Sane wrote:I can only add that it is a total ripoff to ask for an upfront fee of such amount. Let alone the percentage due to be paid if campaign is success.
If you're good with what you do and you're in the business of hepling people turn dreams into reality, let your work speak for you. There is no free lunch in this world but 30% equals a shot to the head in regards to project development.
I can understand why some would think this, and I addressed this subject in another thread, but I'll repeat it here.
Some creators can more-easily afford to pay 30% (or 35%), for whatever reason, and would prefer to invest those profits in increasing their backers, either through their own marketing or by hiring a professional crowdfunding marketing agency. And 35%, although it may seem high to some people at first thought, is actually a reasonable standard cut for people who are experienced in crowdfunding marketing. An average Facebook ad gets perhaps a 2-3% click-through rate, and a typical Kickstarter page may get a 1-2% conversion rate, with lower conversion rates for higher average pledge sizes (and vice versa). And, with those statistics in mind, let's consider a hypothetical example...
Let's suppose that you hire a skilled marketer to advertise your campaign on Facebook. This marketer then spends $100 to show a Facebook ad to 10,000 people, of whom 5% (500) visit your campaign page, of whom 1% (5) back your project by pledging an average of $60 each, which gives you a total of $300, for which which for which you then pay your hired marketer a 35% cut, which is $105. This means that he's spent $100 to get $105, which is a $5 net profit. Which is rather lousy---but those rates aren't unusual for crowdfunding marketing. Doubling the click-through rate of the ads (or the conversion rate of the page) could turn that $5 net profit into a $110 net profit, but that's not necessarily easy to do. The fact is that, even at a 35% cut, many Facebook ads are not going to be profitable---and, if you reduced that cut to more like 10-15%, then it would be almost impossible to ever make a profit from crowdfunding advertising (and, as a result, you probably wouldn't remain in business for long). So, that's why 35% is a decent standard---at that rate, if you're skilled enough, then you can maybe find a way to advertise profitably for half or more of the clients who hire you, which is always a lot better than succeeding with nearly none of them.
Even for the clients that you can help, though, you're probably still going to need to test a lot of ads in order to zero-in on a few sets that will actually work. And the only way to figure out if they're going to be profitable or not is to spend enough money on testing each one. Even in this example above, spending $100 probably isn't going to be enough to know if these ads are going to be profitable or not---with only 5 pledges, and such borderline profitability, there's still too much statistical uncertainty to rely on those rates, and so you're probably going to need to test a while longer to be confident that those ads will be profitable. And, even if they prove to be profitable for now, there's also the question of how long they will remain so---all Facebook ads will slowly lose their profitability over time, and so it might not be long before your marketing expert can't earn even $5 for every $100 that he spends and will need to turn those ads off. And, so far, we've only examined the cost of showing ads, not the cost of skilled labor for creating and analyzing those ads, or perhaps the cost of maintaining some profit margins of your own. And all of that costs money, as well. So, if you're a marketer who intends to do a sufficiently-thorough job of testing a new campaign to see if it's going to be profitable to advertise or not, then you could easily spend thousands of dollars before you're done. Which SOMEONE needs to pay for---either marketers or their clients. And it can potentially be rather expensive for marketers to pay this bill themselves if perhaps half their clients don't work out. So, that's why charging a few thousand for testing isn't necessarily unreasonable, either.
In any case, those are just a few points to consider, for whatever they may be worth. Yes, I once thought that 35% sounded like a LOT, myself, but that was before I gained so much experience dealing with crowdfunding marketing. Perhaps ongoing improvements in information technology will eventually allow marketers to advertise so effectively that they can obtain far more clicks for far less money---but that day has not yet come and so, for now, a few thousand dollars for initial testing plus a 35% cut thereafter is a relatively-sensible standard price to ask.
