ICO (Initial Coin Offering) is all the rage nowadays.
When a startup firm wants to raise money through an ICO, it usually publishes a whitepaper that outlines what the Initial Coin offering project is all about.
What the venture will fulfill upon completion, how much cryptocoins is needed to undertake the project, how much of the virtual currency the pioneers of the ICO will keep for themselves, what type of virtual currency is accepted, and how long the ICO campaign will run for.
During the ICO campaign, supporters of the firm’s venture buy some of the dispersed cryptocoins with fiat or virtual currency. These cryptocoins are referred to as tokens and are similar to the shares of a company sold to investors in an Initial Public Offering (IPO).
In cases when the money raised does not meet the minimum funding needed by the firm, the money is refunded to the backers and the ICO is deemed a failure. If the funding requirements are met within the specified schedule, the money raised is used to complete it.
ICO investors are usually driven to buy the cryptocoins in the anticipation that the plan becomes successful which could translate to a higher cryptocoin value than what they purchased it for before the venture was initiated.
An example of a successful ICO project that was profitable to early investors is the smart contracts platform called Ethereum which has Ether as its coin tokens. In 2014, the Ethereum project was announced and its ICO raised $18 million in Bitcoins or $0.40 per Ether. The project went live in 2015 and in 2016 had an ether value that went up as high as $14 with a market capitalization of over $1 billion.
Many ICOs Fail
However, despite the meteoric rise of ICOs in popularity and amount of funding raised monthly, we see many ICOs failing miserably.
Hundreds of ICO firms that didn’t meet their funding goals have been analyzed and all of them fall short to having a ‘digital marketing chain’.
ICO Growth Drivers
To understand how to change this, we need to understand what drives the growth of ICOs.
- The power of blockchain, tokenization, and decentralization
- The massive increase in the value of cryptocurrencies
The market capitalization of all cryptocurrency has risen from $7 billion in January of 2016 to over $130 billion in September 2017.
Bitcoin has appreciated nearly 30X since September of 2013 ($135 USD per Bitcoin), reaching over $11,000 per Bitcoin in December 2017. In part, this is due to Bitcoin’s role as the most widely known, used, and accepted cryptocurrency for payments.
Ether has appreciated more than 100X since August of 2015 ($2.83 USD), reaching over $400 in December 2017. In part, this has been due to Ether’s role as the core utility token of Ethereum – the most widely used blockchain-based computing platform for ICO token sales.
The early cryptocurrency buyers and holders have experienced massive gains and are now sitting on hundreds of millions, or even billions, in cryptocurrency value.
ICO Success Factors
The success of an ICO hinges on the following:
- Massive support from current and new cryptocoin investors
- Massive information dissemination – ICO marketing campaign
It is therefore crucial for firms to have a strong marketing campaign for their ICOs to attract supporters.
Cryptocurrency users are already investing in various ICOs on a monthly basis, you only need to spread the word out about your upcoming ICO to make sure that many people will learn about your ICO.
Aside from existing users, there is a huge market to tap for new users. With less than 2 million cryptocoin wallet users in 2014 to 15 million in the 3rd quarter of 2017, blockchain still has a lot of room to grow.
ICO Digital Marketing Strategy
A recommended marketing strategy for an upcoming ICO is a robust content marketing promoted via PPC and remarketing, as well as amplification by social media marketing to build a community.
Your marketing must be built on a strong value proposition. What does this token do?
- How it works in your system
- What problem it solves
- Why this is the best way to do it
- What features does yours have that makes it unique
- Why must an investor buy tokens from you
It is crucial that the value of your venture be communicated effectively through compelling storytelling. White papers are the default format, but firms should also start using other formats such as videos, infographics.
- Write a comprehensive White Paper
- Create an Explainer Video
- Create an Explainer infographics
PPC and Remarketing
Given the great speed ICOs are moving, PPC and Remarketing is a great fit to promote ICOs. PPC and remarketing on search channels, as well as on social media channels prove to be effective in reaching a wider audience and gaining huge supporters and investors.
Build a Community
Most people from the early days of cryptocurrency started on forums, like bitcointalk.org and Reddit, discussing what works and what’s new in the cryptocurrency universe. It’s important for your team to generate a presence and participate in these conversations.
Build an Email List
An email list must be built from out of those who responded to your digital advertising and remarketing campaigns, as well as your community members. With an email list, it is now easier to keep your community updated with the developments around your ICO and your firm as a whole.
If you are looking to venture into cryptocurrencies and if you need a marketing strategy for your ICO, feel free to contact me.