FiredUpX wrote:Typically if you are to use a PR firm for your crowd funding campaign what is an acceptable percentage of total raised they should charge. I have heard that Funded Today charges 35%??? That's insane.
Funded Today usually charges 35%, yes, for marketing---which includes PR, affiliate-marketing, cross-promotions, and especially social-media advertisements. Even at a 35% cut, though, most attempts at social-media advertisements fail to prove profitable. At that percentage, if you're good enough, then you might fail to find any profitable ads whatsoever for about half your clients, and find at least a few (or perhaps even many) profitable ad sets for the rest. The lower the percentage, the harder it gets to avoid losing money on advertising---at 10-15%, you're practically dooming yourself to failure. Or, at least, that's been the experience of my co-workers.
As a hypothetical example (which I've already shared elsewhere on this forum) using some relatively-realistic rates, let's say that you spend $100 to show a Facebook ad to 10,000 people, that 5% (500) of those ad-viewers (which is a bit above-average) visit your client's campaign page, and that 1% (5) of those page-visitors (which is a bit below-average) back your client's project by pledging an average of $60 each, for which which your client pays you a 35% cut. This means that you've lost $100 in order to gain $105. And this example assumes that you've collected enough data to be able to rely upon the accuracy of those rates, which isn't necessarily true, especially with only 5 backers---and, even if those rates are trustworthy, then they will invariably slowly decline over time until you can't earn anything anymore or, worse yet, even start to suffer a loss. So, Facebook ads are tricky, and it's not unusual to spend hundreds of dollars (in addition to the cost of skilled labor) finding a few ad sets that will work, if any can be found at all.
On the bright side, though, when ads work well, they work VERY well. They're one of the best forms of marketing to bring people to your campaign---far better than PR. PR is very powerful, but its fruits tend to be less immediate and direct, so it's not nearly as effective for short-term crowdfunding campaigns as for established companies. But ads can (potentially) bring a nice steady flow of pledges to your campaign page, which can be gradually scaled-up to the end, ideally losing their profitability on your final day. And that can be very helpful when your first-day pledge-spike tapers off. It tends to increase "organic" traffic/pledges also, sometimes a LOT. And many creators would prefer having those extra backers to having profit margins. And many can afford to lose 35%. So, spending 35% to turn profits into backers can sometimes be a great deal. If ads work at all.
And I mention that last part again because it's always a gamble. Ads might work for a campaign or they might not, and that requires testing to determine for sure. Usually, when campaigns are doing well on their own, they do even better with ads, but I've seen exceptions on both ends of that spectrum---so, you never know for sure until you try. I've seen some campaigns languish in relative obscurity until advertisements not only helped them to revive their campaign but far surpass their goal. I've seen other campaigns making six figures that (amazingly) didn't respond well to ads at all. But, again, those are the exceptions more than the rule.
In my experience, marketing isn't as important to the success of a campaign as presentation. And neither marketing nor presentation are as important as the product/service itself. If you've got a figurative Edsel, then you can build the finest well-staffed showroom for it that money can buy, and hire the best marketing gurus in the business to invite the right demographics to come visit it---but it's still ultimately going to fail. If you've got a figurative Mustang, then it's going to sell on its own, but a good presentation coupled with good promotion are only going to help.
In any case, just a few thoughts about crowdfunding marketing, for whatever they may be worth.