When Warner Bros decided not to fund Rob Thomas’s feature film for the now cancelled TV series Veronica Mars, he looked to Kickstarter—and the Kickstarter community responded. Reaching $2 million dollars in less than ten hours, Veronica Mars broke multiple records, gathered the attention of the industry, and had people seriously reconsidering the legitimacy of crowdfunding. Today, the top five projects combined have received over $32 million dollars in funding.
Although Kickstarter was founded in 2009, several years after other crowdfunding sites like Pledgie, the site has quickly become the market leader and poster child for online crowdfunding. Consistently bringing in around 1.5 million unique visitors (UVs) over the past few months, they have solidified their place at the top and have become synonymous with the concept of crowdfunding.
In terms of traffic and market recognition, Indiegogo is definitely a close second to Kickstarter and their closest competitor. Although Indiegogo only sees half the traffic of Kickstarter, their engagement metrics are very similar—indicating that with consistent traffic increases, they could knock Kickstarter off their throne. However, what really matters when running an ecommerce site is the bottom line. So how do the two sites compare on conversion rates?
Taking a look at crowdfunding conversion funnels
For a Closer Look, Click on the Funnels
Using data from Online Conversion Insights, we are able to see how the two sites’ conversion rates stack up against one another. Thankfully, at least for the sake of this analysis, the conversion funnels of the two sites are nearly identical. A visitor arrives to either site, checks out a project that they may be interested in, chooses how much they would like to contribute, and then completes their pledge. As you can see above, the terminology is slightly different between the two sites (Kickstarter uses “Pledge” and Indiegogo uses “Contribute”) but besides that there is little difference between the conversion process. Please note that the above funnels represent the aggregated conversion data from January to September, 2013.
So how do they compare? The most striking difference is the rate of visitors that reach a project page. This may be surprising to those who have visited both sites considering the layout and presentation of projects available to fund are almost identical. This leads me to believe that there are other reasons for the first step in Kickstarter’s conversion funnel to be 28% higher than their closest competitor.
One of the most reasonable assumptions is relevance and optimization through the proper use of data trends. Not only does Kickstarter see double the traffic of Indiegogo, but they are significantly more sophisticated when it comes to tagging every single step of the way (through the use of URL parameters) in the visitor’s path to purchase. From this we can infer that Kickstarter leverages their data to include the highly relevant projects on their homepage that can expect to receive the highest click through rate. Another explanation is that Indiegogo redesigned their site in the past year to something that more closely resembles Kickstarter.
The reason why I believe that Indiegogo has made changes to their homepage in the past year is because of the way that the first step of their conversion funnel is trending. As you can see, over the past year they have significantly improved the first step, even reaching the rate that Kickstarter saw during the month of June. Although the improvement is fairly steady over the more recent months, the increases that they see in the beginning of the year lead me to believe that they underwent a (successful) redesign.
Indiegogo wins: calling to action, inspiring, showcasing?
Although Indiegogo is behind Kickstarter on two of the conversion steps, they are ahead of them by a wide margin on the second step.
Maintaining a higher conversion rate in the second step throughout every single month of 2013, Indiegogo is definitely doing something right on their projects page. But what is it? Converting visitors at a rate 40% better than the market leader is no easy feat—especially when the projects are fairly similar, their visitor demographics are nearly identical, and the layout of the project pages are almost indistinguishable.
By taking a look at the site, there are a few things that we can infer that may be the reason why Indiegogo’s project pages are converting better. One of the most glaring differences is the call-to-action. Assuming that the color of the buttons aren’t a factor due to the good conversion rates that pink or green buttons normally receive, we can only assume that the button copy is having an affect. My guess? The inclusion of “$1 Minimum Pledge” in Kickstarter’s button copy is a point of friction and is contributing to the lower conversion rates. Although visitors realize that they will be paying money when they are contributing, in my experience it’s best to leave the price out of the call-to-action unless the price is free.
The low conversion rate in the previous step could be another reason for the higher conversion rate of the projects page. Because they see a lower drop off rate from the home page, the visitors who do make it to the projects page are more likely to be interested in the project and are therefore more likely to continue onto the next step. Whatever it is, Kickstarter seems to be aware of it. In the last two months the difference between the two sites has been the lowest it’s been all year.
In the end, Kickstarter still comes out on top
Despite the 40% margin Indiegogo has coming into the final step, they still manage to register a lower conversion rate. As you can see in the graph above, they do manage to earn a higher rate a few times this year, but on average they come in at 0.29% less. If I were Indiegogo, this would be the most concerning. Although a 58% abandonment rate is on track with ecommerce averages, it is nowhere near the 35% abandonment rate their direct competitor is seeing.
Indiegogo is definitely taking steps in the right direction. They are seeing traffic gains that are on track with Kickstarter, they have cleaned up the first step in the conversion funnel, and they are gaining market recognition as evidenced by the rates of cross-shopping (during the month of September, 6.1% of Kickstarter’s visitors also visited Indiegogo—up 76% from the beginning of the year). But if they really want to increase their bottom line, they should seriously consider addressing the abandonment rate at checkout. After all, if they saw the same drop-off rate as Kickstarter, they would have a conversion rate of 3.34%. That’s a little over 140,000 additional conversions for this year alone.
By using your competitors’ conversion rates to benchmark your performance, not only will you have an edge of them, but you will be able to identify problematic areas in your conversion funnel that you otherwise would not have noticed. If you would like to see your competitors’ conversion data please contact us. No matter what you identify as a conversion, we will be able to track it every step of the way—for any site. So, how will you benefit from knowing your competitors’ conversion process?
As a senior at Northeastern University, Zach Eberhart is thrilled to join the Compete team as the new Social Media / Marketing Co-op. Majoring in marketing and management information systems, Zach loves everything marketing and technology and has experience in both the agency and startup world. If you like what you read, you can connect with him on Google+ or LinkedIn.