The Finance and Marketing Diginomics foci led by Professor Maik Eisenbeiß and Professor Lars Hornuf have together with Sven Hartmann from the Institute for Labour Law and Industrial Relations in the European Union written a new paper on social media marketing and equity crowdfunding. They find that effective signals via informative posts are relatively rare in social media but trigger the number of investments in an equity crowdfunding campaign. Particularly effective informational posts are those that provide either information about campaign development or external certifications. Moreover, persuasive posts are more common although they are only effective if they also directly promote the crowdfunding campaign through investment advertising. Other manifestations such as product advertising or follower communication remain ineffective. Finally, investment advertising works particularly well in social media marketing once it includes a statement about the campaign’s previous investment success signaling the crowd that they are not investing alone. Thus start-ups can effectively promote the number of investments and investment amounts though social media.
The full article can be accessed here.