Why paid ads are a must in your equity crowdfunding campaign

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Why paid ads are a must in your equity crowdfunding campaign

Networking and word-of-mouth can only go so far. On top of expanding your reach organically using social media and email, you’ll need to consider paid ads when marketing your equity crowdfunding campaign.

Facebook, LinkedIn and Google all have one thing in common: they offer PPC (Pay Per Click) advertising. These are the ads that appear in the margins of your screen when you’re visiting a website, above your search results on Google, or in your news feed when you’re scrolling through Facebook or Instagram. These ads can be tailored to things your target customers have liked, searched for or discussed online.

Pricing for PPC ads is fully automated, meaning even if your budget is small, you can still reach people your investment offer is relevant to. You also only pay when a user clicks on your ad.

Using Facebook Ads in your crowdfunding campaign

Facebook will usually be the first port of call for any equity crowdfunding campaign.

As a social, accessible platform, it goes hand in hand with crowdfunding. Paid ads here can be combined with brand-building activity in Facebook communities, and your organic friends and family network, which you can use as a starting point for spreading the word.

The biggest advantage of Facebook advertising is its customisability. Facebook’s abundant data enables an intelligent approach, allowing you to target specific demographics, interests, and habits.

Finding out who your target audience actually is though, will require some research. Fortunately, there are tons of strategies out there to help you optimise your target audience research. An important data point you will want to consider is your audience’s interests: What other pages do they like? What other businesses do they interact with?

Say you’re offering equity in your craft brewery. A good potential investor might be someone who has shown interest in craft beer - they might like pages like GABS Festival -  and has also shown interest in investment - by visiting the ASX website, for example. You can set these specific criteria within Facebook Ads Manager.

Despite it being far from the hottest new social media platform (it turned 17 this year. Feel old yet?), Facebook still has 2.74 billion active users. Its user base is more mature than many other social platforms, arguably with more disposable income to invest.

Tips for implementing Facebook ads

Optimise for mobile: 79.9% of Facebook users access it exclusively via the mobile app, so ad design for mobile should be prioritised over design for desktop.

Create a hybrid strategy: Don’t just rely on your ads to drive engagement - you’ll want to be making regular organic posts and stories alongside your campaign to bolster your strategy. Paid and organic social strategies work best when deployed together. There are plenty of guides online about the ‘best’ times to post on social media, but there will be some variations depending on your industry and audience. Understand their habits, and create a schedule for optimal posting times.

Play around with ad placement: Facebook Ads Manager offers different locations for your ads. Pay attention to where they’re appearing, and which ones are being responded to the most. If your audience is scrollers, you’ll want the ads in their newsfeeds. If they’re less habitual users or consume a lot of video content, you might want to make sure they’re appearing ‘in-stream’ (in videos).

Go video or go home:  Facebook users love video. 15% of all Facebook content is video, a figure that has been steadily increasing since 2014. More than 1.25 billion people visit Facebook Watch every month. Video is a multi-sensory medium that can make quick work of engaging investors. It’s a powerful way to funnel them through to further investigation.

Before committing, investors will need to read your landing page, research your company, and get through your lengthy offer document. If they’ve been drawn in by your video, they’re much more likely to commit their time to doing this.

You should already have your video pitch ready when you reach this point of the campaign, and if you followed our recommendations, you should also have extra recorded material that can be deployed throughout the raising campaign.

Remember, your video is the first thing prospective investors will watch. In this arena, polish and professionalism are sacrosanct.

Using LinkedIn Ads in your crowdfunding campaign

Both Facebook and LinkedIn have well-established credentials for investor engagement. But the effectiveness of each platform will ultimately depend on where your audience prefers to hang out.

While Facebook’s targeting is based on demographics and interests, LinkedIn focuses on more professional targeting, such as job titles, groups, industry, skills and/or the company of employment (current or past).

LinkedIn also allows you to combine different targeting options to reach a quality audience. You can combine the ‘Job Function’ option with the ‘Seniority’ option to reach professionals that are likely to have more affinity with your product/service AND are more likely to invest higher amounts.

For example, if you’re raising capital for a medtech company, you can target doctors or medical professionals more advanced in their careers, who will likely have more disposable income to invest.

LinkedIn members are known for being more influential and have twice the buying power of the average web crowd. That’s good news for any company raising capital.

But it’s important to keep in mind that certain privileges come with a price. While your LinkedIn advertising costs will depend on several factors, the average cost per click is exponentially higher than Facebook’s.

In terms of ad formats, there are several to choose from: sponsored content, message ads, text ads, dynamic ads. The right format will again depend on your audience’s preferences.

Tips for implementing LinkedIn ads

LinkedIn recommends starting with an audience size of over 50,000 members, especially for a new campaign. For message ads, aim for more than 15,000 members.

Keep content short and direct: Attention spans are short on social media. Your LinkedIn Ad copy needs to capture the user’s attention and convey essential information - read value proposition.

Stats are important: LinkedIn A/B tested an update both with a statistic and without one to measure the performance differences. The difference was quite significant. The update with a statistic had a 37% higher CTR and 162% more impressions.

Choose authentic, people-centric images for your creatives: It shouldn’t be a surprise that content featuring real people tends to perform better on a social networking platform. After all, most members are there to make connections. According to LinkedIn, ads with people in them can increase your CTR by as high as 160%.

Using Google in your crowdfunding campaign

As the most-used destination on the web, Google is synonymous with paid advertising.

The Google Keyword Planner, Google Analytics, and Google Ads can (and should) all be used in conjunction to understand, analyse, and target your ideal investors. Google also provides Brand Lift, which helps you measure how your audience is responding to video content.  

When it comes to crowdfunding, however, we’ve found that the platform is not as effective as social media channels to get the word out.

Unlike social media giants Facebook and LinkedIn, Google Search ads focus on the targeting of keywords and the use of text-based ads. Using Google Ads, you’ll bid on keywords which are specific words and phrases actively searched by Google users.

Experience tells us it is unlikely that potential investors will be actively searching for ‘startup investment opportunities’ on Google. Those investors are usually reached in a more passive and organic way through other platforms.

You can still use Google to drive engagement though. Google Display ads allow you to retarget warm leads by showing image or video ads to those already interested or engaged. More on that shortly.

Using other PPC avenues in your crowdfunding campaign

Dianomi

If you consume news on websites like the Sydney Morning Herald, The Age or Smart Company, you’ve probably seen a Dianomi ad.

Dianomi is an ad platform that helps financial services, tech and corporate sectors reach their audiences with targeted content that’s highly relevant to them.

Their technology integrates native advertising messages alongside relevant editorial on premium financial websites. Dianomi is a great platform to target an affluent, investor-skewed demographic. See their recommended net cost per click (CPC) by market here.

Outbrain/Taboola

Outbrain and Taboola offer similar services to Dianomi. But unlike Dianomi, they aren’t skewed totally towards an investor class. They also work with more niche sites, including sports, entertainment, health, and technology, which allow you to target potential investors with a vested interest in your product or service.

Outbrain’s Smartads are built to match the look and feel of premium publisher pages such as BBC, CNN and The Guardian.

Taboola uses a similar strategy and can get your ads on premium publishers like News.com.au, Business Insider and 7 News.

Instagram

Because Instagram is owned by Facebook, Instagram Ads can be created and managed simultaneously with your Facebook ad campaign. But just because you can, doesn’t mean you should.

Many companies are finding success in using Instagram as a financial education platform, but think carefully about whether Instagram is right for your campaign. Do the demographics suit your offering? Are they familiar with crowdfunding in general?

Equity crowdfunding campaigns that generate the most engagement on Instagram are those that are more consumer-focused and relatable – think healthy and beauty, food and beverage or any business with a core B2C focus. If this sounds like you, consider directing a portion of your budget towards Instagram.

YouTube

Advertising on YouTube is a great way to get your video ads out in front of a relevant audience and potential customers. Like on most social media platforms, people aren’t actively searching for a certain product or service, but you can still serve them videos based on their previous searches and browsing behaviour.

YouTube Ads tend to be much more affordable than Google Ads, with CPV (cost per view) averaging between $0.10 and $0.30, depending on your audience.

You’ll just need to think about the time and money invested in creating a video ad (as opposed to a static/image/text-based ad). At this point, you should have your video pitch for the campaign ready anyway, which you can repurpose.

Either way, YouTube has emerged as the go-to for self-sourced financial education. It’s a powerful tool that has delivered huge success to companies like the Missouri Star Quilt Co - not just in educating their customer base and potential investors, but in growing an authentic community around their brand.

Retargeting

97% of people who visit your site for the first time don’t buy anything. It’s also a basic marketing principle that it takes seven "touches" before someone will internalise and/or act upon your call to action. Luckily, a lot of the platforms mentioned in this article can help you to bring them back with something called retargeting.

Retargeting campaigns give your website and social media visitors a nudge if they’ve visited your website or socials but left without converting. Retargeting campaigns can be run through Facebook Ads, Google Ads, LinkedIn Ads and Youtube Ads. Each platform will have its own retargeting methodology.

If you’re wanting to retarget users who have visited your STAX campaign page directly, we enable you to add your Facebook Pixel or LinkedIn Insight Tag.

Frequency & Audience Size

Frequency planning is vital for optimising your campaign’s impact. This research by Facebook Marketing Science showed that lift for ad recall and purchase intent both increased with the frequency of exposure. In theory, the more you post, the more engagement you’ll be able to drive.

But things get a little more complex when you add the size of your audience to the equation.

The smaller your audience, the higher your frequency rates are likely to be, which could result in ‘ad fatigue’ - when someone keeps seeing the same ads from the same advertiser.

Let’s be honest, if someone hasn’t expressed interest or invested by the 5th time they see your ad, they’re unlikely to do so.

By keeping an eye on your campaign metrics, you will be able to determine at which frequency rate engagement drops off. From experience, this is usually around the 3-4 mark (the third or fourth time someone has seen your ad).

In recent years, advances in artificial intelligence have made broad audience targeting more effective. Facebook’s delivery system can now do the heavy lifting for you and find you potential investors you wouldn’t know existed. This means you can set a broader audience from the outset and avoid running into dreaded ad fatigue too quickly. Multiple creatives or versions of your ad will also help offset this.

There are heated debates on whether you should use specific or broad targeting when creating your target audience. Neither approach is inherently superior to the other and the best will depend on your target audience.

Lookalike Audiences

Lookalike Audiences are a way to reach new people who are likely to be interested in your business because they're similar to your best existing customers.

Facebook Ads, LinkedIn Campaign Manager and Google Ads all allow you to upload a list of customer data from your database or CRM.

These platforms then use machine learning to identify other people who share similar attributes to your existing customers (age, location, likes, search behaviour). You can then target them with tailored advertising.

This method is proven in traditional advertising, but you need to ask if your customers (and those similar to them) are your best potential investors. After all, there’s a big difference in pitching to clients vs. investors.

So what’s the perfect strategy?

Choosing the right marketing and advertising channels is no easy task for your equity crowdfunding campaign. When you raise with STAX, we offer additional marketing services and access to a network of digital agencies and consultants to help you get the best bang for your buck.

To speak to us about helping you get your campaign off the ground, chat with us here, or read our CSF success stories here.

James Brannan

Director of Operations at STAX

Sam Henderson

Director of Marketing at STAX

Natalia Forato

Social Media Manager at STAX

All views, investment or financial opinions expressed are those of the author and do not necessarily reflect the official policy or position of STAX. The information contained in this post is not investment advice or a recommendation to buy or sell any specific security.
Understand the Risks

Under crowdfunding legislation in Australia, STAX is what’s known as a ‘gate keeper’. That means we’re obliged to check certain company details on your behalf. Read more about how we select companies here.

Like anything in life though, investing on STAX comes with risks. While we carefully screen every company, we can’t actually guarantee their success. Nor do we give any investment advice or take responsibility for losses. We’ve covered the general risks here.

Information is currency.
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