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Hello, Inigo
Let me start from ‘simplified’ approach to project marketing budget. One spend 15-30% of the goal sum to run project successfully.
Before I go into details consider one-line strategy for crowdfunding projects. ‘Aim to get funded during 48 hours’. Project`s traction makes you visible on the platform and brings free traffic.
Below you will find reference projects, financial modelling and channels/content sections. I put it together to build the context of the project though this is preliminary ‘no-input’ considerations. Every stage has fine tuning options and tricks we need to discuss once we go further.
Reference projects
I didn`t dig deep. I suppose that working project must be provided with at least 20 relevant projects. I suppose IndieGoGo must be included in research too. Good news is that the product looks unique after research there are no mass of similar products on the platform. Question is about the size of the market.
Anyway you can take away some learning studying these projects. They will look banal at the moment but...
Do your homework before the start
Scale the traction once you go
Link column is clickable. You will arrive to the project page.
Platform
Link
Goal
Pledged
Backers
Status
Median contribution
There are no rows in this table
The closest project in terms of product concept is The magazine wall hanger. But I suppose it wasn't pitched right and looks like project wasn't prepared.
Very rough financial modelling
I break down project into stages here.
Pre-launch is about gathering the subscribers list. This is basically test that gives us precise idea about email acquisition cost, email opening ratings and future subscriber to backer conversion rates. We have to check COGS, check funding goal and platform prices.
Launch is about engaging your email list to back you and drive new people to the project page. The goal here is to make ‘all the money we could’.
Post-launch is about getting backer`s information for future fulfillment and delivery.
Pre-order is about generating preorders while you manufacture the first batch. It overlaps with post-launch in time and is optional. It`s an opportunity to reinvest overfunding into ads to expand the community and pre-orders.
I put ballpark numbers in the sections below for you to get the context. We can play with other tools to reduce the ads budget but pure ‘ads leads’ budgeting is the good start to sort another options.
Budgeting during the project goes like this. We align on strategy. I build estimate budget for the whole project and precise budget for the ongoing stage. Once we close the stage we get new information and I update estimation for the next stage.
Pre-launch
Pre-launch is about building community of future backers. There could be different strategies. I describe here the most straightforward way at the moment. You can predict and control the results with this approach. Let`s assume that we use only ads to get leads.
This is a calculator for you to ‘play with numbers’. In input section you put variables in the model. In output you see scenario output.
Input
Input variable
Description
Put number here
1
Median contribution
Basically this is the selling price
400
2
Campaign goal
Total sum to be raised.
30000
3
Subscriber to backer conversion rate
Subscriber here means the e-mail list subscriber. This benchmark varies depending on the project idea, audience and price but falls somewhere 0,5%-4%.
0.02
4
Advertising acqusition cost per one subscriber
This benchmark varies depending on the vertical and tier but revolves around 2$/subscriber
2
5
% of funding goal to raise during 48 hours
This is the sum that helps algorithm to put project in trends and/or front page. More traction we get during first two days more free traffic project gains.
0.5
There are no rows in this table
Output
To raise % during 48 hours : $
50
15000
Email list subscribers needed :
1875
Pre-launch advertising spend: $
3750
Inigo, we didn't discuss the actual set up behind the campaign. Median contribution and campaign goal in the table are out of the blue now. Feel free to play around it to see possible costs.
Please keep in mind that these are benchmarks. I'm sure we will reduce cost per subscriber. These figures are to understand the frame of reference. We can down the funding goal and use ads as sales driver during campaign.
We need to discuss it in details if we go for the project. Launch
The main investment on this stage is ads.
Depending on the platform one uses different setup.
Post launch
There is not much investments here but mind
These spendings should be included into the price and funding goal. To be sure about the budget you'd better have product and campaign BOM (bill of material)
Pre-order (InDemand)
You`ll learn a lot about your audience during campaign. You`ll have list of the backers and proved optimized creatives for the ads. You can control profit on this stage.
Your tool here is ads+IGG letters.
You can model investments on return of ads as IGG allows to connect fb pixel to the page.
Channels and content assets
Minimum required channels set
We can expand this list to social media, influencers and press outreach, but it`s not about required but sufficient list.
Minimum required content assets set
Next steps
You consider my presentation and decide if it matches with your vision.
We discuss strategy, scope of work and my role (I can do selected tasks like product concept and positioning, manage whole campaign or consult/manage selected tasks).
Financial options of collaboration depends on the input you need from my side.
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