Affiliate Marketing and Crowd Funding.

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Over the past couple of years a number of Crowd Funding sites have launched affiliate programs for their platforms, most of them have focused on using affiliate partners to bring in new projects to their networks. On the whole, from what I have seen, this has not worked out. This is primarily due to one core fact that these sites have missed. Affiliates want to be paid for the marketing they do, notmaybe paid. The majority of crowd funding sites are running affiliate programs on the basis of “referring a new project” and then paying the affiliate “if” that project gets funded, and that’s after the “if” it gets accepted in the first place.

That’s a lot of “ifs” for any affiliate to consider when decided where they want to focus their time and effort.

Consider also that many  crowd funding sites work on a “fully funded” basis, which means that unless a project gets all the backing it is aiming to raise, then no funds are handed over, and the affiliate partners will earn nothing even on the backers they brought in for a project! Not the most enticing structure!

So in order for a Crowd Funding site to have a really attractive structure it really needs to be looking at a lead based payout for new projects and offering project owners the option of “fully flexible” when it comes to the structure of their fund raising (Fully Flexible means all funds collected are paid to the project owner, and so affiliate partners will get paid too).

Another concern is the commission structure on the funds raised. I’ve seen numbers thrown around of “50%”…well 50% of the platform’s fee, which is 4% so in fact 2%…which sounds great when you talk about bringing in backers that fund projects for thousands of dollars. The reality though is that most backers don’t fund for thousands, they fund for fifty dollars, or ten or a hundred and the occasional backers at five hundred, but only the very rare few go above that unless a project is a stunner with amazing benefits to the backers. 2% on that fifty dollar pledge is going to need a lot of pledges to recover the time and effort spent promoting a project.

The only way to really offer more is if the project owners themselves are the ones deciding how much money to pay affiliate partners and if that money comes from the funds pledged. Then they can be offering potentially as much as they like, but knowing that whatever they pay out, means more funds that they need to raise!

Some might question whether that is ethical. Is it right that a project owner is spending the funds that are pledged to pay affiliates? However as any successful project owner will tell you, success isn’t free and projects require marketing on multiple fronts if they are to succeed. Paid ads, seo, social marketing, PR, news articles, paid “reviews” on crowd funding focused sites. Launching a Crowd Funding project with the idea that it will work without any marketing is a rather weak business plan, unless your brand is big enough to grab the headlines by itself. Sites are filled with unfunded projects that ignored that fact that you need to invest in marketing to raise funds.

Looking around at Crowd Funding sites that do support affiliate marketing you have a few choices;

Commission on Projects Referred;

Commission on Backer Funds;

  • Gogetfunding.com – 2% of funds Pledged from your referrals
  • Patronomy - Varying % on funds Pledged (around 7-10%) from your referrals

So presently only two platforms offer commission on funds pledged by referred backers, and in our opinion, really only one platform offers any serious chance for an affiliate to generate any form of revenue. While Patronomy and GoGetfunding offer commission on funds, Patronomy offers flexible funding options for project owners which will mean affiliates get their commission even if a project does not reach its final goal. That said Patronomy is brand new to the market and needs to prove itself by building a track record that affiliates can trust in. One other key area that Patronomy presently stands apart is with its’ “one project” focus.

There are potentially more options around and I foresee more platforms looking at how they can integrate affiliate marketing into the way the raise funds, take a look around at the platforms and see what’s on offer, it’s a growing business niche that experienced affiliates can certainly do well in.

One thought on “Affiliate Marketing and Crowd Funding.

  1. Pingback: Affiliate Marketing and Crowd Funding. | Affiliate Bit

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