The “Air-Drop”: Influencer Marketing for the Crypto-Economy
TL;DR- Influence marketing matters, but how you think about influence matters even more. Airdrops can be valuable if they are targeted.
I had never heard of Streamr until I opened up a digital wallet to see that one account was now the proud owner of some of their tokens.
Of course, it made me wonder “ok who are these guys?”
So, I went to check them out.
This post isn’t about them, per se. Though, it is inspired by them. Not because their tech, team, or token is so great or terrible (I’m not making that call here), but because it made me think about another element of Crypto-Marketing.
That is, how Crypto-Marketers engage with “Influencers.”
A Super Brief History of Influencer Marketing
Since celebrity endorsements of products began in earnest in the radio and early TV era, marketers have hoped for the elusive “influencer” who can sway the masses to his product.
Tim Wu’s book, The Attention Merchants nicely covers the beginning of this effect, but with the advent of social media in the 2000s and the hyper-empowered individual that Twitter enabled, that yearning has intensified.
While the single best book I have ever read on Influence is, appropriately enough, called “Influence” by Robert Cialdini, it seems to me that “influencer marketing” is broken down into two camps.
Simply stated, you are in the Malcolm Gladwell “Tipping Point” camp or the Duncan Watts “networks” camp. I’ve blogged about both of these before a fair amount, but let’s go with extreme over-simplification.
Gladwell tends to believe that there is one person who has disproportionate ability to sway your decision-making abilities.
Watts tends to think that you are swayed by a lot of little things that add up, even if you are not aware of them all.
So, how does influence really work?
I don’t know, of course, but I tend to think there’s something in the middle, though I lean to Watts’ side.
I see two elements to “Influence.”
The “reach” part is the surface.
It is what we see. It’s Kim Kardashian and Kanye West. They have numbers. We can call them “Awareness Influencers”
But do they have credibility?
For example, if Floyd Mayweather endorses an ICO (oh wait, he did), that doesn’t mean I am going to buy it.
On the other hand, if my wife tells me to shave the goatee I was experimenting with, she has credibility and gravitas, so I do it. (Some would argue she has authority, but that’s a post for another day).
Slightly higher up the ladder are people in your network who are the experts for _____.
The way to identify those people is to ask yourself, “if someone I know has a question about X, then I send them to person Y.”
Solving for X and Y tells you who has influence in your network for a given topic.
I have a friend, Dan who is world-class about coffee knowledge. For health insurance, it’s my cousin, Lee. For financial planning, talk to Josh. They have credibility, but limited reach.
Let’s call them “Perception Influencers.”
Then, there are the rare exceptions of people who have both reach AND credibility.
Let’s call them the “Power Influencers.”
Within the tech industry, I would say that Fred Wilson is one of those people. For example, Fred blogged about Bitcoin back in 2012 and that post alone was all I needed to make my first purchase (like everyone else, I didn’t buy enough — a second post for another day).
Balancing Reach + Credibility in Influencer Marketing
Reach is tempting because its impact is immediately seen and felt. Your website is inundated. Your inbox is flooded. The endorphin high is enormous. I’ve had a few of these moments and it feels great.
But like chasing a drug high (not that I do that), I’m not sure it’s the best use of resources.
Better, I think, is to play the “long-game” and earn the respect of people who have credibility/gravitas in their networks. That is, the people who are the “Y” for the “X” equation above.
Those are the Watts people. The “Perception Influencers.”
The challenge, of course, is helping the “Watts” people become aware of your product or service.
Which begs the question: where do the “Watts” people get their news?
There are a few possible answers:
- Kim Kardashian and the “Awareness Influencers”
- Dan or Josh and other “Perception Influencers”
- Fred Wilson and the “Power Influencers.”
By now, it should be obvious that the answer is “all three.”
That doesn’t help you, does it?
Ah, but it does, because where do you think the “Power Influencers” get their insights? They get it from the “Watts” people in their own network.
Try to get on Fred Wilson’s blog by sending Fred an email directly and you’re not likely to meet with much success.
But, if someone whom Fred trusts and admires sends him a note that says “hey, you may want to check X out,” it’s more likely he’ll pay attention to it…which increases your odds of getting the “Power Influencer” rush.
So, when I think about Influencer Marketing, I would advise that you spend time roughly as follows:
- 80% on identifying and cultivating the “Perception Influencers”
- 10% of the time on the “Power Influencers”
- 10% on the “Awareness Influencers.”
It’s not as sexy and it is hard work, but I think it pays off in the end. The “Perception Influencers” are going to be far more valuable for you because of the respect command.
It’s also more likely that you’ll get connected to a Power Influencer, increasing the ROI on your efforts dramatically.
Make no mistake about it. Influence matters A LOT. It’s just that different types of influence matter in very different ways.
The Token AirDrop as Crypto-Influencer Marketing…version 1
Which brings me all the way back to Streamr’s effort and the new institution of “Token Air Drops.”
As you know, one of the biggest challenges in the crypto-economy, particularly in a crowded ICO/TGE market, is to get awareness of your project.
Without that, it’s really difficult to secure the funding you need to build the product (even if you are only going for relatively modest funding levels).
It’s also a big challenge to get enough early network participants so you can kick off the positive network effects that a crypto-economy requires for long-term sustainability.
Enter the “air drop.” It’s a relatively recent phenomenon of scanning the blockchain for addresses that hold a certain amount of ether and just “gifting” a crypto-token to them.
In one fell swoop, you’ve basically given everyone notice that you’re around. Great.
Until everyone else starts doing it and we’re back to the signal:noise problem of the current market.
In addition, you risk hurting yourself by giving people a bunch of tokens for a project they don’t know or care about and may not even take the time to learn about. So, what’s the first thing they will do as soon as they get the chance?
Sell them, which creates downward pressure on your token and you end up tanking the price, leading more people to panic sell and possibly hurting the project even before it gets off the ground.
That’s not a guarantee, of course. It’s a possibility and the marketing ROI of an “air drop” includes things like:
- Value of tokens that are airdropped (opportunity cost)
- Risk of tokens being sold (and in what quantity) by people who don’t care
- Benefit that airdrop will drive additional token purchases (once I get Streamr, for example, I may actually look at the site and say “wow, I like these guys, I want to buy more”
Ultimately, I think we are going to develop a set of marketing tools (probably AI-driven) that will not just scan the blockchain but look for data that tells us which addresses are owned by which kind of Influencers.
It will be particularly interesting to see it happen given the anonymous/pseudonymous nature of the technology
After all, if you are going to “air drop” tokens to crypto-wallets, you want to feel confident that it’s going to achieve the desired results of raising awareness of your project and build long-term sustainable interest in your project.
We’ll probably see someone offering “Air Drop ROI Calculators based on Blockchain-Marketing-AI technology” in the not too distant future.
BTW, if you really want to dig into this, you should sign up to read Joel’s book when it comes out. He’s done a lot of deep thinking about this topic.