January 4, 2023
Within inherent anonymity and armed only with Web2 tools, Web3 marketers are expected to entice, track, convert and acquire new users, in addition to keeping existing users consistently engaged. Evolving from “blockchain enthusiast” to “Web3 marketing enthusiast”, Dr. Asaf Nadler, Chief Scientist at Addressable, outlines the challenges of meeting Web3 marketing KPIs in 2023. This blog will walk you through how you can rise to each of the 7 Web3 marketing challenges including conversion tracking, targeting, reducing CPA and extending LTV to meet your Web3 marketing KPIs this year.
Dr. Asaf Nadler
COO

Welcome to 2023, a bear market year, placing all marketers (not just Web3 marketers) squarely in the hot seat. 

In the 2018-2020 bull market, even feeble marketing efforts often resulted in top performing sales. The 2022-2023 bear market, however, changes things. This year, marketers are expected to meet or exceed their KPIs in a difficult market. What this means for all marketers: There is more pressure than ever to meet your KPIs.

I looked and listened, and I hear you: the challenges Web3 marketers face

Confession: I was and still am a “blockchain enthusiast”. The type who lives, eats, breathes and functions on-chain, both theoretically and practically. But I embrace that “most people” are not me. And “most people” (standard users, those who have perhaps dabbled in owning tokens but firmly reside on mainstream social channels) are where Web3 marketers need to aim their efforts in order to hit their 2023 KPIs. I wasn’t originally a Web3 marketer or a Web 3 marketing enthusiast, but organically, that’s what I’ve become.

Since I live and work in the Web3 space, I spend a ridiculous amount of time there and have actively researched Web3 marketing pain points (it’s an occupational hazard; I’m actually interested in the gap between what Web3 marketers are expected to do, and what they’re able to accomplish given their current toolset). Therefore, in addition to being a “blockchain enthusiast” I also identify as a techie-turned-Web3-marketing-enthusiast.  

Here’s what I hear from “John”, the well-educated, well-versed Web3 marketer. He’s knowledgeable in all contemporary marketing concepts from funnels to conversions to sponsored targeting to analytics, and he met all his KPIs when he spearheaded traditional Web2 campaigns for a Web2 company in a Web2 world. 

Like all Web3 marketers, John is new to the Web3 world. He finds himself held accountable to Web3 KPIs, but stuck with Web2 tools. John is committed but frustrated, and I believe I can help.

As I see it, John is staring down the barrel of the following Web3 marketing challenges:

  1. Tracking conversions from off-chain to on-chain activity
  2. Targeting on-chain audiences using off-chain channels and tools
  3. Reducing CPA and acquiring new, targeted users in the face of inherent anonymity
  4. Fostering LTV: measuring, retaining and upselling to existing users
  5. Directly reengaging existing users in the absence of email or phone numbers
  6. Performing comprehensive market research: accessing representative focus groups to test branding and promotional messaging
  7. Ensuring quality engagement and producing brand ambassadors

John wants to achieve, and he can. Below we’ll discuss five methods to bridging the gap between Web2 marketing and Web3 marketing - here’s how you exceed those Web3 marketing KPIs.

#1: Go all the way: conversion tracking from social to on-chain activity

Challenges: 

  • Conversion tracking from off-chain to on-chain activity
  • On-chain audience targeting using off-chain channels and tools

The conversion process for Web3 businesses involves transitioning from off-chain user engagement, such as social media interactions or website registrations, to on-chain activity like purchasing tokens or participating in a protocol. 

As a savvy Web3 marketer, it’s critical that the effectiveness of each step in your conversion funnel is transparent, so you can not only document but improve the overall conversion rate. Pinpointing the success rate of each step, like potentially ineffective messaging on social media at the top of the funnel, or friction at the bottom of the funnel preventing customers from completing their purchases, is required.

As you know, in a Web2 world, cookies are used to track user actions and measure the effectiveness of each step in the conversion funnel. However, in the Web3 environment, cookies don’t exist for on-chain event measurement or social media engagement, making it challenging for marketers to analyze, report on and improve their conversion funnel.

Challenge accepted: With Addressable, Web3 marketers select their on-chain audiences (wallets) and target their counterpart audiences in various social media channels. The relationship between the targeted wallet and the social media campaigns enables Addressable to monitor performance all across the conversion funnel.

Here’s how Addressable would work for John, who wants to track conversions from Twitter through on-chain activity:

  1. Within Addressable, John selects an on-chain audience to target on Twitter
  2. John’s off-chain Twitter campaign translates into views, clicks and engagements that are tracked in the Addressable platform.
  3. Whenever each of the wallets makes a purchase on-chain, Addressable tracks these events as well. 
  4. Ultimately, John learns each joint campaign’s effectiveness, starting from the social media campaign effectiveness (cost per click) and all the way to token purchases (cost per action).

John tracks the full conversion process from off-chain to on-chain, which, given his complete data, allows him to improve it. His bosses marvel at his effectiveness.

#2: Get the data and go big: acquire targeted new users at scale

Challenges:

  • Reducing CPA 
  • Acquiring new users in the face of inherent anonymity

With the ability to view the entire conversion funnel, Web3 marketers can now identify and scale effective strategies to acquire new customers - even “standard users”. To do this, marketers may experiment with different messaging techniques, such as various types of content or media creatives, and different target audiences. By measuring the cost per action (CPA) – the amount of marketing dollars invested for a token purchase – Web3 marketers can determine the effectiveness of each message-audience combination. Clearly, the lower your CPA, the better.

Challenge accepted: Addressable reduces CPA by positioning Web3 marketers to target audiences that are more likely to buy. Since Addressable provides the most comprehensive source of Web3 audiences, Web3 marketers can expand their targeted reach beyond their organic marketing bubble, capturing new business and expanding their customer base at scale.

#3: Chase them: nurture your existing community before it drifts away

Challenge:

  • Fostering LTV: measuring, retaining and upselling to existing users
  • Directly reengaging existing users in the absence of email or phone numbers 

Since it costs 7x as much to acquire a new user than it is to retain an existing one, it’s always a smart move to pay close attention to your existing user base. But in a Web3 world, MailChimp is not going to help you. 

In Web2 marketing, the existing audience and community is known, documented and reachable via detailed CRM systems which trigger and feed consistent, relevant promotional campaigns. After collecting email addresses, Web2 marketers can promote and upsell products and services and engage with their community. They can stay “top of mind” and pelt their customers with reminders, cementing faith in the brand and cultivating loyalty.

But John can’t.

In Web3, collecting private means of communication like email addresses and phone numbers are not always welcomed; in fact, the gesture is frowned upon and almost held in contempt. Customers are not interested in revealing their identity or contact information, and therefore Web3 business refrain from asking.

How, then, can he promote his products to his existing customers, staying “top of mind” and constantly reaffirming his community’s faith in the floor price? John has to chase them… indirectly.

If the audience follows the business on social media, then posting messages is a reasonable means of promotion, but the key challenge there is cutting through the noise. Social media, especially Discord and Twitter, can be very intense with users briefing hundreds of messages daily. One post can easily get lost in the crowd.

The standard solution is to reinforce the delivery of those messages through promoted ads, even potentially posting the same message at different times on different days, all in a concerted effort to get the audience to internalize, react to or engage with the message. 

Challenge accepted: With Addressable, Web3 marketers can define their existing audience within the platform, based on token holdings and on-chain activities and communities. They then upload this audience into Twitter, launch a promoted campaign to that audience, and voila - it’s your Web3 newsletter. 

This positions Web3 marketers to select important organic tweets and promote them to existing audiences to increase the chances of the message being delivered and recognized. Delivery reinforcement on noisy social channels is key, and Addressable makes it possible.

#4: Test your messages on representative focus/control groups… before investing big

Challenge:

  • Performing comprehensive market research: accessing representative focus groups to test branding and promotional messaging

Web3 marketers are often tasked with promoting specific, significant offerings like highly anticipated product releases or large conferences. Performing comprehensive market research before committing to messaging on costly billboards is, while part and parcel of a marketer’s day, still challenging in Web3 due to audience anonymity.

Traditionally, marketers conducted research to land on the right messaging before paying for big-ticket advertising mediums by conducting focus groups or A/B testing on control groups, either live or digitally. You know that marketers have to try out several messages and evaluate what resonates best with a selected control group of users, but that proves tough when your users are unidentifiable and therefore inaccessible.

Challenge accepted: With Addressable, marketers can find and select a control group of existing users that represent a sample of their wider audience group - presto - it’s a representative A/B testing group. 

John, our Web3 Marketing Wonder, has a big conference coming up and before he invests his entire advertising budget to promote it, he wisely wants to test out his messaging to see what performs best. In order to run his messaging surveys and A/B tests, John selects his control group (he’s aiming at gamers with high spend) within the Addressable platform. He takes that Addressable-generated audience, uploads it to Twitter or Discord, and launches test campaigns. He then measures rates of engagement (rate of clicks for every 1,000 impressions, etc.) and he’s able to use the data to land on the best message, again hitting his KPIs and earning a big, fat bonus.

#5: Go after the ambassadors where they are: pursue targeted, quality followers and engagements

Challenge:

  • Ensuring quality engagement and producing brand ambassadors

The process of Web3 marketing focuses on building a community in which top fans end up promoting the brand organically, turning themselves into brand ambassadors. If built correctly, this loop process will feed itself.

But there’s a challenge in bootstrapping the process. How do Web3 marketers get the first top fans to follow their social media pages and interact with them, producing that self-sustaining loop?

A common answer to that is paid ads, which is often a go-to to attract new audiences. However, paid ads that target blindly given the anonymity of Web3 – are a recipe for attracting random audiences that will never convert, much less morph into brand ambassadors. 

Challenge accepted: With Addressable, Web3 marketers can launch targeted campaigns that are optimized for attracting new (interested) followers and engagements. Unlike random audiences, Addressable enables marketers to select Web3 users that are likely to become brand ambassadors based on their on-chain and social behavior. 

Summary

At this point, I consume as much information as I can find about Web3 marketing, and I believe that I understand the very real challenges facing the community in 2023. Often, those inside a community are the only ones who can bring about sustainable change. Since I come from blockchain, and have immersed myself in Web3 marketing, I’m in a unique position to offer potential answers to the challenges. If you are interested in learning more about what Addressable can do for Web3 marketers, you can book a demo right here.

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