Jan. 15, 2019
I am interested in studying consumer behaviour and marketing strategy across a variety of digital contexts ranging from content sites, social media, e-commerce to crowdfunding. My recent research on digital crowdfunding extends to the domain of entrepreneurship and in particular the branding of early stage ventures. This research explores how early stage ventures can develop effective digital branding strategies by focusing the role of visual aesthetics of brand elements such as logos in driving investments on online crowdfunding platforms.
Logos are routinely used by entrepreneurs and ubiquitous on the landing pages of crowdfunding platforms and campaigns. Yet, knowledge about the effects of logo design is incomplete. My paper, “What's in a logo? The impact of complex visual cues in equity crowdfunding,” co-written with Jonathan Lufarelli and Mudra Mukesh, published in the Journal of Business Venturing examines how visual cues, and particularly logos, can influence backers on equity crowdfunding platforms. Specifically, since visually complex logos are perceptually more difficult to process, they are likely to be perceived as less familiar and thus more unique, original and novel by backers. As such, they positively impact backers' perceptions of venture innovativeness. Since backers often value innovativeness in entrepreneurial ventures, this perception leads to increased willingness to invest.
These findings regarding the influence of visual cues is in contrast to established wisdom regarding the drivers of crowdfunding success. Prior studies have indicated that startup venture's potential success is strongly associated cues such as patent ownership, the size of the equity raise and the founders' education and network. Our research shows that even though logos are cues that often do not communicate private information, are not costly to produce, and are easily imitated by other ventures, the subjective experience of ease/difficulty with which backers visually process logos can be interpreted as signals by backers and inform their perceptions of ventures and funding decisions. More surprisingly, during the investigation we found that entrepreneurs overwhelmingly favour simpler and less complex logos for their ventures and they do not fully leverage the benefits of more complex logos.
Our paper holds valuable insights for such entrepreneurial ventures engaged with crowdfunding platforms. We demonstrate that entrepreneurs should favor using more, rather than less complex logos to improve funding outcomes.
Extending the research on the role of visual brand aesthetics to the context of consumer behaviour, my colleagues and I are working on a related study that explores the role of logo descriptiveness. We demonstrate that more (vs. less) descriptive logos can positively influence consumers’ brand evaluations and purchase intentions, as well as the brands’ financial performance. We also demonstrate that these effects occur because more (vs. less) descriptive logos are easier to process and thus elicit stronger impressions of authenticity, which consumers value. These studies will advance our understanding of branding in general and visual aesthetics in particular from both a consumer and firm perspective.
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