IEO Marketing Guide: Optimal Strategies and the True Cost to Launch an IEO in 2019

What does the IEO launch process look like?

It’s been awhile since the ICO hype ended, and the market has since transformed to accommodate a new fundraising strategy, the Initial Exchange Offering (IEO). The step away from ICOs and into IEOs was pretty evident. After more than 90% of ICO projects were scams someone needed to start regulating crowdfunding, and exchanges took this upon themselves. For now, many exchanges are actively launching their IEO launchpads and the new wave of crowdfunding is getting its first steps.

Is IEO the next step in the decentralized crowdfunding ecosystem or just another hype and a new way for exchanges to earn massive amounts of revenue on marketing? We’ll see. (There is already initial negative feedback about launching IEOs on tier-2 exchanges, like this).

An IEO is a new way of raising funds — and founders need to research this opportunity for their projects to be readily prepared if IEOs succeed as a fundraising strategy.

In this article I will lay out a plan for those who wish to launch an IEO. This plan is based on my own experience of working in the market since early 2017. It is also based on information from colleagues in crypto marketing agencies and projects who’ve already launched IEOs for their clients.

Approaches to launching an IEO

There are two major strategies to launch an IEO:

Approach 1 — Listing on the Top Exchanges

You’ve been working on your project and are trying to make it attractive to the community. Your goal here is to launch an IEO on the top exchanges like Binance, Okex, Huobi — this will automatically demonstrate to the community that your project is trustworthy.

At this state you will have already needed to have some funds to cover operating and marketing costs for your product, which is why the IEO is just an option for additional funding, not the first funding step.

Here is a useful post from Binanace CEO Changpeng Zhao about how to be listed on Binance. It is important to note that you can’t pay to be listed on this exchange: Binance Listing Tips

The most useful points from the article above shows Binance’s approach to reviewing projects:

“…[We] focus on user adoption. If you have a large number of users, your product has value. That’s the easiest to measure…”

Approach 2 — Bootstrap (Tier-2 exchanges)

The other strategy is that you take your MVP and idea and try to raise starter funds through an IEO. You’ll then use these funds to execute your product creation and implement your marketing strategy.

Let’s be realistic — this way is harder to raise funds, because crypto investors on the market have already learned from the ICO hype and their current fear of losing money is too strong. The situation is such that investors don’t trust anybody.

In this situation, Tier-1 exchanges are closed to you. Instead, you should work with Tier-2 exchanges who are willing to accept money to launch an IEO.

In theory exchanges need to be a trustworthy source for recruiting projects — and top exchanges like Binance truly are.

But in reality most of exchanges from tier-2 just accept money to list projects and there is a huge conflict of interest from the exchanges side. They aren’t validating the IEOs, instead just offering listing to those who have the money to pay the listing cost.

Another important point if you decide to go with the tier-2 approach — you should be ready to pay for a listing AND pay to market your IEO in the community to build trust.

The other trick here is that you are not limited to one exchange and, based on your budget, you can launch an IEO on several exchanges simultaneously — whether that is reasonable or not for your situation can only be decided by you.

No matter which approach you choose you will need to spend a lot of effort and time to build trust with the community and prove that you are not a scammer.

How do crypto investors estimate the value of projects?

Before describing our marketing plan let’s ask active crypto investors how they measure the trust of a project on the market.

There are still misconceptions on the market that in order to receive funds, all you need to do is buy subscribers for your telegram group and send some press-releases to top crypto media. The belief is that this will drive traffic to your beautiful landing page, which in turn leads to -> Profit.

But it’s not true and investors are not stupid — everyone understands which metrics are fabricated and which are real.

To better explain this, I asked many major ICO pool owners and some crypto traders about how they evaluate the crypto projects that they choose to invest in. They were all pretty much the same with their assessment. Let’s review some of the answers here.

Question: What is the most important thing you look at when you select an IEO to invest in, and which sources do you use to monitor the new projects?

“…The number of followers may be very misleading due to bounty campaigns. The same goes for articles. Some hype is genuine, but some hype is fake. We always dig into that when analyzing the hype of the projects. We are constantly monitoring, not only through secondary sources but also primary sources (like startup events, and through our network), so that we can know before anyone else which projects will be the future hypes. Timing is very important for us.” Jvperwitness, Crypto Whales Pool Owner

“…Idea / Team. VCs / Funds who are supporting the project. Hardcap. Initial Circulating Supply.

Seed and private round deals and whether or not huge bonuses / discounts were given

At the time we invest into IEOs (usually private rounds) we don’t really take into account the social aspects, huge community etc. We have seen number of ICOs / IEOs where huge following were there to get only free tokens and later just dump and forget about the project itself. There should be enough traction though and it should not be a ghost town, that’s enough…

We mostly search for the new projects through our VCs / Friends at places who know such projects well before everyone else. Following investment from Funds / VC groups, Pantera, Hash and likes.” Dexter from Crypto Capital

“..transparency and a very active intelligent community around the project. Can be few 100 people in the tg [telegram] but they have to be very smart and actively writing…” Chris, owner of icodog.io and creator of social mining.

“..The most important thing for me is an Exchange where the IEO is launched, and the hardcap. The amount of community members and social networks followers are not important. If the IEO is launched on the exchange like Binance, then any project recruited from Binance will raise the funds in seconds..” Andrey Podolyan, Asset Manager, Crypto Trader. CEO of cryptorg.net

“…followers on telegram is absolutely irrelevant imo [in my opinion]. You can anyway fake this numbers. Tier-1 exchange is something that is very important…As an investors group we get 100 pms everyday, [because of] this we know exactly what is in high demand…” Ken. DACH pool Team member

What should your IEO marketing plan look like?

Let’s go in-depth into what a marketing plan should look like. We will use the second approach — listing on tier-2 exchanges. Because, as I described above, there is not an evident way to launch your IEO on Binance without first receiving Binance’s permission.

Based on the information given these will be the next points in your plan:

Project packaging:

Idea, tokennomics, legal questions, and mvp of the project should be ready. You can do it by yourself or hire consultants to do it for you.

PR & Marketing:

You don’t need to buy followers (and shouldn’t, since it can build distrust with the community), but you need to undertake a traditional PR & Marketing plan to build trust among the community and pitch your project to a public audience.

Budget to pay for listing(s):

Exchanges will charge a high amount to get listed. Also, some exchanges will include marketing activities to their package — but in reality it’s not enough. Because all they offer is a newsletter sent to their database of registered users and a promo post on their social network feeds. Investors understand that you paid for these marketing activities and it’s not enough to build trust. So don’t rely on an exchange’s marketing package. You will need to complete your own marketing if you want to be successful.

Here are the steps you need to execute based on your budget:

IEO budget: From $100,000

With this budget, you can go to the major exchanges (top-10 here: https://coinmarketcap.com/rankings/exchanges/)

• BitForex
• Coineal
• BW

The cost for listing starts at 10 BTC — but you need to negotiate with the exchange’s team or your IEO agency to receive a discount. In most cases you can expect a 10–15% discount.

PR & Marketing:

After you have launched your website with all the documents available to the public, it is a good idea to add your project to all available crypto trackers (the major one: https://icobench.com). Most of the trackers will add you for free (with a PRO option for more coverage available).

Start with major trackers — tier-2 trackers should add you automatically once you are on tier-1 sites. You can hire someone on Upwork or just ask your agency to manage communications with trackers — you should expect the price to be between $900 — $1500.

The next step will be to feature your story on a Tier-1 publication. History has shown that your voice and article focus shouldn’t be about technology (interested investors will view it in-depth in your whitepaper), but more focused on expectations and possibilities: you have a contract with Microsoft or another major company, or you already have an agreement to be listed on major exchanges — this is the good news for potential investors.

With this budget you can expect to be featured on tier-1 crypto websites and publications. Here is the cost for sponsored articles on major crypto websites (these prices may change over time):

• Cointelegraph.com — from $4,500
• Coindesk.com — from $4,500
• Investing.com — from $2,700
• Entrepreneur.com — from $3,700
• Forbes.com — from $5,000

This is for a featured article about your project. You could also buy brand mentions from journalists who are writing in this industry, and it will typically be less expensive. You should expect prices for a brand mention to be up to $1,500 for tier-1 publications.

The other option is press-releases. You just need to find the right angle here (focus on expectations, not technology), and distribute your press-release to all crypto websites (it will help you to receive a lot of republishing from publications on steemit and other community hubs). Here are the prices:

• Ccn.com — from $350
• Newsbtc.com — from $800
• Bitcoin.com — from $1,000
• Forklog.com — from $2,500
• Coinspeaker.com -from $230

If you have a good PR manager in-house who can generate good news and pitch journalist, then it’s possible to receive publication for free.

The last step will be to write a solid, long-form article about your vision and how your technology will disrupt the market. The best place to publish such an article is on a website like hackernoon.com — then just distribute it to Reddit and Quora communities to start a conversation and receive feedback.

The price per article can vary greatly — and you need to find a good writer with a technical background and understanding of blockchain technology to get started.

In 2018 there was a standard industry proportion:

• 1 to 5 (if you need to collect $5 million on your ICO you need to invest $1 million in marketing)
• 10% of your marketing budget should go to PR

For IEO it’s pretty much the same.

IEO Budget: $30,000 — $100,000

With this budget you need to work with medium exchanges (top-20 here: https://coinmarketcap.com/rankings/exchanges/)

• P2PB2B
• Cointiger
• Exrates
• Bittrex
• Probit

The cost for listing starts at 2 BTC — but you need to negotiate with the exchange’s team or your IEO agency to receive a discount. In most cases you can expect a 10–15% discount.

PR & Marketing:

You should be more creative here — invest more in your content and try to find the right angle to get published on bigger networks for free. This won’t be easy, but if you are publishing interesting articles that aren’t just sales pitches you are more likely to get coverage.

I will try to keep an updated list of publication costs here: https://docs.google.com/spreadsheets/d/1h1XPPyhA0vYvv71mrhMvytIvtPylCiwP0r-h6R5hV_U/edit?usp=sharing

The easiest way is to create a plan for publications selected from the list above.

IEO Budget: Less than $30,000 (Bootstrap or DIY approach)

This is the hardest approach for an IEO. You need to be extremely creative and manage a lot of things by yourself.

The highest costs will still go to pay for a listing on exchange — try to pitch the top-20 exchanges. There are a lot of scam in this market and fake trading volumes. I suggest that you don’t work with exchanges from below the top-20 list, since they typically can’t be trusted.

PR & Marketing:

You need to invest in creating long-form pieces which explain your idea and give clear expectations for those who may be buying into your IEO. Update your medium publications often, and be sure to interact with your community.

Working with investors is crucial for your business development — pitch funds and ICO pools to build trust with them.

Community management for ALL stages:

For all stages working with the community is of utmost importance. But you shouldn’t expect to raise all of your funds through crowdfunding alone (especially if you are not a project like EOS). The times when an average crypto investors could receive 10x ROI profit within several months are long past, and investors know this.

The average profit in the IEO market is somewhere between 1.5x-5x and it’s become harder to find good projects to invest in. The approach of just pumping and waiting for an ICO to have a huge ROI is no longer working and investor need to spend more time researching projects before pouring their money in. That’s why a lot of average (not professional), and purely crowdfunded operations are no longer surviving in the market.

The important investors that you should spend your time working with (priority from high to low) are as follows:

• Traditional VC funds
• Crypto Funds
• ICO pools
• Top crypto communities on telegram/discord/wechat
• Traders (you will need them for the post-IEO stage)
• Public (the last step when you already have an agreement from the investors above)

What to do after your IEO:

Everyone seems to think that an IEO is the most important event and that you can relax after it has been completed. But in reality, this couldn’t be further from the truth. Investors will expect a plan for execution and clear steps on how you are going to go to market with your product. In fact, the ending of your IEO is just the start of a new, tougher stage in the success of your business. Now that you have the money, everyone is going to expect you to do what you promised, so get to work!

But the most important factor is to have traders engaged during this stage who will trade your coin/token on an exchange. If you didn’t invest a lot in building a community of day traders for your token — it may be your best option to invest some money to create a desirable market and facilitate authentic trading. Either way, if your coin/token isn’t trading actively on an exchange then you are basically dead in the water.

If you need any help with advancing your IEO, please contact me through telegram @ksshilov

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All materials are for informational purposes only. None of the material should be interpreted as investment advice.