Changing rules and regulations, the presence of scams, a larger number of target segments, and many other reasons make crypto marketing very different.
Over the course of my 20-year career (yup, I’m getting old), I’ve done all kinds of marketing in many different industries.
I have experience with content marketing, traditional and online advertising, event marketing, branding, analytics, market research, and many more. I’ve worked in software development, cloud computing, sports, consulting, government contracting, and a bunch of other industries.
And I’ve learned very quickly how different marketing for these companies is, compared to the other industries I’ve worked with. It’s like night and day.
Here are the primary differences I’ve identified and will dig into:
- There’s more of a focus on community
- The rules are always changing
- Scams are abound
- There are many more target segments to engage with
- Current users have a strong focus on privacy, pseudo-anonymity, and security
- We have no direct control over token price
- Understanding the tech is more important
1) There’s more of a focus on community
Because we’re so early, there aren’t clear business and revenue models in crypto, nor are there definitive, proven ways to market these products.
That’s why building a strong, engaged community is so important in crypto.
But they are even more critical in crypto.
While Bitcoin and Ethereum are very innovative technical products, their passionate communities are what separate them from the rest of the cryptocurrencies.
A cryptocurrency’s value can be driven solely by the strength of its community and memes that come out of it. Founder of Scalar Capital Linda Xie wrote a great article on how memes can help build passionate followings and highlighted the Dogecoin case study.
Dogecoin is a cryptocurrency that started out as a joke and has absolutely no real-world use. But it has a market cap of over $200 million primarily because of a fucking Shiba Inu.
Building and consistently engaging communities on Twitter, Discord, Telegram, and other social networks allow you to converse with your members, communicate the benefits of your platform, and garner feedback consistently.
Community reigns in crypto!
2) The rules are always changing
It’s early days in cryptoland. No one really knows what the rules are, which makes marketing really difficult.
Let’s start with the laws that are set by the SEC and CFTC. While some countries like South Korea and India have clarified their crypto regulations, the US’ laws have massive gray areas that make crypto companies unsure about how to operate.
Are cryptocurrencies commodities or securities? What makes them one or the other? Can they start as one then evolve to become the other?
Too many questions and not enough answers.
The lack of clarity on the legal front leads to opacity on many marketing platforms. Facebook, Instagram, Twitter, and Google have all banned crypto ads at some point, and many other smaller ad platforms follow suit.
The rules about posting crypto-related content keeps changing as well. One day you can post as many videos about cryptocurrency on YouTube, the next day you’re banned.
Again, that’s why building a strong community is so important. No one can take your community away from you.
While many of us marketers pride ourselves on being agile and flexible, the constantly changing rules and regulations make doing our jobs really tough.
3) Scams are abound
One of the reasons the rules and regulations are always changing is because of the myriad of scams that occur in the crypto space.
ICOs introduced an innovative, democratized way for companies to raise funds outside of traditional venture capital and banking channels. And thousands of crypto companies took advantage of this during the ICO boom of 2017.
While many of these projects are still alive and kicking, the vast majority of them were scams that made their founders rich and fleeced their investors.
Everyone knows about Bitconnect, the massive exit scam that promised earnings of 1% daily and up to 40% each month.
More recently, the PlusToken scam attracted investment of more than 200,000 bitcoin, 1% of outstanding supply.
The presence of scams like these makes marketers’ jobs tough in a number of ways.
First, if you’re marketing a crypto protocol, you may face skepticism that your platform might be a scam.
The abundance of scam ICOs have given people token PTSD. Thus investors, potential users, and the broader industry may harshly criticize your pre-sale tactics, token economics, and many other aspects of your platform and deem your project a scam, when it’s really not.
Next, many service providers may not allow you to use their products, or make it more difficult to do so, simply because you work in the crypto industry.
I mentioned earlier that ad platforms like Facebook and Google have changed their crypto marketing rules many times.
Currently, I am going through an onboarding process where an email service provider is asking questions about one of the companies I consult with. They want to make sure we’re not using their email platform to run a scam, and they want to maintain their high email deliverability rate. While I can’t blame the company for doing this, it’s annoying.
Finally, partnerships are important for growth in crypto. And because it can be difficult to identify a crypto scam, we have to be super careful in doing due diligence of companies we partner with.
In traditional industries, it’s much easier to identify bad actors. If a traditional financial institution is registered in Malta or the Cayman Islands, that raises a red flag. In crypto, that’s the norm!
The Cayman Islands has very crypto-friendly regulations as opposed to larger, more established economies. And the majority of crypto trading volume takes place on Malta-based exchanges.
It’s definitely tougher to identify scams in crypto, which makes in-depth research and due diligence for partnerships much more important.
4) There are many more target segments to engage with
If you’re marketing a product in sectors such as consumer packaged goods, financial services, or other more traditional industries, you typically have a clear end user you’re targeting.
For example, if I’m marketing wealth management services for Morgan Stanley, I’m likely targeting upper-middle to upper class people with stable incomes and a solid net worth. In general, most of these customers will have similar life goals and respond comparably to my marketing message.
If you’re marketing a crypto/blockchain protocol, you have many different types of end users you need to reach.
You may need to recruit developers to build on top of your protocol.
You may need to engage miners or validators (depending on whether your protocol uses Proof of Work, Proof of Stake, or other consensus mechanisms) to help secure your network.
You’ll have to interact with investors, whether they are venture capitalists looking to fund your project in exchange for equity, or retail investors who want to trade your coins for profit.
You’ll need to work with exchanges to get listed so retail investors can buy, sell, and trade your coin.
You may need to build mobile or desktop apps for your cryptocurrency, so you’ll have to work with end users to ensure that you build a great product experience.
If you’re building the next iteration of money, you may have to work with merchants and retailers to get your cryptocurrency adopted for payments.
Even within these segments, you have to understand where on the educational spectrum they lie. Are they crypto newbies or experts? Are they learning how to build on blockchain for the first time, or have they been creating advanced smart contracts for a while?
There are so many more audiences you need to engage and many different levels of knowledge, which makes crypto marketing very different and more difficult.
5) Current users have a strong focus on privacy, pseudo-anonymity, and security
Bitcoin was built in large part in response to the economic bailouts received by big banks after 2008’s economic crisis. The OG of cryptocurrencies aimed to circumvent the centralized control and poor monetary policies set forth by governments.
As such, censorship resistance, privacy, pseudo-anonymity, and security are core tenets of the cryptocurrency industry and are paramount for much of the current user base.
These are certainly admirable principles but they don’t make a marketer’s job any easier.
The data we collect on user behaviors helps us understand how our products are being used and how we can improve them. Tools like Google Analytics, Mixpanel, and Amplitude, allow us to gather data on product usage and unearth user insights.
In crypto, it’s much more difficult to track and analyze user behavior due to the focus on anonymity and security.
I recently spoke with a founder who is building a decentralized marketplace about how he measures activity on his platform. He said that it’s tough to call the merchants who run stores on his platform “users” because he knows very little about them and who they are. Rather, he has to resort to the more literal, technical term “nodes” (each merchant runs a node), and he has very limited data about these nodes.
It’s very difficult to perform feedback surveys and user interviews because many times you have no idea who your users are! That’s why building a strong community is so important.
There is an opportunity for crypto marketers here though. If you are willing to put in the effort to discover who your customers are, interact with them one-on-one, and really get to know them, you’ll be ahead of the game.
6) We have no direct control over token price
Pump it! To the moon!
Token price is such a big part of the success of a crypto protocol. When the price of the token goes up, community engagement and sentiment increase, and more investment money flows in, causing a virtuous cycle.
And we, as marketers, have such little control over that.
Yes, if we build great protocols and products, market them well, and gain lots of users and revenue, theoretically the price and market cap of our token should go up.
But at this early stage of the industry, there’s no way to really guarantee that.
In traditional markets, the correlation between company performance and an increase in stock price is much higher for publicly-traded companies. Investors have tried-and-true ways of valuing companies, such as Discounted Cash Flow, asset valuation, and comparable company analysis models, so they have a pretty clear understanding of how to correlate certain factors to company success and a rising stock price.
Even non-crypto startups are easier to value because there is much more historical data to analyze. Chamath Palihapitiya’s VC firm Social Capital is famous for using a data-driven approach to assess potential investments by comparing the growth rate of those startups to that of its portfolio companies. And tools like Crunchbase and CB Insights allow investors to access tons of data to analyze and value startups.
Data tools that help investors analyze the quality of a crypto project are getting much better. Companies like Messari, Nomics, Kaiko, and many others aim to provide reliable, enterprise-grade market data. But we’re still early.
And as crypto marketers, all we can do is put our head down, ignore the noise, and not try to look at the price too often (unless it’s going to the moon, of course).
7) Understanding the tech is more important
If you’re marketing a customer relationship management platform, you don’t really need to communicate that the software is built with ReactJS on the front end, Python on the backend, and is powered by AWS EC2, RDS, and S3 cloud technologies.
If you’re marketing a blockchain protocol, you will need to know what consensus mechanism your protocol uses, how the network’s security is maintained, and many other technical aspects.
Even if you’re building products that aren’t protocols, such as a crypto wallet, a decentralized finance application, or a blockchain video game, the emphasis on security forces you to be knowledgeable about how your application will protect users’ funds and identities.
And all of this technical knowledge is no joke.
Marketing in cryptoland is very different from marketing in more traditional industries.
Changing regulations, the presence of scams, a larger number of target segments, and many other reasons make crypto marketing a different beast.
I believe that marketing crypto is much more challenging. But it also provides us with an opportunity to be innovative and lay the groundwork for best practices.
And it’s super fun!
What are your thoughts on the differences between crypto and traditional marketing? Did I miss anything? I’d love to hear from you!
I hope you found this interesting! If so, please give this article a bunch of claps so more people can find it! I’ll give you a big hug if you do. :)
Originally published at http://www.mikewchan.com on April 14, 2020.