Less Noise, More Signal: Web3 Marketing In A Bear Market

Builders • Sep 15, 2022

Almost $2 trillion of market value has disappeared from the crypto industry in 2022, taking with it much of the buzz around Web3. With crypto winter in full swing for several months now, marketers — and their budgets — have felt the heat. Web3 projects worldwide are laying low and waiting for the market to pick up to do more marketing.

In my experience, this is a mistake.

Bear markets offer a great marketing opportunity for three main reasons:

It is far more cost-effective
There is far less noise to cut through
It is an investment that yields outsized growth returns during the next bull run

In this piece, I present a growth framework for marketing in the bear market and discuss how emerging Web3 projects should deploy their limited marketing resources.

1. Define your growth metrics

Ideology and bull market momentum does not sell long term, and utilizing terms like “protocol” and “DAO” doesn’t remove the requirement to develop and scale a product that people actually want to use. Before considering growth, however, it’s important to understand what growth means for your project.

While every project’s definition of growth is somewhat unique, here are some common Web3 growth metrics broken up by category:

L1/L2 protocols: Number of unique contributing developers, number of active wallets, number of integrations, number and size of transactions
DeFi: Total value locked, number of active wallets, number of integrations
Gaming: Number of active players, transaction volume per user, guild partnerships
Marketplaces/exchanges: Monthly active users, number of listings, number of transactions, total transaction volume
SaaS: Revenue per customer, customer acquisition cost (CAC), churn rate

Defining your measure of success, just like achieving product-market fit, is a mandatory prerequisite before beginning to explore tactics, strategies, and tools for growth.

2. Use existing resources to drive growth

Many marketers in Web3 overlook one of the most important resources available to them, even in crypto winter when marketing budgets are slashed: the existing assets of their business. Of the existing assets that all Web3 startups have, these three are among the most important:

Core team: Your team is the most valuable asset for your marketing. When you launch a new product, score a new client, or produce a piece of content, every team member should be on the front line helping to appropriately share and distribute the information within their personal social networks — particularly on Twitter.
Customers: One of the biggest issues for any Web3 marketer is the lack of case studies and customer success stories. If you have happy customers, use them to power your marketing by creating compelling case studies that serve as the ultimate social proof needed to convert prospects into customers.
On-site SEO: Everyone has a website and a blog, yet not nearly enough Web3 marketers devote mind-share into making their websites and apps search friendly. To ensure the compounding effect of any marketing campaign, optimize your website for proper indexing and user-friendliness. This will have a positive impact on your organic search traffic. Dominate your target keywords during the bear market when competition is low, and reap the benefits during the next bull run.

3. User acquisition: Double down on Web3-native growth channels, cut the rest

User acquisition in Web3 is a bit of a mess, especially in a bear market.

Too many well-funded teams are lighting VC dollars on fire with strategies that neither reach their target audience nor deliver cost effective acquisition — funding extravagant conferences and dinners around the world, sponsoring celebrities, and overpaying crypto influencers and Web2 ad networks (FB, Google, Reddit, TikTok, Quora, etc). Attribution is particularly difficult for channels like influencer marketing and conferences, and if you can’t properly measure the ROI, it probably isn’t worth doing in the bear market.

Here are two Web3 user acquisition strategies that, if done properly, can be a great area of focus on when the market is down.

I. Airdrops

One popular method of user acquisition in Web3 has been token airdrops. A project airdrops (or distributes) free tokens into crypto wallet addresses of recipients that have met certain prerequisites or completed certain tasks indicative of protocol usage.

Assuming you thought through the tokenomics and underlying utility of the token, a properly executed airdrop to a well thought-out group of recipients can attract high quality users, reward the community for their efforts, and help projects ensure they have an active and aligned group from day one.

While there have been multiple successful airdrops (e.g. Uniswap, Ethereum Naming Services), airdrops also have their share of flaws and risks for projects. Because airdrops occur on-chain, there are few reliable and robust ways for a project to evaluate a recipient’s on-chain reputation. This creates two problems:

Airdrop farmers and Sybil attackers who game the system to receive outsized airdrop allocations
Unengaged users who may not be well-educated on the token utility or committed to the development of the protocol

Without sufficient “buy-in” from the token recipients (as is the case with token sales) or existing widespread confidence in the protocol, tokens are often dumped immediately, causing price crashes and harm to the overall ecosystem. Examples of airdrops gone wrong include Optimism and Ribbon Finance.

For airdrops to be effective in the bear market, projects launching tokens will need to confirm users’ on-chain reputation and focus on users with proven track records of contributing to protocols, rather than airdropping to misaligned users that dump tokens at first opportunity.

II. Bounties & credentials

Another increasingly popular Web3-native user acquisition strategy is launching incentivized rewards campaigns on bounty platforms that reward users with crypto when they complete specific value-add on-chain actions (i.e. trade, stake, swap, lend, follow on social, etc). For new users, it is a way to earn crypto while learning and building credentials to become a contributor to emerging projects. For Web3 projects, it is a way to identify and acquire quality contributors based on their credentials and value-adding activities.

Rather than paying Facebook or Google to capture whatever minimal search traffic is left in the bear market, you are paying to onboard users that have previously demonstrated value-add activities or positive on-chain behavior, a demographic that is significantly more likely to stay engaged and contribute to your community. Some such reward platforms include:

4. Invest in content → Less competition, easier to get eyes on your content

New things scare people. If something causes fear, uncertainty, and doubt, the majority of people are hardwired to avoid it.

The antidote to that fear is education. As marketers in a sector plagued by a dark history of heists and fraud, we're forced to help our customers understand the real value that Web3 products enable through quality content and thought leadership. And there is no better and more effective time to do this than crypto winter.

Creating quality content in a bear market that is relevant to your target audience will help your project attract organic traffic, establish trust, boost your SEO, and build brand value. In the bull market, it is extremely difficult to stand out with unique content due to the sheer amount of content being produced and shared. In the bear market, there is far less content being produced, making it much easier to get eyes on your content and establish your project as the go-to product and thought leader in your niche.

And remember — Google uses the timeliness of your articles, podcasts, newsletters, and tweets in its decision-making process of what content to serve. Content that was published during the last bull run might no longer be relevant. And no matter what is going on in the industry, or how much value gets wiped out, crypto users that are in it for the long term will still check Twitter and refresh their feeds a dozen times a day, giving your content plenty of opportunity to stand out.

Investing into content in a bear market will pay massive dividends during the next bull run. People always remember which companies went dark during the bear market, and which projects continued to stay active and top-of-mind. Web3 may never be smaller than it is today, and you may never have less competition than you have today.

5. Community is king → build a community with a specific purpose

In Web2, the primary go-to-market stakeholder is the customer, typically acquired via sales and marketing efforts. In Web3, an organization’s marketing stakeholders include not just their customers/users, but also their developers, investors, and partners. Because Web3 projects are community-owned rather than just “community led,” the distinction between owner, shareholder, and user is often blurred, and the need to define your purpose becomes all the more important.

Unlike in Web2, purpose and community, as much as the product, lead a project’s go-to-market. Oftentimes, projects grow not because users flock to an existing product, but because of the idea and lore that its community embodies. The community helps define and shape the product. A couple of examples of this include Friends With Benefits, a social DAO which started as a token-gated Discord server for web3 creatives; Loot, a game that started with content first before moving to gameplay; and Smoothie, a discover-to-earn awards platform that started out with just content and community built around Web3 startup discovery.

Some tips on building community in the bear market:

Go where Web3 users already are: Web3 communities have already settled on their platforms of choice, so building a community means meeting users where they are. Twitter and Telegram are must-haves for announcements and open group discussions, but Discord has become the main platform of choice for project leads who want the most flexibility in how they manage their community.
Be clear about your purpose and intentions: When newcomers arrive, they should be able to easily find and understand the purpose (why do you exist) of your organization by navigating through pinned posts and channel titles. Include relevant links to your website, project documentation, or introductory blog posts or videos so people have the opportunity to find out as much as they can.
Set clear boundaries: Communities quickly adopt cultural norms that can be difficult to change once embedded, so it is essential to set clear boundaries about acceptable behavior from the outset. Be explicit about which actions can result in mutes or bans, and deal with infractions quickly and consistently.
Cross-pollinate with other communities: Establish partnerships and collaborations that help cross-pollinate Web3 communities. Good news surrounding collaborations is sparse in the bear market, so each relatively positive announcement is magnified. Whether it's through project collaborations, joint AMAs, or joint content initiatives, when you do have an opportunity to cross pollinate and leverage your partner’s marketing reach, make it count!
Leverage your community: Whether it is amplifying your content to reach larger audiences, giving reviews or feedback as social proof, testing out new features before they go live, creating analytics tools, completing bounty programs – involve the community wherever possible and make the call-to-action and incentives as explicit as possible.

As Web3 matures in this bear market, so too will the need to understand customers, drivers of growth, and real growth metrics. I expect to see a variety of new growth models emerge in Web3, and look forward to the advancement of the projects that employ them.

Legal notice

This op-ed was originally published in the Entrepreneur's Handbook.

The opinions expressed in this op-ed are those of the author and may not necessarily to reflect the opinions of CoinList.

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