Every major technology platform connecting developers, apps, and people needs a marketing stack to achieve wide distribution. Facebook helped upstarts like All Birds ($370M Market cap in seven years) enter and win a market with existing incumbents like Nike. Facebook Ads has helped unlock the Shopify platform for D2C businesses. Apple and Google Play stores have led to apps like LensAI generating $35M in 45 days, and gaming distribution platforms like Steam are generating $10B in gaming revenue for devs in 2021 alone.
Unfortunately, even after roughly a decade, Web3 or Crypto has yet to establish a defacto distribution channel and tools to perform effective marketing. The playbook for Web3 marketing that truly delivers downstream business KPI and impact is still being formed. Even though used heavily, Airdrops are not as effective (recent study). Marketers from Web2 have attempted to join Web3 and deliver on growth promises but ended up struggling and desperately seeking help. We are seeing a new web3 playbook from marketers like Matthew Howells-Barby at Decentral Games for their dApp but it's pretty customized and not generalizable for the broader industry.
Can't run Ads on Web2 platforms like Facebook or Twitter: These platforms have yet to figure out a clean way to detect spam vs. legitimate Web3 dApps. Hence the default answer today is you can't run crypto ads. Some dApps have tried to bypass this restriction by removing all crypto-specific language but struggle with bounce rate since users are surprised with Web3-specific onboarding. Apple opening up the iOS ecosystem for NFTs is a step forward to help marketers, but most Web3 dApps are not mobile-native yet.
Lack of business messaging channel for re-engagement or prospecting in Web3: Identities are represented via wallets in Web3, but there are no wallet-native messaging protocols that serve the business messaging use case well, similar to email or SMS in Web2. This leaves Web3 businesses lacking a way to personalize messaging and build retention from existing user bases. Some might argue Discord fills that gap, but if you dig deeper, most of the messages are broadcast-based, and due to lack of identity verification, DMs are almost always banned. A good solution would entail defining a transparent pricing structure to protect users while balancing value for businesses (even WhatsApp struggled with that), engaging message formats to enable automated workflows on a business's end, business verification for trust, and a widely accepted consumer experience.
Traditional Martech tools don't work for Web3: The consumer identity interacting with a Web3 dApp is split across three ecosystems – on-chain, off-chain or in-app, and social. For example, a game user will engage with the community on Discord, buy/sell game NFT on MagicEden or other marketplaces, and continue progressing in the game. None of the current analytical tools (Mixpanel or Google Analytics) can capture and assemble this information for the purposes of understanding users and developing effective marketing strategies.
Working with Crypto Influencers: Lack of trusted Web3 crypto influencers leads to a large sum of upfront money wasted, and on Twitter, the quality of engagement is low due to bots.
Working with Web3 Ad networks: Still early days, but some of the existing ad networks in Web3, like Galxe are facing issues with bot traffic which leads to low-quality traffic. Some of the networks, like Coingecko, are demonstrating promising results.
Airdrop NFT into wallets: Low open rates since wallets are still write-only surfaces, and due to the lack of any penalty on airdrops to keep quality in check, most of this activity is pretty spammy (great thread by kunal_modi here).
Vampire Attacks: This is a Web3 tactic in which you attempt to attract users from competing projects by offering them early access to tokens or NFTs from yours. Good examples include Sushiswap vs Uniswap and LooksRare vs OpenSea. While innovative, this tactic has yet to prove that it can retain users in the long run.
Metaverse Ads: A defacto Metaverse could be a powerful distribution channel; hence, many Games have started investing in building land parcels in Decentraland or Sandbox to attract Web3 users. Unfortunately, the tactic depends on Metaverse adoption and subsequent properties like Decentraland, which have struggled with active user count.
Some Web3 dApp companies are taking the matter into their own hands to develop unique marketing playbooks or in-house technologies to help them grow. Good recent examples are Decentral Games and Horizon Games.
Most dApps hack in-house solutions like the Lido referral program, attribution software, analytics software, or engagement systems. Unfortunately, these efforts are not the company's core focus area, leading to many wasted resources. Based on our conversations with ~100 marketers, at least 3-4 FTE (1-2 Engineers, 1 Data Scientist, and one dedicated Marketer turned Product manager) are allocated to these efforts. Not to mention the risk of loss via wallet spam that typically impacts these campaigns (check out the report for Lido).
The good news is that the Martech space has already started getting some solid builders. The density is much lower than Web2, though.
Web3 Martech space is generating interest from prominent VCs like Tomasz Tunguz https://tomtunguz.com/web3-marketing-stack/.
We firmly believe that a native marketing stack will unlock the mass adoption of Web3 dApps and technologies in Web2 spaces. There is an opportunity to make marketing fair, rewarding, and transparent for consumers.
At Sesame Labs, we are actively building something compelling in this space. We will share more details about our potential solution in the upcoming posts. Follow us on Mirror or Discord, or Twitter to get more updates.
Thanks to the Sesame team, Ashu, and Abhinav for providing valuable feedback.