{PotatoEng 20} The Ultimate Web3 Marketing Guide w/master market…

{PotatoEng 20} The Ultimate Web3 Marketing Guide w/master marketer Art Malkov

November 9th, 2022

Writer, Editor: VaporAviator (M), Jiahui (F)

Is marketing in Web3 different from that in Web2? What are the performance metrics of Web3 marketing? How to avoid failures in content distribution? How to form a vibrant community around tech-oriented projects? …etc. In this episode, we will take a deep dive into Web3 marketing for tech projects with Master Art! This episode will be in Q&A form.

🥔 Potato Guests

Art Malkov | Web3 marketing expert since 2016. ex-CMO at IoTeX, Polymarket, etc. Contributing Writer to Forbes Business Council. Advisor at Columbia Lab to Market Blockchain Accelerator.

CoHost | F. Ex-theatermaker; Building Web3 infra

CoHost | M. Experience designer, Strategist in Web3 & immersive tech

Note: All content does not constitute investment advice. Some of the content is a paraphrase and does not represent the position of Meta Potatoes

On Oct 26th, we held a pre-launch Q&A session with Art (which has almost no overlap with this episode) Link is here: https://youtu.be/1hO6K97LPGM

Q: Intro about yourself. How did you go to Web3?

Came from Web2 marketing. Was head of marketing at a digital agency in New York. Went through all different stages in Web2 marketing such as content, analytics, AD, PR, etc. Was pulled into crypto when working with Blockchain Driven in 2016. Have been doing crypto marketing since then.

[ 1 ] Web2 v.s. Web3 Marketing

🍊 Highlights

Crypto companies should not ignore some marketing fundamentals just because they are in an entirely new field.
At present, most crypto companies do not have real products, so there is no unified metric to measure marketing results. It’s important to find key metrics that measure real performance.
Marketing is not about PR and events, but about how to effectively interact with potential customers by designing their next steps when they come to your page.
Mindset-wise, 4Ps and 3Cs in traditional marketing can be applied to Web3 marketing. But you need to think about what each element actually represents.

Q: Differences between Web2 and Web3 marketing strategies?

Lots of crypto companies think they’re in an entirely different space so they ignore the fundamentals of marketing.

Generally, fundraising is easier in crypto. If you’re raising money in the traditional space, they’ll ask you about marketing, etc. Whereas in crypto, they’re like, do you have a strong dev team? Great, here’s the money.

There’s no real ROI right now in crypto. You’re building the infra/future, but that also means you actually don’t have anything to show most of the time. Unless you’re a very core infra for most blockchains — there’s still no real revenue stream. So marketing is sort of detached from real results. A big part of my role is “how do we measure real results”. Crypto companies are either burning money or not doing anything with it (in terms of marketing). Either one is not correct.

Therefore, Web3 companies shouldn’t ignore Web2 fundamentals, such as ROI (Return On Investment), CAC (Customer Acquisition Cost), etc. Lots of companies just go to conferences, spend a lot of money on PR, and think they’re doing marketing. PR & Events are not really marketing, it’s much closer to BD. Marketing is, when potential customers come to your site, how do you engage with them, do you plan their next steps, etc. PR only supports those steps.

Q: Strategies like 4Ps, 3Cs, SWOT, etc. are still applied to Web3 marketing, or there’s a different mindset that should be taken?

Ofc it applies, but that’s the strategic sense, not statical. Like 4Ps, product, price, place, and promotion, what does that really mean? It’s actually meaningless unless you have experience in running campaigns.

Product is different in Web3, cuz generally you don’t have anything to sell, for MOST projects. (e.g. You can sell NFTs but it’s also a volatile and speculative asset so you can’t really build a business on it)

[ 2 ] Web3 Marketing Metrics

🍊 Highlights

Take 4Ps, generally, crypto companies can only do Place and Promotion.
User-related metrics, such as active email subscribers, wallet downloads, etc. are meaningful.
The most important thing is not whether the project is tech-oriented, but the number of active users. Because the crypto space is so small, all the companies in this field are competing with each other.
Set realistic goals and compete with those of the same magnitude.

Q: What are some of the performance-based metrics in Web3 marketing?

I’ll go back to 4Ps. Product, product in crypto is still unclear. I can give you very few examples of the entire space who’re making money, generally it’s play-to-earn, and even that, when token collapses, there’s no revenue stream. Price, there’s no price, price is token price, dependent on that day. Two normal things working in traditional marketing don’t work in crypto at all. Place sort of works. Promotion is similar to paid marketing.

So out of 4Ps, for most crypto companies, maybe two of them (max) are doing ok. But there are really good ones like Solana, Chainlink, etc. They have the fundamentals and they build it properly.

Going back to your question, there are spec metrics, but they are not as hard metrics. I did a lot of E-commerce marketing back at digital agency, you literally need to know where every cent goes. You need to calculate everything: revenue, shipping cost, profit margin, etc. In crypto, none of these exists. So I had to figure out what is our track points.

For example, at IoTeX, say the objective is to get more users. I found metrics related to users, like active email subscribers, are meaningful. Because you can track how often they open, whom they’re engaging with, etc. tied with analytics.

Another metric, wallet downloads. It’s hard to measure sometimes, so you should be able to track “users go to the website and click download” and consider it a conversion. Then you can allocate value to that conversion (e.g. it’s worth 4 points). When they take spec actions like “returning” to the wallet 4 times (A magic number regarding “returning users” from Starbucks: if the user comes back 4 times they’re likely to be a repeat customer), maybe you can increase their value to 20 points because they’re now active traders thus having more value-add to us.

All these metrics are slightly different (up to the project) but still doable, you can still know what is important, how you can measure it, etc. That’s what I do now: I consult projects on scalability.

Q: Spec metrics for infra-level, tech-focused Web3 projects.

It’s not about tech or non-tech, it’s all about active users. If you’re in the crypto space, you’re competing with other projects. Because the ecosystem is small, everyone is looking at the same channels of information, everyone’s competing for attention.

Q: Any projects you think have done well, up til now.

Solana, Chainlink, and Cosmos. Generally, any project got to Top20 (CoinMarketCap) at some point. But that doesn’t mean you can copy their strategies because the market has shifted. If you’re Top300, you’re competing with Top200 (not Top20). Be realistic.

For example, Polymarket, we became №1 in this space (at least in 2020), we had Vitalik tweet about us, and we went from 1M to 200M in 5 months. No tokens, just trading volume. The reason why we did it is that we were not aiming to be next Ethereum/Solana, etc. and we were doing the best we can do now: make sure we have a strong content writer, strong brand messaging, easy-to-understand value proposition to every customer, etc. That’s most of ppl’s missing part.

IoTeX has a strong tech team, but there were some gaps in marketing, that’s why they brought me in. We went from Top200 to Top70 in 6 months. We outperformed a lot of others like IOTA (also strong in marketing but weak in tech). Now they have a really strong marketing team set up in the right trajectory and I stepped down from my position.

You need to balance tech and marketing. In the prev cycle, 2017–2018, everybody was doing marketing, and some of them didn’t have tech — whereas now — there’re more tech teams but less marketing.

[ 3 ] Tech-oriented Projects Q&As

🍊 Highlights

Tech-oriented projects tend to underestimate the value of marketing.
Enough marketing budget (at least 25%, including people) should be allocated right after the financing is completed.
The most important thing is not (externally) “how to reach out to customers”, but (internally) “how to hire the right marketer in the right place”.
Another important difference between Web2 and Web3 marketing is ecosystem. In Web3, even B2B projects need to have their own ecosystem/community.

Q: In this cycle, I saw lots of tech-oriented projects that can’t find PMF and get their msg crossed to audiences. How to translate the tech language (both background info about blockchain and spec tech used) to an easy-to-understand value proposition that makes the general public feel it’s relevant to their daily lives?

It’s a challenge, but not a real challenge. Tech teams in this cycle actually don’t know how to speak to customers and they tend to underestimate the value of marketing. Imagine a giant car (tech) with a tiny engine (marketing), it doesn’t really matter how big the car is, you need to have the right momentum to accelerate.

It’s all about allocating more budget to marketing. Say a team in Asia, they may want to hire American marketers because they want to understand the mindset. I saw lots of Asian teams hire a lot of front-facing marketing teams in America as it’s one of the largest markets and their next market.

I would say, don’t worry about ways to approach customers, worry about “do you have the right ppl in place to do it”. That’s why I helped companies hire the right marketers. Hire somebody with a proven track record in Web3 and Marketing. If you have a lot of funds, maybe you don’t need marketing, maybe you need someone to write better for you.

Sometimes, a good technical content writer helps a lot

Q: Tech-oriented projects tend to allocate more money to development instead of marketing. If they lack the budget, are there potential ways for them to increase the impact as well?

Why don’t they have the budget? Maybe their budget is wrongly allocated. At least 25% of funds should be for marketing/promotion, including ppl.

Q: For some tech projects facing devs, they may say “we’ve already connected to the dev community and we can go directly to my dev friends” so they may not do marketing for ordinary ppl like me.

Marketing also applies here. What you’re saying is Ad Hoc marketing, where you already know the ppl in the ecosystem. There’s also a big difference from traditional marketing: ecosystem. You need to have an ecosystem, and followers, even if you’re B2B. The reason is that the community is small, and it’s still based on (in a way) word of mouth. We don’t have the format yet. It’s a track that runs parallel to the traditional track. We’re still figuring out what is worth better. Another differentiation in crypto is that ppl want to share ideas with you and a lot of ppl will listen.

Going back to your point — what is marketing now and how to approach it properly — is to make sure you bring in high-level experts to help fill in the foundation.

🍊 Highlights

PR is the biggest error in crypto. What a project needs is not PR, but publications showing that it’s legit.
The role of PR is to tell the community that “there’re people who care about us”. Ultimately, the project should already have an ecosystem/community before PR.
“Less PR + a strong marketing team” is better than “a lot of PR + no monitoring of its effect”.
Especially in the crypto winter, marketing budget should be allocated reasonably and used in drip marketing, content marketing, etc. to maximize PR efforts.
Tokenization is very important, it’s all about “incentivizing the good people to do the right thing”.
As for buying Twitter followers, the ultimate goal should be to “build a real community”. Therefore, start by thinking about “what is the brand’s message, and is it exciting enough”.

Q: Lots of large crypto companies do PRs on major media like (traditionally) Forbes/Bloomberg/etc. (crypto-wise) CoinDesk/Cointelegraph/etc. while smaller projects usually do not have the budget to do so. Do they need to spend that amount of money to do PR?

No, they don’t. PR is the biggest fault in crypto because PR is easy, like fast food. The reality is, you don’t need PR, you need publications to show that you’re legit. Here’s the data: PR is one of the weakest conversions from media to users, and it’s one of the most expensive acquisition mechanics. Even if you get a lot of attention (which is very rare), it’s temporary. Sometimes you’ll get nobody coming to your site and you’ve spent thousands of dollars just for that piece.

PR is used wrong in crypto. The role of PR is to show that ppl care about the project. And then using PR to communicate to your community. Ultimately, you should already have a community/ecosystem to communicate to. If you don’t have a community, spending money on PR is actually a lot of waste. Even if you have a community, you could probably cut down 50%-70% of the PR budget and allocate it to something else like having a better mailing list, doing a proper drip campaign, getting a better content writer, etc. to maximize PR efforts. It’s better to have “less PR + a stronger internal team” than “a lot of PR + not tracking it”.

Chainlink has a vibrant ecosystem to communicate to

We are now in crypto winter. Last year, when you were marketing, ppl were excited and wanted to get information. I helped an NFT P2E game grow from 0 to 30k Twitter followers, organically. This year it would not be possible. **So every time we spend money, we should ask, what should we spend money on? **Be realistic. If you’re not a super exciting project, you’re not gonna do that well. For me, a real-world Web2 application would be exciting, but if you’re another NFT project, you may not get that attention because people are skittish now.

Q: You mentioned tokenization, is it necessary for all projects or some of them?

Tokenization is an extremely important part.

For example, IOTA, their token has no real value/utility. It might be a dirty secret of IOTA, but it’s the truth: there’s no way to incentivize good players from bad players, actually, bad players are more incentivized. So their branding was like, the more you spend, the faster you get — but it works for spam transactions. Sometimes, if you don’t incentivize good characters, spam transactions will overflow your network, and that’s what happened: 99% of IOTA transactions are spam. That’s a good example of a bad tokenization model.

The NFT project I was talking about is called StarCrazy. They have two tokens and one of them is governance tokens owned only by the players. There’s a pool of tokens released every day, and for you to participate, you need to put liquidity in. So it’s DeFi + Gaming. That tokenization is very good and fair because the players are more incentivized to participate. That means, in crypto winter, this project is still doing well because ppl are still incentivized to pull together resources to survive the winter.

Q: The marketing part should be incorporated into the tokenization model during design or it could be added on afterward?

It could be done later as part of the treasury (It’s kind of the norm now). But if it’s part of the core mechanics of the blockchain, it’s hard to change.

Q: When you’re incentivizing users, some of them are real. Some projects are buying Twitter fans and forming a “community” around it. However, if you don’t have initial community members, ppl will not follow you on Twitter cuz they see that you have very few followers; but if you’re buying followers, ppl will not trust you. There’s a dilemma.

Going back to “how good is the communication of your brand”, “how good is your storytelling”, etc. You can’t get users if you can’t tell a story in an engaging way.

Also, Twitter will not give you a good ranking if you’re buying followers. Investors will know as well because they have tools to scan it.

Even if you bought followers and somehow you raised money, you’re still not building your community. To me, it starts with “what is your brand message”. Is that interesting, exciting, sparking ppl’s imagination? If it doesn’t, then go back to the drawing board and figure out what you’re offering. It applies to B2B as well. It’s a critical step: building and growing your community.

[ 5 ] Usage of Web3, Decentralization. Practical Tips!

🍊 Highlights

Tip 1 A domain name that can be easily pronounced without spelling ambiguity. Better to use .com or .io, don’t use .xyz, it will get you into trouble with email marketing.
Tip 2 Tag lines that everyone can understand.
Tip 3 On the homepage/first page, articulate what you are doing and create a desire for people to keep getting to know you.
Tip 4 Post content on the official blog rather than a third-party content platform. Don’t use Medium and Substack, they will steal your SEO traffic; Ghost is recommended. Also, don’t use Mailchimp, which is not friendly to crypto companies and prone to spam; use MailerLite.
Don’t use confusing words like Web3 when marketing to regular users who are not familiar with the field.
The point is not whether it is “centralized”, but whether the information conveyed during marketing is beneficial to the project. Don’t feel sorry for “centralization”, do your best.

Q: The term “Web3” is too generic and often considered a marketing trick. Will you restrict the usage of Web3 in the company’s external materials because the concept is distorted sometimes, or it’s not a big deal?

It depends on whom you’re marketing to. If it’s regular ppl, you should never mention Web3 because they’ll be confused.

Here’re several steps you can do:

A domain that is pronounceable and with no misspells. If you’re a new project, imagine somebody tells your domain to others, if they can’t pronounce it properly or they’re confused, you already fail. Make it super basic and easy for users to find you and engage with your brand. You should also consider using .com and .io. Do not use .xyz because they used to be really big in email scams, so you may have issues with email distribution. If you’re [one word].io, you pay a premium, but that also gives you credibility immediately.
Tag lines that everybody can understand. Good example: IoTeX used to have “building the connected world”.
Imagine somebody goes to your site, is it easy to understand what you’re doing from the first page, meaning, is there a clear reason for them to continue learning about you? Clarity is really important, that’s why you’d better be broad. If you’re too spec, you’re losing your audience. Remember they’re crypto audience, and they switch ecosystems.
How’s your communication built: blog or other platforms? For example, a lot of companies use Medium. That’s a huge error. If you’re using Medium or Substack, you fail. Mirror is ok, Ghost is better (white label solution for blogging, most crypto companies use it). I didn’t get any credit from them but I’m a big supporter. **Both Medium and Substack are stealing your traffic in SEO. **Every time you post on Medium or Substack, you’re “renting out” your content/sales — what happens is that readers go to Medium or Substack and then they go somewhere else (e.g. When you click sidebar “home”, it will take you to the homepage of Medium. At the bottom, there’re also suggested articles (may) from your competitors). That’s not a problem with crypto, it’s a problem with Web2 as well. BTW, don’t use Mailchimp (M: I receive so many spam emails from Mailchimp). Also, Mailchimp doesn’t like crypto companies, they’ll just ban your whole email list. An alternative is MailerLite.

Q: For semi-centralized or centralized Web3 projects, how do they position themselves in Web3-native communities and how do they deal with all the criticisms for not being decentralized?

It depends. Look at Solana, they’re technically decentralized but really centralized. They’re still doing fine. Make sure your marketing is beneficial for you. It’s not about decentralization, it’s about what brand message you want to tell and how to tell it. Don’t be apologetic, do your best.

Ending Notes

🍊 It’s all about the customer. In the future Web3, people are using “Web3” products but don’t know that they are Web3. The next stage will be for large companies to enter the game, building blockchain technology on their existing infrastructure, or launching blockchain-based products that are parallel to existing products. Finally, the benefits of centralization, blockchain, data ownership, etc. will all be leveraged.

Q: What do you envision as the future of Web3?

Ultimately, it’s about customers. People who want to try Web3 projects may not know it’s Web3. I do feel large corporations are the main bastion of adoption because when they’re starting to develop on it, you won’t know it’s crypto (e.g. If you purchase here, you’ll get some Amazon coins that can be used for shipping). **I think the next stage will be that large players are finally taking the crypto space seriously, **releasing projects on top of their existing offerings, and the blockchain infra will be parallel or layered as part of the traditional structure. Now MetaMask is not intuitive to use, but if you can allow some sort of wallet built into your existing services and let users have the same experience as they would have on non-crypto projects — basically taking the benefits of blockchain, centralization, owning your data/knowing how to use your data, etc. and becoming a layer. That’s the future to me of Web3.