Snapchat helps brands showcase their personality, facilitates matching of personality of consumer and brand, increases levels of engagement due to intimate communication channelRead More
It is widely known that sports are the most popular hobbies people cultivate around the world, jogging, golfing, cycling, swimming, surfing, triathlon and hundreds of other sports are practiced by ordinary people whose profiles vary as much as the modalities practiced. This leads to electronic gadgets, social media and the Web 2.0 that are transforming the landscape of the “weekend enthusiast” by empowering and connecting people from all around the world.Read More
Social media has significantly restructured the communication of companies - influencing organizations, the consumer and brands all around. Facebook, Twitter, YouTube and Instagram together register more than 2.7 billion active users who spend an average of 2.4 hours daily on these platforms (Adweek, 2014). This corresponds to 39% of the world’s population – illustrating the immense power of online users. Consumers are no longer search for information passively; they actively create content and moderate discussions on brands (Hanna et al., 2011). Nowadays, we are living in an era where corporate communication is democratized as the power over communication has shifted from organizations to consumers (Kietzmann et al., 2011). Brands had to realize that online branding is an open source activity controlled by the customer rather than by brand managers (Fournier & Avery, 2011). Posing simultaneously both an opportunity and a threat, this consumer empowerment has a significant impact on how industries operate – the luxury industry being no exception (Dubois, 2014). Due to the enormous increase of online users, digital marketing and especially social marketing has become a mandatory element for every company (Hanna et al., 2011). But why have especially luxury brands struggled so long to invest in social media?Read More
To illustrate the opportunities social media present to individuals I would like to look at some examples where everyday people have been able to create strong personal brands and become new type of celebrities- celebrities of social media. Lets first look at second biggest social media platform YouTube, it has more than a billion users, every minute more than 300 hours of videos are uploaded on the site and everyday people watch billions of videos (youtube, n.d.).Read More
Internet emergence of Web 2.0 has tremendously empowered individuals by providing the tools for successful personal branding. The advantage of Web 2.0 is that no longer the knowledge of complex coding language is necessary, this provided anyone with the opportunity can generate their own content online, upload their pictures or videos and directly share it in virtual world. (Labrecque, Markos and Milne, 2011). The information that people generate online leaves a digital footprint that indirectly results in personal branding. (Lampel and Bhalla 2007; Madden et al. 2007 cited in Labrecque, Markos and Milne, 2011). As such, social media has become an essential tool through which people express and present themselves and learn about others (Vazire, Gosling 2004 cited in Labrecque, Markos and Milne, 2011).Read More
Times are gone when travel experiences only started at the chosen destination. In times of online travel communities like-minded users can already build relationships, share travel experiences, information and tips during their planning process. The Web has turned into a ‘travel square’ (Wang et al., 2002) that allows the stimulation of interaction and exchange, also known as electronic word of mouth (eWOM), to happen on a common platform. Speaking of those, travelers can choose from numerous opportunities such as social networking sites, fan sites, travel forums and blogs or brand-based sites. Focusing on user-generated content in online travel communities, special emphasis is placed on the latter, namely brand communities in the tourism sector. This form of firm-consumer-consumer interaction represents a renewed version of traditionally applied firm-customer engagement methods.Read More
January 1, 2015
Written by Master Student at Lund University
When creating a new venture, a successful establishment of the brand is a crucial activity in customer acquisition process and order to create a favourable reputation (Bresciani & Eppler, 2010). Small enterprises generate economic growth and create working opportunities to the society. However, banks are often reluctant to take risks and venture capital firms looking for bigger companies and require quick results. This denotes difficulties for new ventures to obtain financing through traditional approaches and to even get started with the business idea (CrowdCube, 2013). Moreover, with today’s noise in the market sphere, it is extremely important for the new venture to stand out and build a brand in order to survive. There are several channels where entrepreneurs can promote and communicate their brand. As the new media landscape opens up for opportunities it also raises challenges, such as building establish a brand in a short time and send a consistent message regarding the brand value (Winer, 2009).
A relatively new path to get funding and market validation in an early stage is through crowdfunding. In this short paper, I will examine the topic of crowdfunding as a tool to build brand awareness through social media channels. In order to observe this further, I aim to define the area of crowdfunding, start-up branding and the essence of word-of-mouth in an online setting. Additionally, I will base the discussion trough thoughts from an entrepreneur that started a venture through a crowdfunding campaign.
The basics of crowdfunding
Crowdfunding platforms occur over several sectors from non-profit purposes to consumer products to music and film production. Commonly, these platforms consist of three actors; the receiver seeking financing, the public financing platform and the individuals that provides with financial support. The crowd platform acts as a link between the project and the financers (Ordanini et al., 2011). Crowdfunding can take various forms such a donation, reward or pre-emption or capital model through equity or loans (Hemer, 2011). Belleflamme, Lambert and Schwienbacher (2007, s.7) defines the topic as ”Crowdfunding involves an open call, essentially through the Internet, for the provision of financial resources either in form of donations (without rewards) or in ex-change for some form of reward and/or voting rights in order to support initiatives for specific purposes". Belleflamme, Lambert and Schwienbacher (2011) indicates that there are three main reasons why people engage and support crowdfunding; following the process of a new product that never been launched, a pre-order of a certain product before it reaches the mass-market and identify themselves as privileged financers that partake in a community.
Brand your start-up
According to Rode and Vallaster (2005) studies of branding is a very unique phenomenon in the context of start-ups and claim that further researches in this area is necessary. This is further discussed by Bresciani and Eppler (2010), claim the field of branding on new ventures to be an under-explored area and its marketing strategies cannot be directly copied of established firms for success. For example, start-up branding distinguishes from established firms in terms of no rooted identity, spread reputation and lack of organizational structures (Bresciani & Eppler, 2010). Additionally, the limited resources such as capital, knowhow and time are also typical issues for new ventures.
Since the entrepreneur is responsible for many areas of the business, Barbu et al. (2009) findings were showing that the marketing strategies mainly surrounded sales. This research declared that the branding strategies were hard to overcome due to lack of managerial competence. Moreover, almost all start-ups are focusing on one product or service. In the context of small ventures, Resnick and Cheng (2011) claim the firm’s branding cannot be separated from the owner’s personal brand. As product and entrepreneur cannot be distinguished from the each other, the branding could be seen as one.
Social Media Branding
The web is a unique social environment with the ability to link a piece of content to another, which creates content webs that contain value (Akar & Topsu, 2013). Social media is applicable in various fields from customer management, market intelligence and research to public relations and promotions. Social media is today a vital tool for marketers from both small and large firms to spread their message to customers. An advantage of social media branding is the possibility to gain effective and relatively cheap customer insights such as feedback, attitudes and analyse customer movements (Barwise & Meehn, 2010).
From the consumers’ perspective, social media provides the ability to generate and share information about firms and products, influence buying behaviour and a vast effect on brand reputation. When a firm is present on social media communities, it’s possible for the customer to interact around the clock. From the firm’s perspective it is, according to Barwise & Meehan (2010), essential but hard to sacrifice control of the brand’s channel. Word-of-mouth regarding customer opinions are perceived to be more trustful in comparison to the firms marketing efforts (Akar & Topsu, 2013). Thus, social media has a great (positive or negative) impact on the firms sales and as claimed by Kietzmann et. al (2011), ultimately the impact on the firms continued existence. Moreover, Singh and Sonnenburg (2012) examine the essence of co-creation storytelling, which implies that the customer can actively affect the content and distribution of the message. This active participation forms a feeling of belonging to a community. The firms should consequently focus on generate connection among its followers, rather than promote its brand and commercials.
The Crowdfunder Discussion
Due to the time frame for this project I concluded that a convenience sampling would be most suitable. This sampling process is a non-probability sampling process that entails my accessibility to the respondent, thus I highlight the lack of generalizability (Bryman & Bell, 2011, p. 190).
An interview was held with an entrepreneur of a new consumer product that crowdfunded during ten weeks in 2013. The entrepreneur recalls the starting phase to take a long time, since the idea needed to be clearly conceptualized before the crowdfunding campaign. The campaign was the first representation of the product, “Since we’re aiming at the ‘ordinary people’ we wanted to see if the backers (people that found in an idea) liked it first” the entrepreneur said. When I ask about their branding strategies, my respondent is hesitating a bit before saying, “We got our concept, however crowdfunding will help supporters to create the brand and we will to some extent adapt accordingly”.
My interpretation after this discussion is supported by (Bresciani & Eppler, 2010) in the sense of lacking organizational structure and a rooted identity. The entrepreneur continues, “The invisible presence in social media before the crowdfunding launch was an active choice”. Social media accounts for the start-up was created just before the launch, “We wanted to come from nowhere and ride on the wave”.
The advantage of a crowdfunding campaign is the ability to get natural spread. “Our campaign becomes very intimate, since the viewers can grasp our passion about our project. If we did a more traditional commercial, it could be harder to portray or vision”. The entrepreneur is thinking in the same terms as Singh and Sonnenburg (2012) regarding the focus on the content story and not the brand itself. The entrepreneur continues with the importance of gaining trust and let the customers’ out from a passive role, “Our campaign is not an advertisement, or we can pass the “filter” being perceived as one because we simply ask for cooperation and engagement”.
Learning and conclusion
Crowdfunding has indeed redesigned the innovation sphere. Small venture should interact as a personal friendship during the brand building process, which is a strategy that is impossible apply by big firms. That would enable the entrepreneurs to not fear the loose of control, since the customers feel that the venture is theirs. Crowdfunding is a great tool for start-ups to get market validation at an early stage and engage personally through social media channels. Furthermore, I believe that crowdfunding opens up for the entrepreneur to faster form their brand identity. Additionally, crowdfunding has the possibility to build brands before the start-up is created, potential customers help with feedback, money and engagement to build the final product. Thus, the main drawback is the possibility of unique product to be copied. Social media has the ability to facilitate the creation of meaning and highlight the uniqueness of each brand only if start-up finds the formula to consumers’ heart. The challenge remains to target the individual consumer and at the same time please the collective mass. A crowdfunding campaign is made locally and convey a personal feeling, that can be spread and engage globally. To conclude, social media enable start-ups to build personal networks based on small communities around the brand and through crowdfunding the chance of spreading faster increases- This text demonstrate that social media presents the start-up firm the opportunity to tap into the enormous collective intelligence available on the web to build the brand further.
Akar, B, Topsu, (2013), “An examination of factors influencing consumers’ choice of social media marketing”, Journal of Internet Commerce, 10(1), 35-67.
Barbu, M.C., Ogarcă R. F. & Barbu M.C.R. (2009). Branding in small business. Management & Marketing. Vol. VIII. Special issue 1/2010, pp. S31-S38.
Barwise, P. and Meehan, S. (2010), “The one thing you must get right when building a brand”, Harvard Business Review, December.
Belleflamme, P., Lambert, T. & Schwienbacher, A. (2011). Crowdfunding: tapping the right crowd. Center for Operations Research and Econometrics, Discussion paper 2011/32.
Bresciani, S. & Eppler, M. J. (2010). Brand New Ventures? Insights On Start-Ups’ Branding Practices. Journal of Product & Brand Management. Vol.19, Issue. 5. pp. 356 – 366.
Bryman, Alan. & Bell, Emma. 2011. Business Research Methods Third Edition. Oxford, GB: Oxford University Press
CrowdCube, 2013. Vad är Crodwfunding. Available online:
http://blog.crowdcube.se/vad-ar-crowdfunding/ [Accessed 10 feb 2013]
Hemer, 2011. A snapshot of Crowdfunding. Available online: http://www.isi.fraunhofer.de/isi-media/docs/p/de/arbpap_unternehmen_region/ap_r2_2011.pdf [Accessed 10 feb 2013]
Kietzmann, J.H., K. Hermkens, I.P., McCarthy & B.S. Silvestreet (2011), “Social media? Get serious! Understanding the functional building blocks of social media”, Business Horizons, 54, 241—251.
Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011). Crowd-funding: transforming customers into investors through innovative service platforms. Journal of Service Management, 22(4), 443-470.
Singh, S. & S. Sonnenburg (2012), Brand Performances in Social Media”, Journal of Interactive Marketing 26, 189–197.
Rode, V., & Vallaster, C. (2005), “Corporate Branding for Start-ups: The Crucial Role of Entrepreneurs”, Corporate Reputation Review, 8 (2), pp. 121-135 Schmeisser w.,
Resnick, S., and Cheng, R., 2011. Marketing in SMEs : A proposed ‘4 Ps’ model. Academy of Marketing: Annual Conference, July 2011.
Winer, R.S. (2009), “New communications approaches in marketing: issues and research directions”, Journal of Interactive Marketing 23, 108-117.