Shifting Financial Marketing into Gear
ICO Marketing: Essentials for a Successful Initial Coin Offering Launch
Crypto assets are on the rise—and are rising fast. In the first six months of 2021, CoinMarketCap added 2,655 new assets to its list. It seems like there’s a new wave of cryptocurrencies on the horizon, and companies that are interested in launching their own initial coin offering (ICO) may have a lot of competition on their hands.
A strong marketing plan is the key to bringing in a large audience and converting consumers into investors.
However, marketing for ICOs and crypto assets isn’t really like a generic, run-of-the-mill marketing campaign. There are regulations to follow and a lot of nuances to try and understand. Here’s what you need to know about preparing for an initial coin offering launch, and how to approach it from a marketing perspective.
What is an Initial Coin Offering?
While many may not be fully aware of the meaning behind an initial coin offering, also known as an ICO, there’s more familiarity with an initial public offering, or IPO. This may help in understanding exactly what an ICO is.
So what is an IPO? An IPO is the process of giving the public access to a private company for the first time. It’s the first offering of shares of a private corporation to the public through a brand new stock issuance. This gives the company a chance to raise funds from investors, while investors can take part in the offering. Based on the carefully determined value of the company, the number and price of each share is set as its initial public offering.
Like an IPO, an initial coin offering is a way for companies to raise money. It’s the cryptocurrency equivalent to an IPO. Companies can use the money earned from an ICO to launch new coins, apps, services, or to raise capital—that’s most often the primary purpose of an ICO. Investors receive a brand new cryptocurrency token in exchange, which may stand for a utility related to the company’s product or service, or it could represent their stake in the company, much like stock shares and IPOs.
Many ICOs call for investors to pay with some kind of cryptocurrency; commonly either Bitcoin or Ethereum. Some also accept fiat money, or legal tender that’s secured by the government that backed it. For the most part, ICOs are unregulated. In the U.S. for example, there are no regulations on ICOs unless they match the definition of a securities offering, which then falls under the jurisdiction of the U.S. Securities and Exchange Commission (SEC).
There are a few ways that ICOs and their token prices can work, and they are either fixed or variable. This means that ICOs can be sold as:
- A set, fixed number of tokens at a set price that does not change based on sales.
- A set number of tokens with a variable price established based on the number of tokens sold.
- A varied number of tokens at a fixed price, with no limit on the number of tokens sold.
Who Invests in ICOs?
Those wondering how to market an ICO should pay close attention to who is buying these cryptocurrencies. Generally, it’s still a small, very specific group of people. Just 19 percent of U.S. survey respondents traded cryptocurrency in the past six months.
S&P Global’s “Market Intelligence” branch recently reported that, “The buying of cryptocurrencies and NFTs, collectively referred to as ‘digital assets,’ is dominated by millennial men, video gamers, sports bettors, and college graduates residing in households earning more than $99,999.”
In fact, digital asset traders participate in sports betting higher than other demographics. While only 20 percent of those surveyed bet on live sporting events in the past 60 days, this figure soared for digital asset buyers, 62 percent of whom bet on a live sports game. As the S&P Global shared, “The notorious volatility associated with digital asset trading probably fits well with the risk profiles needed to place bets on sports. Overall, keeping an open mind is key for anyone wishing to learn more about this burgeoning new asset class.”
Essentially, there are two types of investors in ICOs:
- Private investors: Small investors who hear about cryptocurrencies and want to make a profit. They research their options, hear about ICOs, and start investing during the early stages of development.
- Institutional investors: These are investors like crypto hedge funds, financial institutions, financial retailers, and other businesses.
For an ICO to be truly successful, it is important to gear marketing efforts to both groups.
What Sets ICO Marketing Apart?
Marketing for an initial coin offering is different compared to other kinds of marketing—even from other financial marketing.
According to the SEC, “Market participants should use caution when promoting or touting the offer and sale of coins without first determining whether the securities laws apply to those actions.” The regulatory agency continued to say, “Similarly, those who operate systems and platforms that effect or facilitate transactions in these products should be aware that they may be operating unregistered exchanges or broker-dealers that are in violation of the Securities Exchange Act of 1934.”
Essentially, the SEC views those who market ICOs as gatekeepers, who are looking to protect the interests of investors. Like securities lawyers, accountants, and financial consultants, ICO marketers should be “guided by” process disclosure requirements to protect investors large and small.
As business publisher Forbes shared, the SEC ruled that many digital coins are indeed securities, which means they must meet the marketing requirements that surround securities. A securities lawyer can help navigate the intricacies of securities law, but generally, companies planning campaigns for an initial coin offering should take heed of SEC requirements and regulations.
When it comes to ICO marketing, it’s important to know that ICO fraud is very real, which is why there are restrictions on what ICO marketing campaigns can say. Between January 2016 and August 2019, ICOs raised $13 billion. However, in one 2018 report, out of approximately 1,500 ICOS, 78 percent were identified as scams, accounting for $1.3 billion.
Companies embarking on an ICO marketing campaign should be aware that many consumers are intrigued by cryptocurrencies, but because of this high rate of fraud, they are also very wary. An ICO campaign must not only adhere to SEC compliance, but also keep in mind consumer skepticism.
How to Market an ICO: The Essentials
Cryptocurrency and ICOs have gone mainstream. In fact, between 2012 and April 2022, Bitcoin grew by 208,900%. What’s more, companies holding an ICO want to reach as many potential investors as possible and bring more leads in for the sale event. The growing popularity of cryptocurrency has led to a lot of competition in this market. For an ICO to be successful, it will be essential to align several digital marketing efforts as part of the launch strategy.
Here’s a list of ten tools every company planning an ICO should plan to have.
- The Brand: Your Logo and Website
Marketing is a crucial part of helping an ICO reach the largest possible target audience to drive success. Investors won’t buy into an ICO without knowing about it. A carefully-crafted logo and a professional website are the online business card-meets-conversion-tool that every company needs before embarking on their ICO digital marketing journey. As Chainfuel shared, “the core function of your ICO website is to convince investors of your project’s value.”
It takes consumers about 0.05 seconds (that’s 50 milliseconds) to form an opinion about a website. One that is sleek, modern, easy to navigate, informative, and clear in its messaging and calls to action establishes credibility and can be a company’s biggest asset in a successful ICO. An undeniably powerful element of this website is its logo, which adds to brand recognition and helps consumers know what to think and feel about a company ahead of their ICO.
- The Whitepaper (And a Clear Roadmap)
A thorough, well-researched whitepaper can add credibility and help investors make an informed decision. Companies should think of this as an educational tool that can help potential ICO buyers understand how the whole project will come together. It should address key points like:
- What problems the company will solve for clients or customers
- How the company will go about solving that problem
- The likelihood that this company will succeed at solving the problem with their project
- What sets this company apart from their competitors
- What the company’s tech architecture is like
- How the company will handle any issues of legality
Above all else, a company’s pre-ICO whitepaper should be relevant, clear, concise, and reader-friendly. It should include a history of where the company has been, but more importantly, it should outline smart, action-oriented goals for the future. Remember: It’s not just an educational tool, it’s a selling point for many investors.
- An Explainer Video
Videos are growing in popularity as a marketing tool. 54% of consumers report that they want to see more video content. For many potential investors, explainer videos are the first real introduction they have to a company, and to their ICO. When adding in the fact that many are still somewhat confused or skeptical about cryptocurrency, a video explaining the concept can help give investors confidence.
A solid, 60- to 90-second explainer video should be thorough enough to outline the finer points, while also being simple enough for regular investors to understand.
- Blog Posts and Other Thought Leadership Content to Drive SEO
Blogging and other forms of thought-driven marketing are an important part of any digital campaign. Not only does blogging drive inbound site traffic, but it also helps drive conversions and long-term results. Additionally, it positions a brand as an authority in its field. On average, brands that publish blogs get about 67% more traffic to their site.
But blogging can be especially helpful in ICO digital marketing. Why? There’s still a lot of debate about cryptocurrency, and many consumers and potential investors have questions. Like explainer videos, blogs can clear confusion, enhance investor confidence, and improve ICO success.
- Social Media Presence, Influencers, and Community Forums
Social media content can be a powerful tool for ICO marketing. A report shared by Coinzilla shared that 82% of consumers feel more positive about a brand after reading its content. Plus, 70% of them report feeling closer to the brand after doing so.
According to SEM Rush, 46% of people take recommendations from bloggers and vloggers, and unlike many actual celebrities, influencers and vloggers add a different kind of credibility because they feel “more relatable, accessible, and authentic to users.”
When it comes to social media and other community forums, cryptocurrency seems to thrive on these sorts of interactions. A strong community is a great way to drive engagement and increase brand awareness. Coinzilla shared that for ICO and cryptocurrency projects, there was a lot of (unpaid) activity on social media. The top 5 communication channels used for these projects include:
Telegram in particular seems to be popular among ICO and cryptocurrency projects, with 550 million users, direct feedback, and one-on-one interactions.
- Public Relations and Affiliate Marketing
Press releases, affiliate marketing, and other public relations channels are undeniably helping in building a brand image and increasing awareness, especially with high-profile publications and affiliates.
It can be a challenge (or a big investment) to get a crypto publication to discuss a company’s ICO, which means companies looking to pursue this marketing channel should do their research and look at similar projects to see what they did, including which websites they used, how (and if) they raised funds to do so, and how to approach a company’s unique selling point.
A strong PR campaign, which includes press releases, conferences, events, interviews, podcast appearances, and more, includes plenty of opportunities to talk about a company’s ICO. It is an important component of any ICO marketing strategy.
- Paid Ads and ICO Directory Listings
While an ICO can’t take advantage of a paid ad in the conventional way as a result of a growing list of rules and regulations, paid advertising remains an effective way to grow an ICO network. Some crypto ad platforms can promote an ICO with various advertising methods like native ads and display ads. Companies preparing for an ICO should consider ad platforms that:
- Have an expansive, targeted network
- Offer multiple ad formats
- Provide a wealth of analytical data on clicks, impressions, costs, and more
- Offer support
- Email Marketing and Bounty Programs
Email marketing remains a highly effective tool for any marketing strategy, and ICO marketing is no exception. Email marketing also offers a big payoff, boasting an average return on investment (ROI) of $38 for every $1 spent; a higher rate than any other digital marketing channel.
A unique marketing strategy for ICOs is the use of bounty programs, which provide incentives for activities surrounding ICOs. It’s like a reward or a token for participants who complete specific tasks to promote ahead of an ICO. It makes sense in the crypto world that these bounty programs got their start in the digital video game world, since there is a huge overlap between interested investors and digital gamers, and can be an appealing tactic in reaching this niche market and turning them into brand advocates.
Measuring ICO Marketing Success
The world of ICO marketing doesn’t stop once the campaign begins. Like with any good marketing strategy, companies preparing a marketing campaign for their ICO should track their success and adjust their methods according to the data they receive once the campaign begins.
Tools like Google Analytics can help companies track website traffic, and marketing tools like email campaigns, social media campaigns, blogs, videos, and whitepaper downloads all come with their own metrics, which can be used to refine marketing strategies.
Coinzilla recommends setting at least 10 to 20% of a campaign in motion before making any changes though. Why? Because companies need enough data to really see how their marketing campaign is performing. Measuring success shouldn’t come in the first hour of an ICO campaign, and maybe not even the first day or week. It takes time, but this patience can pay off with better ROI and stronger performance overall.
A Specialized Agency like Gate 39 Media Can Help
At Gate 39 Media, we are all about your goals, your projects, and your vision. Embarking on an ICO is a big step, and the intricacies of ICO marketing shouldn’t be left to a basic marketing firm. We have the tools, inside industry knowledge, and know-how to help make it happen.
Digital marketing is always changing and evolving. And with crypto and ICOs, tomorrow may bring on new marketing trends. We keep pace for you. Since we specialize in marketing services for the financial industry, you won’t have to worry about compliance, regulatory requirements, or security. We have all of that under control. And because financial marketing is what we do, we’ll align our expertise with your vision, using tried-and-true marketing strategies.
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