How Big Data is Transforming the World of Crowdfunding

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NCFA Member post | Jan 26, 2017

Big data

Big data refers to the mining of data that has been collected over the years from telecommunications metadata to genetic codes. Analysis of “big data” allows doctors to find otherwise buried links between medications and side effects or successful treatment of otherwise “orphan” diseases. SEO is entirely based on internet usage “big data” analysis. Analysis of the massive amounts of data on financial transactions allows businesses to better correlate spending patterns with life events. And in this vein, big data and the analysis of it provides a major opportunity to crowdfunding groups.

More Accurate Predictions of Success

Prior to the Trump election, it would have been reasonable to say that big data and its analysis allows organizations to call an election based on polling and early voting returns. Trump’s election proved that human factors like fear of disapproval if the person supported a politically incorrect candidate skews voting polls, affecting political predictions. The 2016 Presidential election will provide fodder for students in online master of information degree programs for years to come.

That type of bias in financial predictions doesn’t occur. One reason is the sheer volume of financial data, preventing the skewed results created by a few percent points in a political poll when those polled hide their true opinion. The second reason is that financial data is collected as actions occur, providing the actual results, instead of using stated intent as a prediction of the future.

See:  Data Reveals: Rewards Crowdfunding is the New Seed-Funding

Analysis of “big data” on fundraising campaigns allows crowdsourcing investors to predict the odds of success for a given campaign.

Social Media’s Role

Social media has become so important it is one of the top three signals for the ranking of content by Google’s search engine. Social media also plays an important role in the success of crowdfunding campaigns. The University of Illinois found a direct link between social media activity regarding a campaign and crowdfunding success.

That study found that Twitter and Facebook were the most important social media platforms for getting the word out. This is also a case where targeted social media campaigns and SEO improve the odds your crowdfunding campaign will get the recognition and funding it needs. And whether tailoring SEO of web content or crowdsourcing campaign videos, there are ample job opportunities for those who learn how to do either via an online MLIS program from Rutgers Online University.

Crowdfunding Dynamics

Ethan Mollick’s 2013 study on the success of crowdsourcing found that longer exposure and larger funding goals make a campaign more likely to fail. Conversely, increased social media sharing and being featured on the crowdfunding platform increased the odds of success. As more data on crowdsourcing campaigns are compiled and analyzed, crowdfunding campaigns can be tailored to maximize their odds of success just as websites and business directories are tailored to rank as high as possible in search engine results.

As we gather more information, learn how to analyze it more accurately and account for biases due to data collection and human emotions, predictions based on analysis of Big Data will become more accurate. Social media and SEO impact the success of crowdfunding campaigns as well as provide demand for MLIS graduates. As we learn more from crowdfunding platforms and specifically how to tailor crowdsourcing campaigns to maximize their odds of success, expect to see crowdsourcing campaigns seek out “crowdsourcing optimization” experts, just as they seek SMO and SEO gurus.

Source:  Member post

The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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