Twenty years ago, the term “crowdfunding” didn’t even exist. Today, crowdfunding is a global, billion-dollar industry. And the future of crowdfunding is bright — by 2030, the industry is projected to double in size.
Crowdfunding is constantly evolving and growing, shaking up the game for entrepreneurs, investors, and consumers alike. To stay abreast of new developments, it’s important to study the crowdfunding landscape and keep an eye on emerging trends.
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Why you should watch the trends in crowdfunding
If we had to define crowdfunding backers in one phrase, it’d be “people who want cool stuff, at a discount, before anyone else.”
Backers are innovators and early adopters. We all have that friend who knows about the new cool thing before it gets popular. That’s your target audience — people who want to be in the know, ahead of the curve.
As a product creator, you should likewise stay on top of the industry. You want to be at the forefront of the crowdfunding future, not lagging behind your competitors. By anticipating future crowdfunding campaign trends, you can optimize your marketing strategy, stay relevant with key audiences, and utilize the latest technological tools.
Crowdfunding trends to keep an eye on:
Crowdfunding is innovative. Cutting edge. By definition, it’s all about the new. As technologies, culture, and interests, and economies evolve, so will crowdfunding. We anticipate these 4 trends in crowdfunding:
Location-based marketing
- Event marketing
- Influencers strategy
- Reward structures
Location rewards
In many ways, crowdfunding has leveled the playing field for entrepreneurs. Still, not all campaigns are created equal. Research shows that location plays a role in crowdfunding success. Home bias is a factor — backers are more likely to support campaigns in their own country. Also, campaigns located within geographical clusters have a higher likelihood of success.
Geographical clusters are areas of unusual competitive success for particular industries. Think Silicon Valley for tech or Hollywood for entertainment. The reason is simple; birds of a feather flock together. And when you’re surrounded by people, networks, knowledge, and resources relevant to your field, you’re much better positioned to succeed.
Geographical clusters do exist in crowdfunding. The US and Canada make up a huge chunk of the market, with Los Angeles, New York City, San Francisco, Seattle, and Chicago historically being the best US cities for crowdfunding. Kickstarter even has Advanced Search capabilities allowing backers to filter by location along with product category and tags.
So what does this mean for your campaign?
In 2024, learn how to leverage location-based marketing. With geo-targeting, geofencing, and beaconing, real-time location is more sophisticated and granular than ever before. Expect more advancements on the horizon.
Start analyzing your target market. Where is your audience predominantly based? Which countries, regions, and cities should you target? Which should you exclude from your advertising? The better you define and segment your audience, the more you can take advantage of location-based marketing as the technology improves.
Public events
When you think about marketing, what comes to mind first? Likely, you think of digital channels like Instagram, TikTok, or even commercials on TV. But if digital marketing is your only focus in 2024, you’re missing out.
This year, pay attention to event marketing. Experts agree, events drive major business:
- Nearly 80% of US marketers use events to boost sales.
- More than half of marketers believe event marketing drives more business value than other marketing channels.
- 3 out of 4 event attendees say that their opinion of the company and brand improved after attending.
Events are a two-pronged attack. First, brand awareness: events are opportunities to display your logo, interact with customers, and generate leads. Second, thought leadership: events allow you to build your network, share ideas, and inspire change.
If you’re in the games industry, event marketing is especially huge. Here are the major board game conventions you want to hit:
If you’re a first-time creator wondering how to start crowdfunding, don’t miss our Crowdfunded Summit. We have keynotes from the CEOs of Kickstarter and Indiegogo along with 25 other crowdfunding experts. You’ll meet fellow creators, participate in live Q&A’s, and gain practical insights for your crowdfunding project.
Influencers
We can’t talk about trends without bringing up influencers. Love them or hate them, they deliver serious revenue in today’s consumer market.
- Influencer marketing is a $22.1 billion industry.
- 8 out of 10 consumers have purchased a product after seeing it recommended by an influencer.
- 36% of brands say influencer content outperforms branded content.
Broadly speaking, there are five different types of influencers that you can leverage for marketing:
Nano: 1,000 – 9,999 followers
Micro: 10,000 – 49,999 followers
Mid-tier: 50,000 – 499,999 followers
Macro: 500,000 – 999,999 followers
Mega: 1,000,000+ followers
But follower count isn’t everything. An up-and-coming influencer gives you better ROI than an influencer already at their peak. When evaluating influencers, pay attention to:
Reach: The total number of actual people that see their content.
Impressions: The number of times their content is displayed, including times it’s replayed by the same person.
Engagement rate: The degree of connection and commitment from their audience. This is measured by the total number of interactions (likes, comments, shares, etc.), divided by total follower count, multiplied by 100.
We recommend skipping the Mega, Macro, and Mid-Tier and going straight to Micro and Nano influencers. They typically have much higher engagement and have a more specific industry, interest, and topic focus. In 2024, look for trendsetters — people propelling the future of crowdfunding, not riding the waves of the past.
Are rewards enough?
Crowdfunding falls into 4 major categories:
- Rewards-based crowdfunding: Backers contribute funds in exchange for a non-monetary “reward,” usually a product or service. You’re probably most familiar with this one. Kickstarter and Indiegogo are the most popular rewards-based platforms.
- Equity-based crowdfunding: Investors contribute funds in exchange for equity like stocks or convertible notes.
- Debt-based crowdfunding: Also known as peer-to-peer lending. Investors loan money and receive it back with interest.
- Donation-based crowdfunding: Backers donate without receiving any financial return. Usually, it’s for a charitable or personal cause. GoFundMe is the best-known donation-based platform.
Although equity crowdfunding is on the rise, rewards-based crowdfunding is still, by far, the most popular route for product creators. And the gamut of reward offerings is constantly in flux. You can offer rewards in different ways, including:
- Early access: Backers get access to your product before the general public does.
- Discounted pricing: Backers get the product at a lower cost than what you will charge later.
- Exclusive or limited edition items: Backers get your product in limited edition colors, designs, or models.
- Personalized Items: Backers get signed copies, name engravings, or custom messages that add a personal touch to their rewards.
- Recognition: You acknowledge backers by name on your website, packaging, social media, or campaign page as recognition and thanks for their support.
- Behind-the-scenes access: Backers receive insider updates and behind-the-scenes previews of your creative process.
- Collaboration opportunities: Backers are invited to brainstorm ideas, contribute feedback, and vote on aspects of your brand.
- Merchandise: Backers receive branded merchandise like T-shirts, hats, or posters.
- Experiences: You treat backers to lunch, invite them to tour production facilities, or organize VIP, members-only meet-ups.
In 2024, be open-minded about what crowdfunding rewards can look like. You can offer way more than a UPS package in the mail. Be imaginative — the sky’s the limit!
What is the future of crowdfunding?
The crowdfunding industry is still very, very new. But it’s one to watch, and experts are definitely staying tuned.
So what’s ahead for us? While the future is never certain, we can predict crowdfunding growth by analyzing current patterns:
- In North America, crowdfunding generates $17.2 billion every year
- Crowdfunding has a 16.1% compound annual growth rate (CAGR)
- Games is the most successfully funded category on Kickstarter, followed by Music and Film & Video
- Productivity, Home, and Innovative Products are top categories on Indiegogo. Hotels and Glamping is emerging as a niche category.
- People aged 24 to 35 are most likely to participate in crowdfunding campaigns.
- 53% of email shares, 12% of Facebook shares, and 3% of Twitter shares of crowdfunding campaigns convert to pledges.
- Team-driven crowdfunding campaigns raise 38% more than solo campaigns.
- Campaigns with personal videos raise 105% more than those without videos.
- 80% of successfully funded Kickstarter projects raised less than $10,000.
Final thoughts
We can’t 100% predict the future, but one thing is clear: crowdfunding is trending upwards. Backers want to discover what’s new, exciting, and relevant. Investors want to make informed decisions. As a crowdfunder, it’s important to understand where the market is headed and optimize your crowdfunding marketing strategy accordingly. For us here at LaunchBoom, we’re certainly keeping eyes and ears wide open.
Today, we talked about trends in:
- Crowdfunding location
- Public events
- Influencer strategy
- Campaign rewards
