In the world of Web2, the MarTech industry comprises a wide range of CRM software and data analytics specifically designed to aid teams in augmenting growth.
Tools like Salesforce, MailChimp and Hubspot facilitate structured processes for demand generation, acquisition, retention & engagement analysis, conversion tracking, and revenue optimization – the foundational pillars of success for consumer internet businesses.
The importance of the MarTech category is evident in its extraordinary growth, with the number of solutions now reaching 9,932, representing a 24% increase from 2020, OR a remarkable 6,521% growth over the span of 11 years!
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So, what about Web3 Marketing?
Despite the exceptional capabilities of these tools, they are currently unwilling or unfit to serve Web3 products due to various reasons such as regulation or data granularity.
Moreover, technologies and data in the Web3 space remain complex and inaccessible to the average consumer despite their transparent nature.
The process of accessing and indexing data is still daunting, involving high costs and extensive efforts, along with the technical expertise required to navigate platforms like Dune and Flipside using SQL.
Consequently, Web3 marketing managers often operate without complete visibility, putting them at a disadvantage in the competitive landscape of online user attention.
In today’s landscape, it is common to see teams relying on repetitive methods to incentivize their users, such as social media follows or retweets, and offering giveaways or LP incentives. Nevertheless, these approaches may not yield authentic engagement at the product level, and users may not have the incentive to actively utilize or thoroughly explore them.
As a result, this could lead to inefficient spending of financial assets and human effort.
While teams may clearly understand the type of users they want to target, their options for reaching them may be limited, and the lack of available infrastructure can impact the precision of their strategies.
Lessons from the 2020 Uniswap airdrop on user retention
An older, yet relevant example we could refer to was the Uniswap airdrop on September 17th, 2020. Tokens were given to 250,000 addresses that previously interacted with the protocol.
More than 75% of wallets disposed of the token within the initial 7 days, followed by an 80% sell-off within the first 30 days, and 85% within the first 90 days. Presently, 93% of the initial recipients of the airdrop have sold all of their UNI tokens.
During the airdrop period, a considerable portion of the platform’s active user base comprised the recipients, contributing to approximately 40% of the weekly volume and 60% of the active traders.
However, this percentage experienced a significant decline in the subsequent six months, dropping to less than 10%. About one year after the airdrop, the percentage further decreased to 5%, and has remained in that range since then.
Users were disengaged, and there were no viable alternatives to effectively target them in the past.
One can probably safely assume here that in order to tackle these challenges, it is imperative to have solutions that effectively link user attributes and bundle ‘ideal’ wallets together based on protocol requirements.
These solutions should also feature user-friendly frontend interfaces, enabling marketing managers without coding knowledge to effortlessly access various data points.
Protocols can then swiftly profile their ‘ideal’ users and utilize this information to incentivize their target audience. With faster on-chain activity aggregation, protocols can leverage different wallet characteristics to incentivize new forms of contribution.
And fortunately, some teams are already working on solutions to address these areas in the crypto sphere!
Introducing the Web3 Growth Stack
Growth Stack tools, such as Layer3 and Merlin, are making great progress in experimenting with innovative solutions to target entry-level behaviors.
They are designed to enable teams to effectively target specific user wallet attributes and achieve better incentive alignment with users through their marketing campaigns.
To further illustrate the impact of these tools, let’s consider Layer3’s quest expansion. This feature allows teams to offer missions for their users while providing more context and narrative around bounties, resulting in a higher likelihood of acquisition success and an overall richer user experience.
Additionally, the greater flexibility in allocating rewards further unlocks the retention layer, as teams can now fine-tune user participation and engagement to align with incentives.
By offering tailored experiences for users, teams are now able to effectively penetrate their target community and reward desired actions.
As we continue to witness the experimentation and growth of crypto applications and consumer-facing products, the importance of growth tools cannot be overstated, as they play a crucial role in achieving success. Proactive and relevant marketing campaigns are key to building customer affinity and encouraging repeat usage.
Acquiring customer data is also just the beginning of the flywheel; the real potential lies in protocols having a deep understanding of their customer base, which opens up limitless possibilities. With the availability of data, Web3 teams can better leverage it to target their end-users accordingly, thus positioning themself to best capture the attention of the next wave of on-chain users.
Also Read: Here’s How Blockchain Can Fix Bank Runs
[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]
Featured Image Credit: Forbes
This article was written by Jowella and edited by Yusoff Kim