Trends in Pricing and Duration
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A couple of weeks ago we linked to Craig Mod’s gorgeous and thorough breakdown of his Kickstarter project Art Space Tokyo. In the post Craig sampled other popular projects on Kickstarter, and explained how their choices and outcomes affected the way he constructed his project. Craig also offers some advice on optimal pricing and project length to future project creators. We were intrigued and impressed by Craig’s research and conclusions, and we’ve now compiled data from our entire database to see how it holds up. Let’s dig in.
Reward Popularity and Power
In sampling the Top 20 grossing successful projects, Craig observed that $50 rewards appeared to dominate — accounting for almost 25% of all revenue to the projects he sampled. We were curious whether this would hold true across the site, so to compare Craig’s observations with our own data, we sampled rewards from all successful projects.
Looking at the totality of successful projects, $50 rewards make up 11.44% of aggregate dollars pledged versus Craig’s hypothesized 25% — though it is the second largest tier. $100 rewards are the highest-grossing level, representing 16.36% of collected pledge dollars despite ranking fourth in reward popularity.
But pledges aren’t just about dollars raised. Take the $25 level. Though it only represents 8.14% of aggregate dollars pledged, it’s actually the most popular reward tier, representing 18.41% of all rewards chosen (the tallest blue bar above). $50 reward pledges make up 13.57% of all backings.
The lower priced levels are also significant. Reward tiers under $25 constitute a combined 38% of pledges and 10% of dollars raised on Kickstarter. $10 rewards are the third-most popular (ninth in dollar contributions to the site), and $5 rewards are the sixth-most popular (17th in dollar contributions).
In his report, Craig argues that lower tiers are “statistically insignificant” and that creators should avoid them. Without launching a batch of fake identical projects, it is impossible to determine whether lower priced rewards cannibalize demand for higher priced ones. That said, we’ve always been confident that sub-$25 rewards offer an affordable way to get more people involved in a project, and this data does not change our mind. Remember, additional backers don’t only offer additional money, they also spread the word.
Here’s the table of the top 30 most popular reward tiers, with their contributions to the site’s dollars and aggregate pledge totals:
|Reward Minimum||Percent Pledges||Percent Dollars|
When Craig examined his project, he noticed that it dragged during the middle of the campaign. Craig called this period the “Dead Zone”; we call it the trough. When a project first launches, there’s an immediate spike of activity as the creator starts spreading the word. And as a project nears its deadline, there’s another spike as two things happen: 1. the creator and backers promote the project to make sure it’s funded or that their friends get in before the end, and 2. people who’ve been sitting on the sidelines (but meaning to pledge) finally jump in before the bell rings.
In the above graph, I’ve plotted five different duration-classes of successful projects as distinguished by their duration. (Projects tend to pick durations around common milestones — 30 days, 45 days, and so on. To be more inclusive I used a rounding function to group different projects within 2.5 days of the milestones.)
What’s most significant about this graph is how uniform the shape of the curve is for all project durations. Most projects will get that burst of interest in the beginning and end — the middle is up to the creator to maintain momentum, typically through press, events, and other promotions.
That’s the shape that successful projects take. But how big a factor is a project’s duration?
Project Duration Choice and Success
Finding the optimal project duration, if it exists, has been a topic of much discussion at Kickstarter HQ.
For the above graph, I pulled data on project durations and compiled it into a probability density function plot. The X axis represents a project’s duration, and the Y axis represents the relative popularity (or to be more precise: the probability that a random successful or unsuccessful project will fall into that space) of that duration. The data is split into two factors, green representing successful projects and red representing unsuccessful projects.
As you can see, successful project creators choose a 30-day duration most frequently, while unsuccessful projects most frequently choose 45 and 90-day (the max allowed) durations. There are some causation/correlation issues here. The graph does not mean that a project’s chosen duration will influence its eventual success, but it does tell us something about who chooses what.
Anecdotally, we’ve found that 30-day projects tend to be created by people who are more optimistic about their chances, and who stay engaged in recruiting new backers and activity to their project. Conversely, people who choose a longer duration are less confident, and are operating under the mindset that longer is automatically better. But we find that more time doesn’t create better chances of success. We recommend a 30-day duration as sufficient to maximize the burst of activity at the beginning and end, and still have a small trough where you can regroup or allow some momentum to build. In the end, it’s the Internet, things spread fast — even 30 days is a long time.
We want to thank Craig Mod for taking the time to create his beautiful report (which if you haven’t read by now, you absolutely should). The Kickstarter team had a lot of fun reviewing and discussing his findings, and it gave us this great opportunity to share more of those with you, our community.
We’re always eager to learn more about how Kickstarter works, and every new project is a chance to learn more. If you’ve done any of your own research, or just have a good question you want answered, let us know!