CRYPTO MARKETING: AN ALL YOU NEED TO KNOW GUIDE

Crypto Marketing: All you need to know

Somewhat encompassing the Wild West right now, ‘crypto’ has become a word tainted with scandal, from young billionaires’ illegal antics to scrutiny from law enforcement across the globe. Love it or hate it, many multi-billion dollar companies have taken their first steps in the space in a bid to take advantage of a new market with creative crypto marketing campaigns.

So, what is crypto marketing, and is it worth paying attention to?

What is crypto?

Crypto, short for cryptocurrency, was initially popularised by Bitcoin, with the aim of providing people with a borderless method of transacting without intermediaries such as banks. Since then, the underlying technology known as ‘blockchain’ has been used to develop other cryptocurrencies with a variety of uses.

The blockchain is simply a digital ledger of transactions which is verified by computers in a ‘decentralised’ network. To elaborate, the transaction history from every wallet is public and one cannot override the system without getting the majority of validators to comply, which is impossible given the number of validators on major blockchains.

What is crypto marketing?

Defining crypto marketing is challenging given the infancy of the concept, but to broadly define it, crypto marketing is promoting and selling products or services related to a crypto business. This can be for many reasons including building brand awareness, gaining customers and increasing sales and revenue. This differs from traditional marketing in a few ways, with a heightened focus on community and increasingly complex technology and terminology.

What are examples of successful crypto marketing campaigns?

Many major brands have attempted to take on crypto marketing, with some more successful than others. Let’s start by taking a look at some of the ‘successful’ campaigns.

Budweiser

Budweiser were early to the game, launching their crypto marketing campaign by purchasing the Ethereum Naming Service (ENS) name beer.eth for 30 Ethereum ($95,000 at the time) in 2021. This created a huge splash in the space, and Budweiser capitalised on the marketing move by using the ENS name as their social media tag while also launching their own range of merchandise featuring the ENS name. This included baseball caps, shirts and even limited edition beer…

It’s unknown the exact financial benefits Budweiser enjoyed from this move, however, one thing is certain, it gained a great deal of media attention and attracted Budweiser’s key target market (men aged 21-27), building and enhancing the brand’s reputation.

NIKE

Nike took a different approach to their crypto marketing strategy, acquiring a crypto-based studio called RTFKT for around $100,000,000 in 2021. Since then, they have generated the most revenue of any big brands’ crypto initiative, with $185,000,000 in revenue as of 2022, according to Vogue Business. They achieved this success by fostering a close online community and building hype around drops, with some of their NFTs fetching several million dollars at their peak and even featuring in a Sotheby’s auction. In total, trading volume has surpassed $1.3 billion, a mind-blowing number by any measure for virtual goods.

The financial benefits to Nike’s move are clear, and they have gone as far as creating virtual worlds with celebrities like LeBron James to teach basketball lessons. It’s clear utilising a company already prominent in the space gave them an edge in understanding the market and they capitalised effectively.

Tiffany & Co.

Tiffany & Co., the high-end jewellers, also chose to partner with a crypto-native brand to make their splash in the space (Cryptopunks, an NFT project). Their initial offering was to transform one’s ‘Cryptopunk’ into a physical necklace, customised for each NFT and featuring expensive gemstones including diamonds. They charged 30 Ethereum ($50,000 at the time) for this service, with the necklaces also trading on secondary marketplaces.

While their approach is far more niche, it appeals to their target market of wealthy clientele, because in order to purchase this NFT not only did you need a Cryptopunk (valued at $105,000 minimum) but also a spare 30 Ethereum to spend. It’s hard to quantify the benefit financially or tangibly without knowing their production and raw material costs, but the campaign sold out and generated over $12,000,000 in revenue for the company.

What do successful crypto marketing campaigns have in common?

• Community
• Ethereum/ENS
• Creativity

Firstly, community is the main recurring theme in this space, where hype is built and attention is attracted. Loyal communities provide a good source of revenue for traditional companies and can even expand their customer base as is the case with Tiffany appealing to the crypto elite. Customers in the community even stand to financially benefit should their project take off, providing an incentive for people to participate. Equally, not paying enough attention to the community’s needs can be the downfall for crypto marketing strategies and can do irreversible harm in a space where everything is recorded; there is no covering up mistakes on the blockchain.

Secondly, most brands have opted for the most popular chain, Ethereum, to launch their crypto marketing campaigns. This comes with some drawbacks such as expensive gas fees (network fee), but regardless it is the predominantly used chain for both users and mainstream brands, so it may be wise to also choose this chain for one’s own crypto marketing campaign. ENS names are native to the Ethereum blockchain, and to explain their purpose simply, they are the equivalent of using .com domains instead of using IP addresses to visit each website. ENS is instead for transferring money to a .eth address (e.g. beer.eth) instead of a 25 character wallet address. Purchasing one related to your brand signals to the community that you understand the technology and builds trust. Another good example of successful implementation of this is Gucci, who purchased their ENS name and are now accepting crypto payments in all of their stores in America.

Takeaway thoughts

What can we take away from the new terrain that is crypto marketing?
It’s important to remember that cryptocurrency can be a shady business with many bad actors, with staying safe and securing your wallet being the top priorities for individuals and companies alike. There is also room for crypto to fall a further 99% and in this new industry you can never be certain of its success, so don’t overinvest or take any risks which are significant. It is also hard to quantify exactly how much brands are benefitting from their moves in the space, with many seeming like cash grabs and stunts rather than prolonged marketing campaigns.

Aside from the potential downfalls, brands can stand to benefit by understanding the technology and appealing to their target audience with these crypto marketing campaigns to improve their brand reputation and also drive revenues in an increasingly virtual world. Understanding how to best appeal to your target market in the space is crucial, so don’t go in aimlessly to make cash but with a clear marketing plan in place where the potential benefits are clear.

Overall, the future looks uncertain for crypto marketing with many brands withdrawing their interest since the negative turn in the market. However, when brands like Nike are successfully pulling in and investing hundreds of millions of dollars, it is clear that their intentions are ambitious over a long timeframe and it will be curious to see how this develops, and what other mainstream brands get involved.