The Challenges of Blockchain Marketing | Your 5 Minute Guide for 2019
In my opinion, the blockchain space is one of the most interesting and dynamic areas of work you can find. Not only is it incredibly young but it's also highly innovative, providing novel solutions to previously intractable problems - a marketers dream.
I've been working in the blockchain space since 2015, starting at the global SME lender Bitbond. When I joined, the company was the epitome of a startup. Working from within the CEO's living room on frail, plastic, pink chairs and operating chromebooks. There were no official office hours and Jings - the office dog - roamed free.
3 years later, we had grown our monthly loan volume from $9,000 to $1.4 million and acquired over 130,000 registered users. Our team grew from 4 to 27 people and we moved into fancy new offices.
Now I work as the Director of Marketing for SelfKey, a blockchain-powered identity management system, and KYC-Chain, a scalable customer onboarding solution focusing on the crypto space. On the side, I work as a Marketing consultant helping ICOs, STOs and other cryptocurrency ventures get the results they want.
This allows me to work alongside startups that find innovative solutions to rather unique problems. In this blog post I outline the most important challenges you will face while marketing your blockchain-powered business and suggest solutions that have worked well for me.
What are the challenges of Blockchain Marketing?
Marketing a platform in the blockchain space brings a number of significant challenges. Here are the most important.
1. You need to acquire a vast number of users
Businesses are typically B2C and require a vast number of registered users. More specifically, blockchain-powered platforms offer aggressive pricing, in order to compete with their mainstream counterparts.
Let's take the lending industry as an example because it illustrates this point very well.
With such low customer lifetime value, blockchain-powered platforms need to acquire many more users in order to grow and become profitable.
From a marketing perspective, this scale represents a completely different problem to what you might be familiar with from other sectors - like eCommerce or anything in B2B.
The solution will depend on your vertical and your customer personas. As a starting point, I would suggest Email Marketing, SEO and PR as (relatively) cost-effective acquisition channels that generate a sustained inflow of new users.
2. You need to manage a large community
If you've spent some time in the cryptocurrency community, you will have seen a plethora of Telegram groups with tens of thousands of users. Additionally, most companies command a significant following on social media as well.
As a marketer it is your job to maintain, moderate and engage your audience. This is an incredibly time-intensive task, and if you're company has a tight budget, you will inevitably find yourself deleting spam, banning users and providing answers at all times of the day.
In an ideal world, you would have someone like a community manager to fulfill this role full-time. In the real world however, you will likely have to do all this while acquiring new users and managing a host of other tasks.
The key characteristics of a good community manager are assertiveness, being informed, staying professional (despite all the FUD) and answering questions. Although it can be tough at times, it's also incredibly rewarding to discuss your service with engaged community members.
As a side note, I would highly recommend the use of Telegram bots (Group Butler & MIss Rose Bot are good) to delete spam links. I also recommend the creation of a Telegram Channel (in addition to your Supergroup) which is dedicated to announcements.
3. Adwords and Facebook are cracking down on Cryptocurrency
With the summer of crypto love came an explosion of interest, not only from individuals, but also from regulators and large corporations. As the ICO craze faded and many retail investors were left holding a worthless bag, the blockchain industry took a severe hit to its reputation.
For Marketers the consequences have been catastrophic. Blockchain marketing was at its best when it could effectively utilize Adwords and Facebook as customer acquisition channels. Both have an incredible reach and the best targeting options in the world. As of April 2019, both platforms have significantly cracked down on cryptocurrency projects.
More specifically, you will find that launching a campaign is an excruciating process, because creatives, landing pages and your messaging are flagged as dangerous and consequently rejected.
Getting around this is tough even if your platform is only vaguely related to cryptocurrency. There is no proven process as both Facebook and Adwords seem temparemental and somewhat unpredictable when it comes to advertising campaigns.
Yes, ostensibly both have an approval process, but I've experienced very mixed results - often failing to get any kind of response (especially from Facebook).
My advice is to keep trying new creatives, messaging and landing pages. Out of 10, 9 might get rejected but one will (mysteriously) be accepted
On a final note here, I've also found that different languages receive different treatment from both platforms. If English campaigns are being rejected, it's worth trying others.
4. You're at the mercy of the token price
Most marketing activities in the blockchain space will involve a native utility or security token.
You wont necessarily have to promote the token, but you will have to roll with the punches. What do I mean?
The portion of your community which holds your tokens will be acutely aware of the price. In 2018, the cryptocurrency industry experienced a bear market, with the total market cap collapsing from $800 billion to $145 billion. As a result, many investors have lost money and have become alienated by cryptocurrencies as a whole.
From a marketing perspective, this is a unique situation. Imagine if you worked in Nike's marketing department and every time the stock price dipped, sneaker heads started harshly criticizing your Air Jordans. That's what marketing in the blockchain space can feel like.
The best way of fighting it is to plan your content and your announcements strategically. Always try to have some good news in your back pocket, in case the negativity threatens to overwhelm your community. Additionally, make sure to shut down and remove community members who do not react to warnings and continue to spread FUD.
5. You have to engage a vastly disparate community
Cryptocurrencies are unbounded by the confines of national sovereignty. Instead they operate internationally, with people from all walks of life, and all geographic locations getting involved. I highly doubt any other industry encompasses as many countries, ideologies, and socio-economic strata as the blockchain industry.
From a marketing perspective this poses quite a few challenges.
Most importantly, the language proficiency of your audience will vary significantly. Some will be native while others will be nearer an A2 level. This means that you need to be very careful when crafting the messaging on your landing pages, newsletters, blog posts and ad campaigns. Be sure to avoid complicated jargon especially on your homepage.
The challenge is to communicate your unique value proposition without falling back into generic buzz words. You need to be specific, clear and understandable to a non-native speaker. Not an easy task.
Additionally, it's important to understand the vastly different levels of understanding in your community. Some are likely crypto-heads who remember the original BitcoinTalk forum threads. Others however, will still be beginners and are perhaps attracted to financial gain without understanding the risks involved.
That is why I would suggest having an ELI5 tag on your blog. This tag is reserved for very short, clear, beginner level content. Here you can provide brief answers to questions like:
- Who controls the token price?
- What is a main-net?
- How does blockchain technology work?
Not only will this help you quickly answer questions on Telegram and Reddit, but it provides valuable content for your newsletter as well.
6. Ridiculous influencer pricing
When I got married in 2016, I was struck by how the word "wedding" seemed to add an extra 100% to the price tag of rather mundane items. Wedding flowers, wedding cake, wedding ring...everything was suddenly double the price.
Well, the b2b blockchain space is similar - especially the "crypto influencers".
Let me provide a quick caveat and say that many influencers provide great value for money and are worth every penny.
Others however are going to astonish you with highly unprofessional communication, demand €50k for a 10 minute video and leave you with ZERO ROI.
To prevent this from happening, check out influencers on Social Blade to see if their social media following is bought or earned. Sudden, short spikes of several thousand followers/subscribers are usually a strong sign that the influencer is buying his or her following.
Instead, look for long-term, month over month growth. Next, spend some time reading through the comments and understanding the engagement rates. If you're even a little bit apprehensive, don't work with them.
Most importantly, try to reduce the upfront fee as much as possible and tie their earnings to performance. I recommend offering half of their original demand plus an attractive affiliate commission.
If you don't have an affiliate program, see if you can work with unique discount codes. The more apprehensive the influencer is of a performance-based portion of the fee, the more wary you should be. At least with a wedding cake, you still get to eat it. With crypto influencers you might be left with nothing.
7. You have to fight the FUD
FUD is an ever-present acronym in the cryptocurrency-space and stands for Fear, Uncertainty and Doubt (FUD).
It typically describes the process of spreading negativity in "rivaling" communities, but can equally be caused by disaffected community members.
The key here is to answer questions in a comprehensive and professional manner. No matter how malicious the intent of the person might be, all relevant fears and doubts should be addressed. When it becomes clear that someone is not interested in a dialogue and instead aims to spread fear, ban them and delete their posts.
You have to protect your community from those who aim to weaken it.
8. A lack of data
The blockchain space is deeply routed in individual empowerment and privacy. The whole point of Satoshi's original whitepaper, was to provide a digital cash which could be used without the need for powerful middle-men.
In my time as a consultant I've seen numerous platforms avoid the collection of customer data in order to honour this philosophy.
The result is a significant dearth in information. As marketers we rely on data to make smart decisions. This is close to impossible when your client refuses to use Google services due to a (perhaps) misplaced fear of the misappropriation of data.
You have my condolences if you find yourself in this situation because Google Analytics, Google Search Console, and Google Tag Manager - key components of our repertoire - are now out of reach.
As a solution, I would suggest using Matomo (formerly PIKWIK) instead. Matomo allows you to collect customer data and host it on a dedicated subdomain. Therefore you never share your customers information and at least get some data to work with.
Conclusion | The Challenges of Blockchain Marketing
As you can see, there are a number of unique challenges Marketers have to face in the blockchain space. Keep your eyes open for the next post in this series, in which I'll list the most important advantages of blockchain marketing.
Thanks for reading.