How should early Web3 companies choose their growth strategy?

Author: Chainlink Labs; Translation: BlockMania

Generally speaking, the marketing strategy adopted by a startup depends on its business model and the vertical field it is in. However, most Web3 startups choose marketing channels that differ from those of Web2 companies. For example, in the Web2 industry, verticals such as fashion and beauty like to collaborate with KOLs for marketing, but other verticals such as SaaS tools and online banking are less interested in KOLs.

However, in the Web3 field, KOL marketing is very common in all verticals. This may be because Web3 users need experts to guide them on how to navigate the complex and ever-changing Web3 world.

The following figure shows the most popular traditional marketing strategies in the Web3 field. The darker the circle, the more favored the marketing strategy is by early-stage startups, and the larger the circle, the greater the potential impact of these marketing strategies on traffic and user acquisition.

It should be noted that KOL and other marketing strategies also come with relatively high costs. Web3 startups that have not yet obtained financing are better off trying free or low-cost marketing strategies. Especially for startups that have not yet identified their target audience, caution is advised.

Low-cost marketing strategies

Unlike paid advertising-style marketing, this type of low-cost marketing usually focuses on providing some kind of value to the target audience (such as education, entertainment, or inspiration). Because the marketing content itself has intrinsic value, it can usually spread naturally.

For example, answering questions entered by search engine users, people may be willing to share this content on social networks.

Create content around hot topics in the ecosystem

Research and discussion can be carried out around the most discussed topics, project goals, or common interests of various Crypto communities. Specific ways include:

  • Output blog articles

Today, Web3 startups also find it difficult to impress readers with mediocre articles that list data or have vague viewpoints in a three-part structure. Many project teams will use blogs to share their vision and roadmap at the beginning, which is understandable, but it is also difficult to get a lot of traffic.

Instead of producing formatted blog articles, founders should focus on creating content that adds value to their target audience.

For example, Martin Gontovnikas, who transitioned from a developer to a marketing expert, introduced the concept of “Content Products,” which incorporates interactive elements to help project teams better communicate concepts. His “Content Product” concept is mainly aimed at developers, but it is also applicable to other target audiences.

  • Output long-form social media posts

Startups can also release segmented content instead of long-form blog articles.

For example, LifeDeFied launched an event called “DeFi Term of the Day,” which explains DeFi in simple terms. The goal of this event is to educate the target audience and establish a good image and brand equity, rather than simply implanting products.

  • Play to your content strengths

Text-based content is popular because it can naturally attract search traffic, but content is not limited to text. Many founders use their own strengths to create content in the way they are best at. In addition to text, videos, audios, or even a series of GIFs can be created as well.

The most important thing is that the conveyed information should be clear enough.

Focus on SEO in the early stages

Most startups have a general understanding of the importance of SEO, but they are usually unwilling to invest resources in SEO before creating enough content.

Doing so can miss out on huge opportunities. Admittedly, it takes a considerable amount of time to find the right keywords, get enough backlinks, and build domain authority to rank at the top, but it is worth it and can attract more traffic in the long run.

In the Web3 field, a common practice to rank high in search results is to publish long-form content on third-party platforms such as Medium or Hackernoon. These are good entry points that can have high domain authority and naturally attract traffic. Some experts do not recommend using Medium because it cannot drive traffic or build domain authority for startups’ own websites. To solve this problem, startups usually publish content on their own website first, and then on Medium, and at the same time, put the original article link as an authoritative link on Medium.

Be cautious when interacting with other communities

It is common for project parties in the crypto community to promote themselves in person. The project party knows very well that the Web3 ecosystem is interconnected and wants to use this to monetize.

There is nothing wrong with this strategy as long as it can provide added value.

At the same time, it is also necessary to follow the same principles as content education, which is to focus on providing value, rather than excessively promoting your own project, answering questions for everyone and helping them understand the concepts involved in your project, and taking this opportunity to establish a certain platform recognition.

In addition, while providing value to community members, you must also let everyone know which project you are from, such as adding your company after your nickname.

Pay-per-click marketing strategy

Once a startup company has obtained seed round financing, it can allocate a marketing budget and develop a marketing strategy.

Affiliate marketing

In the affiliate marketing model, the startup company will pay commissions to content creators to guide readers to visit its official website, and the commission can be linked to certain conditions.

The most typical practice is to pay the commission only after the user has performed a specific action (such as completing registration or purchasing behavior). For example, Amazon has adopted this model to encourage content creators to test products and share product page links on Amazon.

Affiliate marketing requires complex tracking to automatically attribute and pay commissions. Therefore, the publisher is usually a third party. Currently, there are few affiliate marketing technology providers focused on Web3. In any case, affiliate marketing is a good way to create sales leads, and mainstream brands such as Binance, Coinbase, and Kucoin have developed strong affiliate marketing plans internally.

KOL marketing

As mentioned above, this model is very popular in Web3 because it can quickly generate a large number of sales leads. However, this model may also have high risks.

Many startup companies try to adopt KOL marketing strategies too early and end up wasting a lot of traffic and budget. This is because they did not consider how high the overlap between KOL’s fan base and the brand’s own target customer base is.

Finding the right big V for cooperation is not easy and takes a long time. The strategy works best when the startup establishes a long-term relationship with the right “small KOL”. Paying a big V to promote your project may seem like a shortcut, but it is almost impossible to achieve sustainable growth.

Setting incentives

Another trick often used in Web3 marketing is to introduce incentive mechanisms to encourage users to participate in the project in some way. Incentives come in many different types, and which type to use depends on the project’s business model.

For example:

  • DeFi protocols can incentivize users to provide liquidity with interest

  • NFT projects can add users to the whitelist

  • L1 protocols can share a portion of transaction fees with users

  • Web3 gaming projects can create P2E economic mechanisms

Some incentive measures, such as incentivizing users to complete designated tasks on social media, should be used with caution. Ultimately, this type of marketing strategy is also a form of paid marketing. In addition, designated tasks can be easily completed by bots, making it easy for people to cheat. This will lower the quality of activities on social media and make it difficult to create any long-term network effects. The most effective way to use reward mechanisms is to reward loyal users of the product.

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