One thing I’ve found interesting during my time in this space is the concept of vampire attacks. What is a vampire attack?
Count Von Count hitting where it hurts
As it pertains to crypto, it seems the term ‘vampire attack’ was popularized in Fall 2020 from DeFi. TLDR?
Uniswap was (and still is) one of the largest DeFi platforms for swapping crypto, with an open-source protocol for anyone to fork and build off of
One enterprising developer, Chef Nomi, forked the Uniswap protocol to create another DeFi platform: SushiSwap
To bootstrap liquidity ($) to Sushi, Nomi provided $SUSHI token rewards to users that provide liquidity to the new protocol. In order to qualify, users had to deposit their Uniswap LP (liquidity pool) tokens to SushiSwap.
As a result, SushiSwap bootstrapped its liquidity off of Uniswap and quickly became a large player in the DeFi landscape
There’s a lot more to the story, but we’ll leave it at that in terms of what’s relevant to vampire attacks.
Blur did their own version of a vampire attack in Fall 2022 with their multi-phase airdrop campaign.
The first phase of Blur’s care package airdrop was based on a wallet’s NFT trading volume over the past 6 months, and most trading volume up to that point was done on Opensea. In order to claim the first round of care packages, users had to list a NFT on Blur’s marketplace.
Blur rapidly gained market share as word of the airdrop spread, and Blur has become the dominant player in the ETH NFT space ever since.
The concept of vampire attacks aren’t limited to crypto or NFTs either, although they aren’t called that. Marketplaces incentivize liquidity through promos and reduced fees, with a good example being sneakers. During the holiday season last year, eBay ran a promo for sneaker sellers offering 50% off seller fees for any new listings of $150+ from 12/16- 12/22. Just in time for Christmas!
Rideshare and gig economy platforms like Uber and Doordash also employ promotions for drivers to ensure the health of their marketplaces. These incentives are as much an offensive strategy (acquire drivers from competitors) as it is defensive (complete X rides or deliveries to earn your bonus to establish the habit of driving for that marketplace).
Vampire attacking in the advertising world is known as conquesting. One prominent version of this is with search ads — Competitors leverage search intent and pay to insert their own ads with the goal of capturing new consumers.
So, why am I bringing this topic up all of a sudden?
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Outside of the SushiSwap/Uniswap example, none of the examples were explicit or direct.
For example, the eBay promotion is targeted at StockX or GOAT sellers, but doesn’t explicitly state that.
You can argue that the Ashley Furniture search ad example is explicit, and it is with the competitor brand term targeting. However, it doesn’t go to the degree of something like ‘show us the Ashley Furniture item you plan to buy and we’ll beat the price by 20% with free shipping’. Also, the vampire attack is facilitated by an intermediary platform, Google.
Why doesn’t eBay directly target StockX or GOAT sellers? Why doesn’t adidas run a campaign that explicitly targets Nike sneaker wearers and offer a free pair of adidas sneakers for each pair of Nikes that are redeemed?
Maybe it’s because it’s distasteful, making it hard to successfully execute.
Maybe it’s too risky, who knows how consumers would react to such a campaign?
Maybe it’s because there’s an unspoken agreement between all CMOs that you can’t do this type of explicit ‘vampire attacking’.
Maybe because mavericks like Steve Jobs (RIP) are rare and no one has the guts to run ad campaigns that call out the competition, which is traditionally considered taboo.
Calling out the competition might be considered a dirty play, but Apple’s ‘Mac vs. PC’ ads did numbers. I imagine if this happened in 2023 it’d go mega-viral.
Maybe (probably?) it’s because I have selection bias and explicit vampire attacking is actually happening everywhere. I’m just stuck in my little web3 bubble.
Over the past couple weeks, there were examples of this type of vampire attacking that popped up on my radar from the loyalty space. Looks like the gloves are coming off and folks are getting desperate 😏
Peet’s Coffee
Blake Menezes shared that Peet’s launched a Disloyalty Program to target coffee drinkers that had rewards accounts with competitors.
In order to qualify for a ‘Disloyalty’ beverage reward, users had to create a Peetnik Rewards account and upload a screenshot of their account from a competitor’s loyalty app.
Great start, but..
It’s hard for me to imagine that this campaign was a success outside of a short-term vanity metric spike in Peetnik accounts created and app downloads. I’d love to see some data to prove me wrong…oh wait there isn’t any public data since this isn’t crypto/web3, nvm.
Why is there just one free drink? There should be a mechanism for multiple redemptions to drive habit-forming behavior. There are two steps needed for the program to really work. 1) Breaking the habit of the original loyalty program and 2) establishing the new habit of the Peetnik Rewards
Users qualify by uploading an image, not a great verification method. If only there were a better way…
Delta
Last month, Delta Airlines changed some parameters to their SkyMiles loyalty program. I only heard about these changes while reading Robert Glazer’s Friday Forward a couple weeks ago.
TLDR response to the loyalty program changes?
Delta’s CEO has since announced that they would revisit the changes, but the damage has been done, leaving loyal fliers in a state of uncertainty.
Who was waiting in the wings (heh), doing some damage control in the form of timely vampire attack? jetBlue
This effort seems to be a step up from the Peet’s campaign with a verification process and a longer window to take advantage of the offer.
A couple months ago, I wrote about the future of loyalty programs and where I think they’re headed (spoiler alert: onchain).
If loyalty (or certain components of it) moves onchain, we’ll be seeing a lot more explicit variations of vampire attacking occur, creating a more competitive loyalty ecosystem that ultimately champions the consumer and their interests.
Account verification and targeting become deterministic instead of spray-and-pray or probabilistic, resulting novel offensive (vampire attacks) and defensive (retention) strategies. Some simple examples:
Peet’s Disloyalty Program 3.0: Hold at least one Starbucks Odyssey Stamp, and qualify for early access to Peet’s web3 loyalty program.
Mosaic on the chain: (If the programs were onchain). Swap your Delta status for another airline. The swap would incur a X% monetary fee that Delta would collect and either the user pay for or JetBlue would subsidize. It sounds counterintuitive for a loyalty program to be ok with losing a user, but if a user is already one foot out the door, why not capture that last bit of value.
Loyalty moats: Brands counter vampire attacks through dynamic onchain offers and loyalty alliances (this concept exists in the airline industry already). Get loyalty or bonus multipliers if you transact within an alliance or stake your points.
It’s possible that some of these novel competitive loyalty models end up being unsustainable, which would then revert to a more sustainable mean for all parties involved.
While doing some research, I also stumbled across a piece by the a16z crypto team about vampire attacks published earlier this year, and they seem to agree that vampire attacks have the potential to create a net positive competitive environment.
So for now, I’ll be waiting for some great offer because of what I hold in my crypto wallet.
See you Thursday!
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