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Streaming the Fundraising Process for Start–ups


St. №: 46031

Subject: Economics and Business Administration Academic Advisor: Inger Jensen, Professor Emerita Submitted: May 2013 Number of Standard Pages: 60 The research–based document is presented as a final empirical study of a university student towards an academic master degree in social science. The master thesis supports the candidature to professional qualification and pertains to the personal and professional interests of the master student.


Ivelina DIMITROVA is a master student at Roskilde University, Denmark with major in Economics and Business Administration. Ivelina is interested in social media marketing, and has practical experience in the area as author of the web site ‘About Marketing’ – an informational web site designed to provide interactive learning environment to young marketing professionals.


I am heartily thankful to my supervisor, Inger Jensen, who guides and supports me throughout the whole process of writing the master thesis.

I am also grateful to my family and friends who supported me in any respect during the completion of the project.

ii ABSTRACT Social media has become the preferred communications channel and it has significantly changed the way businesses communicate with customers. Though easy to implement, social media marketing might be quite challenging for those who want to approach and engage online users in their business practices. Start–up companies are found to encounter much more difficulties then big well–known companies in reaching out and inducing people to support their marketing campaigns. Marketing through Influencers and Word–Of–Mouth are seen as a possible solution to that problem. The purpose of the present research is to explore influencers and their word–of–mouth messages that increased market awareness of a start–up company amongst its target markets.

The research includes the use of qualitative content analysis in a case study about Logic Artists – a start–up role–playing game company – that has managed to raise the awareness of its fund–raising campaign among its target audience. The method of research encompasses a three–item matrix of recognizing social media influencers who create a word–of–mouth content. The analysis reflects the composition of the word–of–mouth messages that brings knowledge and turns people’s concerns into action.

The research findings demonstrate that start–up companies has managed to enable social media influencers to increase the effectiveness of the word–of–mouth marketing campaign through the establishment of open, personal and meaningful contact with the audience. The concern for others and the mutual trust make influencers support the process of word–of– mouth. The results, however, cannot be automatically extended to a variety of other scenarios in which a company pursues different marketing objectives. The functions that the source and the content of the word–of–mouth message have might bring a variety of potential applications and can serve as a framework for further empirical research in the area.

Key words: Social Media, Marketing, Influencers, Word-Of-Mouth, Message, Content iii Contents CHAPTER ONE: INTRODUCTION

Problem Area

Problem Formulation



Marketing a Start–Up through the Social Media

The Social User

Social Media Influencers

Types of Influencers

Marketing through Influencers

Word–of–Mouth Marketing

Levels of Word–of–Mouth

Engaging in Word–of–Mouth Process

Delivering a Word–of–Mouth Message

Word–of–Mouth Content


Method in Deriving Social Knowledge

Research Method

The study questions:


Unit of Analysis:

The Logic Linking the Data to the Propositions:

Criteria for Interpreting the Findings:

Data Collection

Data Analysis


Logic Artists

The Computer RPG Market

Logic Artists on Kickstarter

The Logic Artists Promotional Campaign

Logic Artists and Social Media Influencers

The Influencers’s Word–of–Mouth Message


–  –  –

Problem Area Conducting online marketing might be a challenge for a company since online users tend to shun companies marketing messages (Godin, 2010). It is especially hard for start-up companies to provide awareness among online communities since online users rarely consider a message that is coming from unknown and untrusted source of information (Lee and Ma, 2012; Karjaluoto and Salo, 2007). Instead people trust and seek the opinion of independent parties such as industry experts, journalists, bloggers, friends and family members. All those people are found to influence online users with the trust and credibility of their expert opinion (Roberts, 2009).

Therefore, to conduct a successful online campaign, a start–up company should look for its influencers and engage them in supporting its marketing objectives (Brown, 2008). To reach out influencer and to make them willing to collaborate however might be another challenge (Evens, 2010). Influencers do not want to be pushed, forced or influenced. Pushing traditional methods on them is awkward and might only serve to alienate them from the company. Influencers care about their independence because it makes them trusted in providing unbiased useful information to their readers (Brown and Hayes, 2008). Making influencers working for a company is difficult and it takes time – in making them interested in the company’s offer(s) and to pass it on (Subramani, 2003).

Logic Artists is an example for a start–up company that has gone beyond the aforementioned obstacles. The company was founded by four international students from IT University at Copenhagen that have united around the idea of developing a story–driven tactical roleplaying game for PC and Mac. The game looked promising and quickly got the support of a private investor willing to finance the first stage of the game project. The rest of the money however Logic Artists was forced to find from somewhere else. The company applied for government grants but since the game project was found to be risky – based on old, long–forgotten book games that might be no longer interesting to people – the company request was not approved. The lack of investments and the uncertainty of the project’s success made Logic Artists start looking on the new business as on unrewarded endeavour. The company founders, however, gave themselves a second chance and published their project on “Kickstarter” – an online platform that helps star–up companies to receive non–repayable funds together with people’s project pre–approval vote.

Logic Artists managed to raise more than 70 000 dollars within a month as the success of its fund–raising campaign came from the support of 1 569 online users. The company used social media to channel its message and raise the awareness about its product and fund– raising campaign among the online users. Logic Artists relied on word–of–mouth as an unpaid form of promotion to make people know and talk about its initiative. The company did not rely on convincing people to support its project – the project has been good enough to speak for itself – instead the company tried to reach its target audience and make it informed about its product and fund–raising campaign. The company tried to tailor its promotional message in a way that made people consider its message and influence others to spread it further.

Marketing through influencers is about enabling influencers to talk about company’s prospects and word–of–mouth (WOM) has become its core with focus on the informal communication between influencers and private parties (Anderson, 1998, and Brown, 2008). Both fields of study have appeared as a result of the recent social media marketing practices and studies that put the focus on those key interested users that impose a greater than average reach and impact on others through the power of their communicated message. The importance of influencers derives from the common assumption that these online users can support companies marketing campaigns either by spreading a message far and wide or by making a message considered within a small but collaborative network (Mercer, 2012). There is a need of recognizing how individual influencers’ message reach others and induce them to spread it further. It is interesting to recognize various social media influencers and their particular approach in conveying company’s word–of–mouth message (Allsop, 2007; Mason and Davis, 2007). The characteristics of the word–of–mouth message such as words, content, language and expressiveness hide the key of reaching and convincing people to spread the message further (Dichter, 1966; Gabbott and Hogg, 2000;

Gremler, 1994). The word–of–mouth message such as its content and delivery strengthen the advocacy that relates to the intended power in delivering a given message (Sweeny, Soutar and Mazzarol, 2012).

Therefore, by taking into account the needs and concerns made so far, the present research has the goal to provide detail, rich and complete understanding about the distinct dimensions of influencers’ individual word–of–mouth messages – content and delivery – to find the main triggers of the word–of–mouth process. The practical significance of the research is to bring knowledge on the successful practices that go beyond the traditional marketing methods in providing and raising online awareness. More specifically, it demonstrates the effective methods of using company’s promotional message into influencers own content plan to support the process of word spreading. The research has also its academic importance in providing more understanding about the influencers’ individual word–of–mouth message that triggers and supports the word–of–mouth process.

Problem Formulation

Based on the problem area, a research question is defined:

What could be learned – based on the Logic Artists business case study – about start–up companies that enable social media influencers to increase the effectiveness of the word–of– mouth marketing campaign?

The research question is further narrowed down by the following two sub–questions:

 What does it imply to provide awareness through the word–of–mouth messages?

 What makes people support the process of spreading the word–of–mouth message?


Chapter two presents a general plan of conducting research. The chapter is a short demonstration of the structure of the research paper that has the purpose to provide a simple and logical “nexus” of guideposts.

1. Theory: The theory connects the research with the existing knowledge in social media marketing. Guided by the relevant theories – influencers marketing and word–of– mouth marketing – the researcher is able to make an appropriate choice of research method so to explain the role of social media influencers in triggering and supporting the word-of-mouth process.

 Social Media Marketing: The theory is used to provide information about the various social media platforms such as social networking web sites, blogs, and forums. The theory looks at the social structure in the online marketing communication platforms to understand the diffusion of information in and outside a social network. Social Media Marketing helps to be recognized those key users that support network information channels through creation and wide distribution of digital content.

 Influencers Marketing: The theory is used to provide understanding about social media influencers since there are various types of influencers and their recognition is usually based on different criteria. The Influencer Theory comprises four main activities one of which is Marketing through Influencers that use influencers to increase company’s market awareness amongst its target markets.

 Word–of–Mouth Marketing: Word–of–Mouth Marketing is an integral part of the Marketing through Influencers. Word–of–Mouth finds influencers to have a greater than average reach and influential impact on others through the word–of–mouth process.

Influencers have the power to inspire and trigger action through their word–of–month messages in which there is simultaneous provision of knowledge, trust and persuasion.

2. Methodology: the theoretical framework identifies the methodology – the strategic plan of action – and methods – the procedure of gathering, processing and analysing research data – that ease the implementation of the research plan. The process of

identifying social media influencers is as follows:

 Use of a business case study as a research method;

 The units of analysis are the social media users – observation of users status and conversation within their social network;

 The recognition of social influencers is done with the help of qualitative analysis of the collected numerical and qualitative data.

Once the social influencers are recognized, their word–of–mouth messages are further analysed with the help of qualitative content analysis. The purpose of the analysis is to relate influencers’ traits to the messages produced so to recognize the trends in word–of– mouth communication content and delivery.

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