What Effect have Crowdsourcing Sites such as Kickstarter had on Traditional PR?

Written by Lawrence Watts (intern at Stone Junction)

In today’s blog post we’re going to be looking at the latest internet phenomenon that, until recently, has been working under the radar to slowly change the way we do business. It’s still doing so, only now it’s doing it very fast and in full view.

Kickstarter is a direct investment site that has taken the internet by storm in the last few months. For those unfamiliar, the idea behind Kickstarter is remarkably simple. Companies create a free page where they pitch a product or business and set a funding goal with a time limit and various pledge tiers. Individuals can then pledge set amounts of money for varying levels of reward. For example, a $5 pledge might get you a thank-you email, $10 may get you an email and a copy of the book, film or video game the company you are investing in is making. This can continue all the way up to $10,000 pledges that get you a meeting with the team behind whatever book/film/video game you’re supporting.

In effect, it’s a business angel network website where the return on your investment is in the form of a product rather than equity in the company or convertible debt. If the goal is reached then Kickstarter hands the money over to the business, taking a cut for itself, and production begins. The site is great from the company’s point of view as there is also the facility for a project to be over-funded, giving successful propositions extra funding to improve the final product.

This is all great news for creators and investors, but where does it leave PR? Well, potentially in the same place we’ve always been. Once funding has been reached the company will still need both PR in order to continue selling the product. The difference is that in these cases there is also an established consumer base that must be catered to that have already payed for the product.

We predict (though don’t quote us on this) that the main effect this will have on PR is downsizing. Most of the appeals on Kickstarter are from small, startup, independent companies that don’t have the funds to hire large PR firms and would rather work with a few individuals. In these situations building a close working relationship with a client is immensely important and small PR firms have a much easier time doing so anyway.

There is a trend, however, for companies that have crowd-sourced their funding to also crowd-fund their PR. In this post (http://wasteland.inxile-entertainment.com/blog/2012/04/07/update-10/) inXile studios tell their fans that “all 41,000+ of you are our marketing and PR team” for their Kickstarter-funded video-game Wasteland 2. It’s possible that in removing the need for creators to find publishers or investors, Kickstarter has also removed the need for traditional B2C PR firms. I personally I hope it hasn’t, despite Stone Junction being firmly ensconced in the B2B world. As much as I love video games I’m also pretty fond of there being PR agencies for me to intern at.

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Richard Stone - Stone Junction

Stone Junction is a cool technical PR agency based in Stafford. We work for all sorts of businesses, with a particular focus on technology, technical and engineering companies. We like being sent cake and biscuits by clients, journalists and prospects.

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