The paper poses an interesting research question that how much success of a Kickstarter campaign depends on the campaign’s presentations, pitch and other factors which have no relation to the product itself. It is interesting because unlike other kind of media like advertisements, direct impact of such influences can be measured in terms of donation to the Kickstarter projects.
Tanushree Mitra et al. list out a number of factors which influence the viewers, positively or negatively. These factors, or control variables, are : project goal, its duration, video or animation used for the pitch, category of the product, Facebook connectivity etc. Impact of a video or an animation is well understood as they provide the information in a short amount of time and keep the viewers engaged compared to a large block of text. Project duration also plays a key factor. I can understand why longer project duration is seen negatively and such projects are less likely to reach their funding goal. The viewers have little interest or trust over paying for a product whose result they may see after a long duration. Products which take longer to develop are tell-tale signs of complexity and can lead to disastrous failures. Such trust deficit can only be offset by strong brands which usually Kickstarters don’t have.
Tanushree Mitra et al. built a logistic regression model for prediciting the success of kickstarter campaigns with these control variables. It resulted in 17.03 % error rate in 10-cross validation.
The authors factors in the phrases of language used in the Kickstarter campaign and the error rate reduces to 2.24 % which shows a strong correlation between language of the pitch and the success of the product. They try to explain the phrases as a trigger for one of these phenomena – Reciprocity, Scarcity, Social Proof, Social Identity, Liking and Authority.
Many of these phenomenon like scarcity, social proof and identity as well as authority are well studied psychological phenomenon, especially in the retail and entertainment industries which employ all kind of techniques – from loyalty bonuses, exclusive cards to ad campaigns which instill a FOMO (Fear of Missing Out) among the users [1]. Every other advertisement has an “expert” who claims that the given product/service is the best. Tanushree Mitra et al. reference these as part of Theory of Persuasion. Since, these are older tricks in the classroom marketing and advertisement books, it is debatable that how much effective they are in the kickstarter campaigns. Correlation does not imply causation.
Reciprocity, on the other hand, stands out as an effective technique. Kickstarter campaign, by their nature, do not give anything in return to the backers except for the promise that the product will come out for the consumers. If the Kickstarter campaign gives back something tangible to the backers, it is a very visible addon for them.
The paper shows that adding phrases and control variables to their model, they achieve high degree of accuracy in predicting success of a campaign. If platforms emerge for Kickstarters to tune their pitches based on these suggestions, will their effect subside from overuse ?
This study was performed in 2014, more than 3 years ago. Kickstarter now is a very different and diverse platform with newer options, long list of high profile success and failures (Pebble has been acquired after a string of losses, Ubuntu phone was a failed campaign, Oculus is a major player in VR etc). Product discovery portals like Product Hunt are also influencing popularity of the campaigns. Do these conclusions hold up for Kickstarter of 2017 ?
Reference :
1) https://www.salesforce.com/blog/2016/10/customer-loyalty-program-examples-tips.html