The marketing elephant in the web3 room
Over the last 2 years, the Attrace team has spoken with approximately 350 projects and investors in the web3 space about marketing. The summary of these conversations should be considered as a wake-up call:
As the interest in crypto investment is slowly picking up again, most projects and investors are approaching the web3 space the same as before, where investment decisions seem to be heavily based on:
- Social media following, which ignores the fact that you can easily buy 100,000s of followers for Twitter, Discord or Telegram on various marketplaces. We therefore like to call them vanity metrics, as they say little about the true prospects of a project: https://hypetrain.io/blog/how-to/how-much-do-fake-followers-cost-how-to-spot-fake-influencers/
- Trading volume, which is simply a matter of using a market maker with a slightly less strict view on wash trading. Any crypto project knows this. For most projects, wash trading can be considered best practice to look good: https://cointelegraph.com/news/wash-trading-will-cause-crypto-s-next-implosion-mark-cuban
In other words, some of the main metrics that investors still use when deciding to invest in web3 projects can easily be bought; based on 100s of conversations, the Attrace team believes that at least 70% of projects are still doing this.
Even more surprising, it seems that most investors are aware of this to some extent, but choose to simply ignore. Few web3 projects and investors are actually looking beyond the immediate, with most continuing to ignore history:
What has been one of the underlying drivers for the rise of web2?
What has been overlooked by almost everybody in the web3 space?
A problem seems to be that both web3 investors and projects are confusing referral marketing with “community management”. Community management should only be considered to be a part of referral marketing. Yes, you can share referrals via a community. However, for it to work you also need to determine the true value-add of these referrals.
Just like web2, eventually a significant driver for the success of web3 is going to be performance based referral marketing, to improve both distribution of web3 assets and services as well as experiences for buyers:
- Affiliate Marketing
- Cashback Marketing
- Capturing the value of “Word of Mouth”
- or any other type of performance based referral.
So if you are a web3 project or investor, you need to have at least a basic understanding of how performance-based marketing works in web2, and how it could work in web3. Because with blockchain technology, the imperfections that held performance-based marketing back from becoming the main marketing vertical in web2 disappear — that is, no more trust/tracking/transparency issues and no more data privacy issues to name two such impediments.
Not convinced? Simply follow the money: How much of the investment in “marketing” of a web3 project was either completely wasted and/or ended up — indirectly or directly — in the pockets of influencers with fake followers?
… Which web3 entrepreneurs are actually driving the Lambos?:)
The thing is, if you want to allocate your web3 marketing budget in a more targeted manner you need to set up marketing based on web3 fundamentals.
This protocol exist now. Attrace can connect referral links with true activity on a blockchain, so you can reward only those that contribute to the true on-chain value-add of your projects.
This means it also enables the assessment of the true on-chain value-add of a community outreach…
So far the protocol has shown that in case a community is at least partly real, an ROI between 5 to 30x is achievable. And to repeat ourselves, in this case ROI means additional true on-chain value-add that can be verified by a third party in a completely trustless and transparent manner.
It is a methodology that prevents marketing budgets from being wasted on metrics that might not have any impact on the real intrinsic value of web3 projects.
… So let’s see when this sinks in with the general web3 public.
The Attrace team is betting on the idea that it will take at least another 18 months, unless of course more projects are starting to assess their marketing expenditures more closely.
Once that happens web3 will finally have a marketing methodology based on web3 fundamentals.
… That would be an online marketing upgrade.
Attrace protocol is capable of connecting referral links (via social channels, websites, cross-chain and the Metaverse) with true activity on a blockchain (e.g., buy and hold crypto or NFTs via a DEX, or engage with a DeFi smart contract like a lending protocol). The solution works via creating a three party relationship, between public wallet addresses of Project, Promoter and Buyer in combination with a Network of Oracles that can “observe” any asset on a blockchain.