Written by: Alex Topchishvili, Marketing Director at CoinList
Compiled by: Linda, Web3 MKT
Introduction:
In a bear market, the project’s marketing budget will be reduced, and users’ willingness to interact will also decrease. Many friends in the Web3 market have expressed the view that “it is difficult to do marketing in a bear market.”
However, is this really the case? Users are more motivated in a bull market, but they will face greater marketing competition. Although budgets are reduced in a bear market, there are still many resources you can use, giving you the opportunity to stand out in the next bull market.
The author of this issue is the marketing director of CoinList. Based on his personal experience, he specifically analyzes how to do marketing in a bear market. In 2022, the crypto industry no longer has a market value of 2 trillion US dollars, and with it comes a lot of hot discussions around Web3.
For months, as the crypto market has been cold, marketers (and their budgets) have been feeling the pinch. Web3 projects around the world are in a state of low sentiment, and marketers are waiting for the market to pick up to do more marketing. But in my experience, this is a mistake.
Bear markets present a great marketing opportunity for three main reasons:
It is much more cost-effective
Much less noise to filter
This is an investment that will generate excess growth and returns during the next bull market
In this post, I will introduce a growth framework for marketing in a bear market and discuss how emerging Web3 projects should allocate limited marketing resources.
1. Define your growth metrics
Bull markets and concepts are not long-term, and using terms such as "Protocol" and "DAO" cannot stimulate users' demand for your product and reduce the workload of developers in the long run. Therefore, before considering growth, it is particularly important to understand the specific indicators of growth for different projects.
While every project has a unique definition of growth, there are some common Web3 growth metrics that fall into categories:
L1/L2 Protocol: Number of independent contributing developers, number of active wallets, number of interactions, number and size of transactions
DeFi: Total value locked (TVL), number of active wallets, number of interactions
Games: Number of active players, transaction volume per user, number of guild partners
Marketplace/Exchange: Monthly active users, number of listed coins, number of transactions, total transaction volume
SaaS: Revenue per customer, Customer Acquisition Cost (CAC), Churn
Defining your measures of success, like achieving product-market fit, is a prerequisite before you start exploring growth tactics, developing strategies, and finding tools.
2. Use existing resources to drive growth
Even in the midst of a crypto winter where marketing budgets are being slashed, many marketers in Web3 are neglecting one of the most important resources available to them: the business’ existing assets.
Of all the existing assets owned by Web3 startups, the following three are the most important:
Core Team: Your team is your most valuable asset in marketing. When you launch a new product, acquire a new customer, or produce content, every team member should be on the front line helping the team share and distribute project information appropriately within their personal social networks — especially on Twitter.
Users: One of the biggest issues for any Web3 marketer is the lack of case studies and customer success stories. If you have happy customers, you can boost your marketing by crafting compelling case studies that can serve as proof of success in converting prospects into end customers.
SEO: Everyone has a website and a blog, but not nearly enough Web3 marketers are investing in making their sites and apps search-friendly. To ensure the integration of any marketing campaign, optimize your site for proper indexing and user-friendliness. This will have a positive impact on your organic search traffic. Optimize your search target keywords during bear markets when competition is low, and reap the benefits during the next bull market.
User Acquisition: Double Down on Web3 Native Growth Channels and Cut the Rest
User acquisition in Web3 is a bit of a mess, especially in a bear market.
Too many well-funded teams are burning VC dollars with strategies that neither reach their target audience nor provide ROI — like funding lavish conferences and dinners around the world, sponsoring celebrities, and paying exorbitant fees to crypto influencers and Web2 ad networks (FB, Google, Reddit, TikTok, Quora, etc.).
Attribution is particularly difficult for marketing efforts like crypto influencers and conferences, which may not be worth doing in a bear market if ROI can’t be measured properly.
Here are two Web3 user acquisition strategies that, if done well, can be a good area to focus on when the market is down. 1. Airdrops A popular method of user acquisition in Web3 is token airdrops. Projects airdrop (or distribute) free tokens to the crypto wallet addresses of users who have met certain prerequisites or completed certain tasks used by the protocol.
Assuming you’ve carefully thought through the token economics and potential utility of your token, and have thoughtfully considered which users receive the airdrop, you can attract high-quality users from day one and serve as a user and community reward, promoting an active and cohesive user base for your project.
While there have been many successful airdrops (e.g. Uniswap, ENS), airdrops also have their own flaws and risks for projects. Since airdrops occur on-chain, there is little reliable way for projects to assess the on-chain reputation of the recipient.
So this creates two problems:
1. Airdrop to pure profiteers, and get excess airdrop allocation by placing orders
2. It is impossible to allow users who have not participated in similar airdrops or users who want to contribute to the protocol to participate
Without enough “buy-in” or widespread trust in the protocol from token recipients, tokens are often immediately dumped, causing the price to crash and harming the entire ecosystem. Examples of bad airdrops include Optimism and Ribbon Finance.
In order for airdrops to work in a bear market, launching token airdrops needs to confirm the on-chain reputation of users and focus on users with a proven record of contributing to the protocol, rather than airdropping to speculative users who sell tokens at the first opportunity.
2. Bounty and Voucher
Another Web3 native user acquisition strategy that is becoming increasingly popular is to launch incentivized rewards campaigns on bounty platforms, rewarding users with cryptocurrency when they complete specific on-chain actions such as trading, staking, swapping, lending, following social, etc. For new users, this is a way to earn cryptocurrency while learning and building credibility to become contributors to emerging projects.
For Web3 projects, this is a way to identify and acquire quality contributors based on their proven and value-added activity. Instead of paying Facebook or Google to capture whatever minimal search traffic is left in a bear market, you pay active users who have previously demonstrated value-added activity or positive on-chain behavior, which is a much more likely to keep a engaged crowd and contribute to your community. Some such bounty platforms include: Flipside CryptoLayer3Project GalaxyRabbitholeQuest3DappBackCrew3CoinList Karma
4. Invest in content → Reduce competition and get more attention for your content
New narratives scare users away. If something evokes fear, uncertainty, and doubt (FUD), most people will simply avoid it. The antidote to this fear is education.
As marketers in an industry plagued by various scams and dark histories, we have to help our users understand Web3 products and bring them real value through quality content and thought-provoking insights. There is no better and more effective time to educate than the crypto winter. Creating quality content relevant to your target audience in a bear market will help your project attract organic traffic, build trust, boost your SEO, and build brand value.
In a bull market, it’s hard to be unique and stand out due to the sheer volume of content being produced and shared. But in a bear market, there’s much less content being produced, which makes it much easier to get attention for your content and establish your project as the go-to product and thought leader in your niche.
Remember — Google considers the timeliness of content when deciding which search results to serve up. Content that was published during the last bull run may not be present again. Regardless of what happens in the industry or how much value is wiped out, crypto users who are in it for the long term will still check Twitter and refresh their alerts a dozen times a day, which will also provide ample exposure for your content. Investing in content during a bear market will pay huge dividends during the next bull run, as people will always remember which companies struggled during a bear market and which projects continued to remain active and most watched. Web3 will likely never be smaller than it is today, and your competition will never be less than it is today.
5. Community is king: Build a community with a specific purpose
In Web2, the main go-to-market target is your customers, who are usually acquired through sales and marketing efforts. In Web3, the marketing targets will include not only customers/users, but also developers, investors, and partners. Since Web3 projects are "community-owned" rather than just "community-led", the distinction between owners, shareholders, and users is often blurred, so it becomes more important to define the goals well.
Unlike Web2, in Web3, purpose, community, and product are key to leading a project to go-to-market. Often, a project grows not because users flock to an existing product, but because of the ideas and perceptions embodied by its community. The community helps define and shape the product.
A few examples of this include:
Friends With Benefits, a social DAO that was originally just a Discord group with tokens as the entry condition;
Loot, a game that starts with content first and then moves on to gameplay;
Smoothie, a discover-to-earn rewards platform, initially was just content and community around discovering Web3 startups.
Some tips for building community in a bear market:
Go where Web3 users are: Web3 communities have settled on their platforms of choice, so building a community means meeting users where they are. Twitter and Telegram are go-tos for announcements and public group discussions, but Discord has become the primary go-to platform for project leaders who want the most flexibility in managing their community.
Be clear about your purpose and intent: When new people arrive, they should be able to easily find and understand your organization’s purpose (why you exist) by browsing pinned posts and channel titles. Include relevant links to your website, project documentation, or an introductory blog post or video so people have a chance to learn as much as possible.
Set clear boundaries: Once a community has adopted a culture, it is difficult to change it, so it is important to set clear boundaries for acceptable behavior from the beginning. Make it clear what actions may result in a ban, and deal with violations quickly and consistently.
Cross-promote with other communities: Build partnerships and collaborations that help cross-promote the Web3 community. In a bear market, good news around collaborations is scarce, so every relatively positive announcement is amplified. Whether it’s through project collaborations, joint AMAs, or joint content initiatives, when you do have the opportunity to cross-promote and leverage the marketing influence of your partners, be sure to leverage it!
Leverage your community: whether it’s amplifying your content to reach a larger audience, providing reviews or feedback, testing new features before they go live, creating analytics tools, completing bounty programs - engage the community as much as possible and spread the word, and the incentives should be as clear as possible. As Web3 matures in this bear market, the need to understand customers, growth drivers, and actual growth metrics will also become more mature. I look forward to all kinds of new growth models emerging in Web3, and the progress of projects using them.