Performance marketing is something that’s been honed and refined in web2 marketing – especially by the F2P genre of mobile games. If the lifetime value (LTV) of a user is $5, it’s worth spending up to $5 in adspend to attract users. This is what allowed the flywheel of digital advertising and F2P to really spin up – with money that users spent in game being poured directly into advertising, which in turn drove more users. The pinnacle of this was King, the makers of Candy Crush, spending almost a half billion dollars on formats like Superbowl ads to drive user growth in 2015.
With a mobile game, the direct in and out is pretty simple – either users spend money on your app or they don’t. This is especially important as your direct costs (adspend) are also denominated in dollars.
Now with crypto it’s very different. Very few dapps directly monetize or drive revenue – instead, as a protocol you have other metrics for how you view the revenues.
The only ones that are really able to do this at scale are the crypto exchanges – Coinbase also spent almost a half a billion on ads with stunts like the moving QR code, or giveaways. Key to the discussion on moving people away from centralized alternatives is this – the ability to get the performance marketing flywheel going is key.
Since monetization is often done through a token (liquidity mining, or token sales), the objective metrics become different – especially as your expense is no longer denominated in dollars necessarily, and can be denominated in tokens.
So what marketing related expenses can you denominate in tokens?
Liquidity mining and airdrops, have been the only way to really get distribution using this superpower.
However, it's up to builders capitalize on the fact that the marketing doesn’t need to be denominated in fiat – however the genius with points is that this funnel can really be turned around and be put toward specific goals and metrics that aren't as blunt as a onetime airdrop or a masterchef contract.
Blur for instance can quantify the value that they spent bootstrapping the sell side of their NFT marketplace – and denominate it in tokens.
In other words – performance marketing is here in crypto, and it's up to the smartest builders to figure out the metrics and incentive structures to create playbooks that change crypto GTM – and points is just one side of that revolution.