As one of the fastest moving areas of study, marketers of the 21st century need to learn new marketing tool sets actively. The exponential evolution of Martech over the past decade has given CMOs access to more data than ever before, and the tools to uncover the growth opportunities that exist within their organizations. Blockchain-based marketing technology is about to add another level of data that marketing leaders can use. An entirely new set of business fundamentals will become part of the equation.
On one hand, industry leaders will have an opportunity to tap into the global network of cross-industry and cross-country personal data. On the other hand, with the burgeoning possibilities of token economies, companies can now build community-powered marketing and adoption campaigns based on token incentives. Blockchain makes it possible by allocating pools of tokens to fuel community-based initiatives.
First and foremost, what is Blockchain? In its simplest form, blockchain is the term given to the backend technology that allows digital information to be distributed but not copied. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. This means someone can send any piece of data to someone else and the entire network publicly acknowledges that this transaction has been done. These transactions may be in the form of digital money (i.e. cryptocurrencies), identity authentication & licensing (i.e. identification protocols), or realistically anything else that provides value.
While we won’t go into the nitty-gritty details of the technology, what is important to understand is that in comparison to the first wave of the internet, known as the Internet of Communication, blockchain technology allows for the next wave of the internet to occur, known as the Internet of Value. One that provides capabilities never before seen, especially for marketers and financiers. For more information about the technological aspect of blockchains, this article by BlockGeeks is a resourceful starting point.
As an entrepreneur or the head of marketing in your team, department or company, one of the most important skills is your ability to stay up to date and proactively implement marketing strategies before any of your competitors do. Before delving deeper into specific use cases of token-based marketing, let’s look at a few higher-level trends. If interested in researching this further, NeverStopMarketing’s Blockchain Marketing Technology Landscape Report is a great starting point.
Getting The Exact Stories of Each Consumer - Realtime Tracking
At the moment most omni-channel service technologies gather their information from major centralized sources of data, such as ad publishers including Google and Facebook. However, we are quickly approaching a world where the data of every transaction, search and activity of an individual is readily available to a consumer and becomes that consumer’s right to share it with any company he or she desires to.
The Martech Stack’s Blockchain & The Future of Martech report offers insightful trends on this upcoming marketing landscape, outlining how the current advertising model will evolve.
Paying Viewers & Content Creators Directly
Content Platforms - Community-based social media platforms like Uptrennd and Steemit share most of their ad revenue directly with the content producers, giving way for content producers to be paid directly in accordance with the amount of upvotes or downvotes they receive from their readers. This differs from existing platforms because it allows for social media and content creators to be paid directly, making it a peer-to-peer model. To simplify the concept, let’s take an existing platform like Reddit and imagine a scenario whereby every time a contributor posts content, they immediately receive a stipend of Reddit’s revenue proportional to the amount of upvotes, downvotes, comments and views that post receives. This paves the way to an entirely new field of influencer marketing and content marketing.
Ad-Free Browsers - Browsers like Brave, which block all ads automatically, give the opportunity for its users to earn money directly by turning on ads and giving their attention.
Currently, there are over 20 million downloads and 5.5 million daily actives, meaning this is still in its infancy and offers first mover advantage to anyone who tests ads through their platform.
Proof Of View - Invesp reports that as much as 56% of all web traffic is fraudulent bot traffic. Solutions such as Verasity’s Vera Player offer an opportunity for advertising to companies they pay only real people after viewing an advertisement.
There are many other trends that are enabled by blockchain technology. For more information, Accenture’s report Blockchain in media: More than a one-hit wonder is a great go-to resource.
Using Tokens As a Marketing & Loyalty Tool
There are many ways in which tokens are currently being used to build awareness and loyalty for certain projects. At the moment, these marketing initiatives are used primarily by projects that are directly working in the blockchain and cryptocurrency space. Nevertheless, as larger companies jump into the space, such as Facebook which recently announced the launch of its own cryptocurrency, it will become normal for companies to allow for its consumers to pay in various tokens, including those of the partners within their networks.
Here are a few examples of use cases already happening within the blockchain industry, most of which could easily transfer into any other industry that involves B2C interactions.
Smartdrops – Platforms such as TRM Labs and Refereum offer individuals the ability to create and distribute their own tokens, in return for people doing specific tasks. These can include sharing, tweeting, re-tweeting, commenting, filling out a survey, joining a beta list and hundreds of other tasks. You can see this as another method of payment that at the same time makes ambassadors even more apt to recommend the project.
Bounty Campaigns - Companies like BountyHive and BountyGuru have specialized in an entirely new field of brand ambassador marketing. They run bounty campaigns to get between 1000-5000 virtual ambassadors (aka 'Bounty Hunters') around the world that will do specific actions for stakes (ie. a percentage of a total pool of tokens allocated for bounties). The amount of stakes you can get varies depending on the difficulty of a task and the time it took to complete it. Disclaimer: This type of campaign implies a lot of legal risk depending on the countries in which they are run. Please seek advice from securities lawyers before engaging in this type of campaign.
Advisor & Influencer Incentive Payments – Rather than paying advisors and influencers with fiat dollars, paying them in tokens and locking these until certain KPIs are met ensures that incentives are aligned between the network and the ambassadors of the network.
Disclaimer: Consult with your legal counsel to ensure that your advisory agreements are compliant with the jurisdictions in which you operate.
Directly Increase Conversion Rates – Average conversion rates from digital marketing campaigns that have a call to action involving token incentives are on average 8 to 15 times higher than those that don’t. That’s the difference between a 25 cent CTA and a $2.50 CTA!
Disclaimer: Unless it is a legally proven utility token, this can only be done in select jurisdictions that do not have securities laws that prevent distribution to public investors.
Enabling Local Events Across The Globe – In your existing social communities, there will often be multiple members in your community that live and breathe your project. These are your brand ambassadors; they are your super fans. However, the bond is unlike anything we’ve seen in history, since often these brand ambassadors will also own a stake in your project, in the form of tokens. You can empower these ambassadors by giving them ways to set up events in their regions and pay those who show an interest in tokens.
Hackathon Prizes – One of the best ways to discover young developer talent and to have them interact with your platform is to run hackathons. These can happen in partnership with world leading universities or with prominent associations. This is one of the better ways of proactively attracting new talent in our day and age.
Activation Events – You can set up events to have people interact with your brand in many manners and places. Festivals, conferences, meetups, you name it. Experiential marketing just added another tool to its ever-growing arsenal. Geon is a great example of a geo-marketing tool to add in the 2020 marketing toolkit.
Loyalty Programs – The same way you can use Airmiles, Banking Credit Points, Canadian Tire money, or BarterPay dollars to redeem value from previous actions taken, you can also do the same with a token network. Companies like Phaze, now allow for major companies like Air Canada and Starbucks to redeem tokens into coupons immediately and without friction. Other methods of using tokens include offering discounts on your platform if people pay using your utility token, or creating partnerships with existing businesses to speed up the adoption of your platform.
This is not an exhaustive list as the number of applications continues to grow month by month.
How Do We Measure Campaigns Like These?
As token-based marketing efforts become a measurable reality, the importance of having a way to measure the cost effectiveness of these new types of campaigns will become clear. The above examples are some of the first use cases that involve the necessity Token Return on Investment (TROI).
TROI is the measure of direct and indirect value derived from an allocated amount of tokens used to achieve a specific goal.
This new method of measuring marketing campaigns that use tokens is still in the research phase and will enable an entirely new field of expertise within the marketing and Martech umbrellas.
A Traditional Case Study: Paypal
There are only a few public case studies of companies that have used cash-based marketing campaigns to fuel growth. Here is one worth mentioning.
Paypal was one of the first companies ever to give away hard cash for free, and to make a positive MROI by doing so. For the first few years, Paypal gave away $10 to anyone who joined the service and an additional sum for every referral. This was the primary way to ensure enough people would join the platform, creating the network effects for a global online payment platform.
Companies can now offer similar incentives without eating into their cash-based marketing budgets, offering an entire new dimension to marketing campaigns.
We Are at an Inflection Point
Because all these strategies are so new, none have ever been measured using established token return on investment models. Nevertheless, they are the first use cases that prove the validity and importance of making token distribution an integral part of your blockchain growth strategies.