After 2017 boom, has the crypto fundraising landscape gone to shites? How much should you be spending on marketing?
It has been almost 2 years since the boom of ICOs in the blockchain landscape. As much as there’s an impression that ICOs are no longer the hot topic, there are still at least 380 token sales ending every month. Out of thousands of ICOs, we’ve only known that few blockchain projects we’ve “heard of”. If you’re thinking that IEOs are totally different, think again – it’s only a different token sale platform and also having a guaranteed exchange listing from the start which gives investors confidence.
With that said, you’ll still need your marketing efforts to make sure they reach as many targeted people as possible. From my experience as a marketer who’s worked on over 17 ICO projects, the below are what you should know before even beginning work on your whitepaper.
The Crypto Marketing Landscape
The average amount spent on marketing blockchain projects starts from US$500,000. Typically, projects allocate 6-35% of their targeted raise, or raised funds, to marketing. This is how important marketing is for blockchain projects. With the bulk of the current crypto landscape focused on fundraising efforts, advertising agencies and platforms are leveraging on this opportunity. Of course, higher advertisement bidding fees are also caused by the tightening of regulations and intense competition within the industry – you can expect to triple your marketing spend for a crypto start-up in comparison to a non-crypto start-up.
Within the last two years, I’ve met more than enough project owners who have told me that they think marketing is not important as they’re looking to do the token sale only in a few months’ time. This is a grave misconception as even with budget, it always takes time to build traction. Furthermore, even your private and institutional investors will do their due diligence online to make sure that you do have a community when it comes to project traction and possibility of mass adoption. Your private investors will look at your digital footprint and see how you’ve been handling your community on Telegram and social media platforms. These numbers and interactivity are crucial to you even getting your first raise months before the public crowdsale starts.
Building the Right Team
With every successful start-up, choosing your founding partners may be one of the biggest investments and gambles you have to take in your entire life. Who you work with defines how the start-up will take off and, especially so in crypto, how institutional and retail investors will form an impression of the strength of the team. Of course, you’ll need your Chief Technology Officer (CTO) – come on, we’re in blockchain. You can expect to spend millions on just developing an app if you’re thinking of outsourcing.
People often forget that marketing is one of the most important aspects to a company. Think of any companies or brands you’ve heard the most. What about their competitors? There is always disparity and choice when it comes to choosing certain products and services; and most of these choices come from branding and marketing as the determining factors. Before you move into launching your ICO, make sure you have a Chief Marketing Officer (CMO) who knows what he or she is doing. Ideally, your CMO should have experience in running digital ads and content writing as these are the key areas to reach your audience.
Things You Must Spend On
Once you have your founding partners and are ready to launch, your next step is to decide on what you have to spend on. These are the items you definitely need budget to kickstart. Content writing makes up 70% of most projects.
1. Running digital advertisements
When formulating your concepts and ideas, always look for ways to do lead generation. Lead generation comes in many forms and ways – you can either spend money on it or just a lot of time on it to grow organically; which latter is often the most taxing but extremely powerful. Call-to-action for direct purchase in your ad copywriting, creatives as well as on your landing page will result in your ad getting banned on most advertising platforms or networks such as Facebook, Google and LinkedIn. Focus on delivering educational pieces and writings on blockchain or your project’s concept in your copywriting and landing page. This means you’d have to create a longer funnel to convert your reach to a token purchase.
2. Engaging a designer
If your CMO is not experienced in design and you do not have an in-house designer, you need to spend on design. Branding is everything in crypto – first impression has never mattered the most since blind dating days. Especially with scams being louder than the success of some ICOs, you want to be careful here.
When engaging a designer, you should already know what you want and direct the designer accordingly. Having no experience in design is no excuse. Reach out to an advisor or a friend who has an eye for good typography, composition and colour palettes. Otherwise, do your own research. A quick search on pinterest with the words ‘blockchain designs’ will get you a list of layouts and beautiful mood boards you never knew you needed. Well, good artists copy; great artists steal. By ‘steal’, I mean to make the idea yours. Turn something that exists into something that’s even better than what’s existed.
3. Tech and security
Please, and I repeat, please do not save on engaging external security teams and measures. We’ve heard a lot about hacks in the crypto scene but they actually usually take place on the browser or application layer. Make sure you have a strong tech and security team to ensure your website (especially if it’s hosting its own token sale) and platforms are secure.
4. Engaging community managers
The interactivity and size of your community sets the impression for both your institutional and retail investors. For institutional investors looking for returns, it hints at a possible trading volume once your token is listed on an exchange. For retail investors, they care about mass adoption and utility of your tokens. The community will be a gauge of the project’s appeal to the masses. To cater to a large community, you need active community managers who can engage with your users as well as carry out any crisis management when necessary at all times.
A 24-hour management across your channels is highly recommended. An average community manager charges from US$2,500 per month with an 8-hour shift, depending on where he or is located in.
5. Using a good electronic mail provider
Having weekly updates on your project is extremely crucial for both investor relations and community engagement. For crypto projects, most of the time during your pre-ICO and ICO phase, you will not have any product or service updates as you’ll be busy with your fundraising efforts. This is exactly the time you have to keep your community and any existing investors updated to make sure that they are aware of your constant efforts on pushing your project further.
Even if it is just an investors’ dinner you’re hosting for the week, or a discussion for a potential collaboration and partnership, it is still worthy of an update. Your emails may cost you more as your list of subscription increases but this is one of the necessities you should not scrimp and save on. You want to make sure that your Electronic Direct Mail (EDM) provider has a good platform and user interface (UI) for you to customise your newsletters and most importantly, it should allow crypto content (note: Mailchimp banned crypto and ICO content).