15,000 UP FRONT and then charge you anywhere between 6% to 35% of whatever your campaign raises.
Why do crowdfunding marketing agencies charge a lot of money up front PLUS a percentage? Because they refuse to lose money on crowdfunding campaign promotion while they make sure they take every dollar they possibly can from you. And that is perhaps one of the only possible cases where we agree with our competition – but only partially. We don’t agree with their practice of charging outrageous fees up front PLUS a percentage of what the campaign raises, but we do agree that it’s impossible to start work on crowdfunding advertising without being paid up front.
What if not enough people like your book, your film, your music, your new line of panties or feminine products or tech gadget? What if there are market forces at work beyond anyone’s control? Even the most incredible amounts of crowdfunding publicity doesn’t automatically mean a crowdfunding campaign will succeed.
Check out the J Peterman Kickstarter case study to see exactly what we mean. What if the PR firm that got all that publicity for J Peterman only got paid a percent of the Kickstarter? They would have lost a heck of a lot of money because the Kickstarter failed even with all of that epic media coverage listed in the case study.
If we relied on percentages purely for company income, we’d lose all the money we paid to our staff writers, our social media people, our publicists and our suppliers who we pay to deliver the news of your crowdfunding campaign to the world. And, once again, we’d be out of business. Why should we be punished for the fact that we did our job and delivered the message to an audience of deaf or disinterested people? Why should the messenger be punished for doing his job? Once again – thanks but no thanks.
5) We can’t. Federal law in the United States makes it illegal for us to get any sort of percentage or bonus for helping an equity crowdfunding campaign raise funds. That’s because we’re not a registered or licensed broker or dealer and we don’t want to be. We’re public relations experts, not stock brokers. Without a clear cut policy we can easily find ourselves in legal trouble if someone signs on as a crowdfunding PR client for an equity crowdfunding campaign with any sort misunderstanding or misapprehension whereby we agree to receive a percentage of the funds they raise. We’ll say it again — thanks but no thanks.
6) We can’t. We feel very strongly that crowdfunders need some of their own skin in the game. We’ve seen crowdfunders set up their project, slap up some cheap or free pictures and are all set to launch a crowdfunding campaign to raise funds so they can build their prototype and mass produce their gizmo. Or shoot their film. Or write that book. Then they ask us to promote their project ON SPEC with the only hope of us getting paid is if they succeed. In other words, the crowdfunder has no risk. If they have zero risk they have zero reason to care about their campaign. By asking us to promote a crowdfunding campaign with no money up front makes it easy for them to fire off 1 or 2 or 10 crowdfunding projects and not care about any of them; they just hope that if they throw enough things on the wall something will stick. When the crowdfunder puts up his or her money they’re showing faith in and commitment to their own design or idea.
7) We can’t. The world of advertising/marketing/pubic relations doesn’t work that way. Learn everything you need to know here.
Q: How did you manage to score so much earned media for you and your crowdfunding clients? CNBC? Fox News? Forbes? Morning Drive Radio? All the rest? Whoa!
A: In two words: Relationships and reputation. Over the years we’ve developed relationships with reporters, journalists, show producers and bloggers. We’ve also built a reputation that members of the media respect. When we reach out to one of our contacts with a crowdfunding public relations pitch, the person on the receiving end sits up and pays attention to us. That’s why we deliver the highest potential return for crowdfunding PR. All of the proof of that is right here in this website.
Q: According to your crowdfunding success gallery, you’ve helped crowdfunding campaigns raise over $500,000, $1,000,000, $2 million and even $3 million. How is this possible? Can you do this for my project?
A: That’s a very long story with a very good answer reserved for our clients who quickly learn from us how it happens. Can we help you reach crowdfunding success too? We sure can. Hire us and see for yourself.
Q: When can I expect to receive my press release draft?
A: You’ll receive your press release draft the next business day assuming we have the preview link of your crowdfunding project.
Q: What is Public Relations exactly?
Public relations helps build awareness of companies, products, services, technologies, people and issues among key audiences and influencers. Crowdfunding public relations helps crowdfunders create an identity in the industry, media and community. Public relations is the use of established public forums (social media platforms, magazines, newspapers, TV and Radio etc.), to deliver a message to a targeted audience. Public relations is an executive-level function much like finance, accounting, human resources and law. There is a basic methodology that includes five points: goals, objectives, strategy, tactics and target audience.
Otherwise stated, PR is about building trust and often includes creating a strong brand and great reputation to allow you to build relationships with the public. For your crowdfunding campaign, those relationships will be with the public at large who are potential backers as well as members of the media – TV, Radio, Print, Online or Blog. Your relationship with either of these audiences may or may not be mutually beneficial at any given time. Great PR creates mutually beneficial relationships and incites change. Superior PR can help you change behaviors and opinions in your favor.
Q: What Can Crowdfunding Public Relations do? And can’t?
Here’s the good news: Public relations can add credibility to any crowdfunding campaign and give authority to the crowdfunder via organic news that crowdfunding advertising can’t while creating an opportunity to conduct market research for your product/service at a far lower cost than advertising. Crowdfunding PR can also establish or increase public awareness of your crowdfunding campaign to pivotal buyer and influencer audiences. Crowdfund Buzz deploys “call to action public relations” to drive potential backers to a crowdfunding campaign so consumers can make an on-the-spot decision to back a project.
Here’s the not-so-good news: With public relations you’re at the mercy of the editor, producer, reporter, journalist or blogger who ultimately decides what they will or won’t chose to share with the public. There is no guarantee of how much media coverage you’ll get, the placement of any such coverage, how often or where or if your crowdfunding news will appear anywhere at all. With public relations we’re trying to sell a member of the media your story. Even if the journalist “buys” the story, there is no guarantee of how or when or even IF she’ll write a crowdfunding article about your project.
Here’s some more good news: PR has the advantage of neutral third-party credibility. People tend to believe what they learn from trusted media sources much more than the ads they see or hear. In fact, studies show that a consumer of modern media is seven times more likely to respond to public relations as opposed to marketing and that news items published or broadcast are four times more believable than advertisements.
Q: Should I do crowdfunding PR, crowdfunding advertising or both?
Both. If you can afford it. We’re big believers in getting the word out. Crowdfunding public relations is one way of doing that. Crowdfunding marketing through things like Facebook ads is another. While public relations and advertising have similar goals, the methods are very different. If you’re on a tight budget and can only pick one then go with crowdfunding public relations. That’s because you’ll get a lot more bang for your buck.
Q: Does Crowdfund Buzz guarantee results?
No. Public relations can never be attached with guarantees beyond the guaranteed syndicated placement we offer. There are many outside factors that converge on a crowdfunding campaign (business, economic and unknowable third-party factors outside of any crowdfunding PR firm’s control) including competing products or services, price pressure, market demand, questions of quality, doubts on the ability of the crowdfunder to deliver, consumer behavior and preferences, possible media bias and major prevailing events. Therefore, Crowdfund Buzz offers no guarantees, warranties or refunds on any of its services. Any individual or organization offering you a guarantee is trying to fool you. If they’re in crowdfunding PR like we are, they may be in violation of the Public Relations Society of America’s code of ethics, which highly discourages such behavior. Crowdfund Buzz is a member in good standing with the PRSA and strictly adheres to the PRSA code of ethics.
Consider this one single challenging factor – among many – we here at Crowdfund Buzz face every day. The crowdfunding public relations pro is competing against more and more people for the attention of fewer and fewer journalists. Existing media relationships and contact lists only work so well or go just so far. A sad reality in the modern PR world is that these contacts lists are bought and sold and sometimes just given away to anyone and everyone with a pulse and something to sell. The fallout from this has been severe; Joe the Plumber and Carl the Crowdfunder is spamming journalists with pitches that are of utterly no interest (imagine the editor of Better Homes and Gardens getting a crowdfunding PR pitch for a new VR game with more gore than an episode of The Walking Dead) which leads to journalists with jammed up inboxes and flooded phone systems. We blogged about this as well (search our blog for “spamming journalists” and read a veteran member of the media set the record straight. Equally poignant words come from Susan Adams at Forbes who has said this in her article The Most Stressful Jobs of 2014:
“Other jobs on the most stressful list that may seem surprising: public relations executive and senior corporate executive. Though many people may picture PR execs wining and dining and taking lunch with friends and connections around town, in fact they face almost constant rejection from people like me. I am subject to such an onslaught of PR email—usually more than 100 a day—I don’t even reply to most of the notes I get. I’m sure that is discouraging and stressful to anyone who approaches me.”
This article was published on January 7, 2014. She’s written a similar article every year. Nobody should be surprised if Ms. Adams revisits PR in her 2018 article citing journalists like her receiving over 150 emails per day while her cellphone crashes from voicemail overload and Forbes front desk receptionists just quit their jobs and storm out of the office without a word or a day’s notice – in tears.
Then think of true crowdfunding PR professionals like our glorious leader Howard Sherman. More than a few members of the Crowdfund Buzz staff is surprised he’s not drinking Jack Daniels by 10 AM as clients demand results that we make clear are impossible to promise as members of the media are more difficult to reach than ever. We definitely give all of our crowdfunding campaigns our very best effort. Each and everyone one of us rise up and meet our challenges with a smile on our face and deep wells of strength in our soul. That’s how we managed to score more epic media coverage of crowdfunding campaigns than every other crowdfunding PR firm in the world – combined. As explained clearly in this FAQ; we will work hard for you and follow through on all of our commitments but results of any kind are absolutely impossible to guarantee.