The New Rules of Marketing an ICO
by Anne Szustek Talbot, director of content at BX3
Ah, summer 2013: When Daft Punk’s “Get Lucky” was dominating the airwaves and, other than coverage of a then-sparkling new investment vehicle called MasterCoin, the term “ICO” was merely a typo in financial news articles.
Five years later, Daft Punk hasn’t since released another album and ICOs have evolved beyond a one-time headline. They have become a cultural touchstone. And they have made a name for themselves beyond their three-letter abbreviation. Bloomberg reported on August 2 that during the first six months of 2018, ICOs raised a record $7 billion. Now that ICOs are winning, it’s time to change the game plan.
A couple of years ago, a typical ICO marketing strategy would have centered around gathering a large following on Telegram. A social media ad campaign with online community management would have been the extent of building the story around a new offering, with perhaps a sort of ragtag roadshow hitting up various conferences to help put a face to a name. For an ICO to take such a tack now would be amateur hour at best; dwindle investor confidence at worst.
“I would advise the team behind an upcoming ICO to have a heavier reliance on public relations: getting their story out there and telling it to the crowd you want to tell it to,” says Kyle Asman, co-founder of blockchain/cryptocurrency consultancy Bx3 and many times veteran of ICOs.
In other words, ICOs have evolved beyond an investment vehicle created in someone’s apartment. Accordingly, the corresponding communications strategy should expand beyond a similar DIY-from-your-bedroom approach. Yet, considering that many cryptocurrency devotees essentially live in online forums, how to broaden the message may seem befuddling. This is where a PR/marketing professional can step in and provide the proper guidance.
“Blockchain presents a great opportunity for traditional marketers to step in to do effective storytelling and design thoughtful campaigns,” says Kelcey Gosserand, a longtime communications professional and founder of Trellis, a platform that seeks to build the world’s largest community of blockchain professionals. While knowledge of blockchain is certainly important to gaining traction and respect among sector peers, “there is so much more involved to get a project off the ground in terms of a sophisticated media and public relations strategy.”
For many people in 2018, blockchain and cryptocurrency remain buzzy terms at best, residing somewhere in the popular consciousness as things that are “the future” and “good to know about,” yet are not actually able to describe how these technologies work beyond “something like Internet.” Yet within the past year or two, even seasoned cryptocurrency aficionados may have fallen prey to the zeitgeist, getting caught up in the rising wave of assets and wealth in the sector. Or, as Gosserand describes it, another of-the-moment term: FOMO.
For those blockchain projects run by excitement rather than a reasoned business plan, marketing often tends to be an afterthought. This, says Gosserand, can be detrimental to an ICO’s consistent success. Not having a clear strategy about communications from a project’s inception can mean having to backpedal on messaging about its key goals and milestones — if not worse. Thirst for the next big thing — or perhaps more accurately, the money therein — can leave key investors and other industry players unable to separate clear messages from the noise; clear messages being star projects and the noise being bad actors looking to capitalize on…yes, FOMO.
In the current crypto landscape, the investor base has matured, therefore, so should an ICO marketing strategy. Accordingly, the typical marketing plan should broaden and focus on a more traditional marketing mix, with a slant towards storytelling and earned media in the beginning stages.
“Leveraging a traditional marketing mix of paid, earned, social and owned media is the best way to get your company’s messages and value propositions to your key audiences,” says Carol Lin Vieira, VP Corporate Marketing and Public Relations for Bx3. “At the heart of it all is the ability to tell your story in a compelling manner, and connect with the influencers and media who can help amplify your message so it captures the attention of investors, industry, and end users.”
Moreover, the ever-evolving regulatory environment about blockchain makes a strategic approach to communications all the more crucial. According to Gosserand, blockchain professionals should consider marketing as one peg of a three-legged stool, along with technical knowledge and legal counsel.
While blockchain professionals tend to have plenty enough tech savvy to hold up that end of the project, the ever-changing regulatory environment around ICOs means that without the two other sides of the equation, the team behind a project might inadvertently put its foot in its collective mouth. In some instances, regulation has even removed that obstacle. As for the aforementioned social media publicity-as-strategy, in January 2018, Facebook banned advertising for cryptocurrencies and ICOs, with a spokesperson citing projects “that are not currently operating in good faith” as the rationale.
Other times, the communications side may need to rely on the legal peg to advise on specific language. Gosserand describes a time when she was working with a client whose legal team was convinced they were working with a different utility. These sorts of internal disconnects are only going to complicate external messaging, defeating the whole point of publicizing an IPO.
So how can viable ICOs keep themselves above the riffraff? “Blockchain has the reputation of being the Wild West,” says Asman. “Anything went and anything goes.” As the market has matured, so do new launches’ public and investor relations. The first step, Asman and Gosserand agree, is to identify the targets. Often, but not always, these are high-profile investors of venture capital fund caliber, if not outright. “The key to success for most of the big ICOs has been getting the Tim Drapers and Michael Terpins on board,” says Asman, “as well as those so-called ‘strategic partners’ whose presence will get the attention of other funds.” Any pitch decks should be tailored to this market; media pitches to the publications that this community reads and respects. Once a project is successful, then communication needs to profile and highlight the milestones the organization has achieved. From an investor relations standpoint, getting out there and doing a roadshow should be on the docket.
“If you’re launching an ICO, likely you’re a high-net-worth investor yourself, and the venture capital fund you want to attract isn’t looking for their investment opportunities on Facebook,” says Asman. Gosserand concurs. “If your marketing strategy is posting things on Telegram and Reddit, that’s not really a strategy. That’s a tactic.”
Or, in the words of Daft Punk, your ICO doesn’t have much of a plan besides being “out to get lucky.”