Values Based Marketing: How to succeed by believing in something

Transcript

[Music] Hello. All right. My name is Amanda Casset and I'm the founder and CEO of Serotonin. Some of you may know me from a long time ago if you've been in the space a while, from when I was chief marketing officer at Consensus. from 2016 through 2019 uh and led the team that brought Ethereum to market. Today I want to talk about values-based marketing. How to succeed by believing in something which is a topic that's near and dear to my and serotonin's heart.

Going to start with a story. So this begins in the ZERP era. ZERP stands for zerointer interest rate policy which was the policy in the US and several other places during COVID. And what happened as a result was a huge amount of venture capital funding for crypto projects. I think 4200 or so projects got venture capital funding during this short period. A lot of them being layer 1's and layer twos.

So we have this huge amount of supply of blockchain infrastructure. Then if you want to use the graph of daily Ethereum transactions as a proxy for demand for blockchain apps and infrastructure as I'm using it here. You can see that there's been steady growth in demand. There was some demand increase in that period but there's a mismatch between the amount of startups funded which are going to need to compete for users and the actual much slower steadier uh growth in demand for these applications. So there's this mismatch between the influx of infra and

the actual user growth and that oversaturation leads to a pitched field against project interests where they depend on ongoing venture capital funding uh to keep projects going and those VCs are looking for specific metrics in order to keep funding those projects. And then they need access to distribution and during this era the centralized exchanges really uh had captured and cornered access to distribution. So projects needed to uh meet their requirements of VCs of centralized exchanges in order to be

successful. And there was also a regulatory component here. folks were worried about launching ICOs and so centralized exchanges could really capitalize on that and that meant that those with that lock on distribution and on capital were able to redirect what the goals were for projects and those goals weren't necessarily the same ones as the projects incentives. So for VC, their incentive is to or has often been to um get the project to their TGE. Um, and for the centralized

exchanges, it has been to optimize for followers on X, number of community members on Discord. And because of that mismatch between the supply of infrastructure projects and the steadily growing but not quite as spiked demand, there ends up being an incentive to fake user numbers. Um, and we at Serotonin and end end up seeing that a lot. Um, we'll see projects come in that clearly bought followers. We'll see projects that want to grow organically competing with folks that have clearly um bought followers or Discord community members.

Then there's the incentive um by these centralized folks to um have projects do these big airdrops. And the airdrops often work to the advantage of the centralized exchange which gains new users even if most of those users immediately sell and don't actually become long-term community members or supporters of that project. So we get this warp of highlevel goals and metrics that ends up warping the the marketing and the field of play for projects.

And that complex has really led to the modern Airdrop. And this is an example from Zora, which we ran um an extensive onchain analysis for. But the reason I'm using it isn't because of them in particular, but because this is a pretty normal um occurrence. This chart is something that we see a lot. Um, so after an airdrop, we see over 80% of wallets immediately churn out and what that means is pretty poor capital efficiency for projects turning this marketing mechanism of an airdrop into what the project actually should and

does care about, which is that long-term sustained user growth, which can be measured on chain. And you can see here there's actually a slight net decrease from before to after the TGE in the number of active wallets. So only.7% of the recipients of the airdrop actually went ahead and bought the token after. And that's fine for the centralized exchanges because that's a lot of wallets that might have created new centralized exchange accounts in order to sell their tokens. It might even be fine for VCs who were able to sell their tokens. But if you look at

this chart as a marketer, it's a pretty bad marketing campaign ROI for the project itself, especially when you compare it with the kinds of marketing campaigns that we're used to and that we like to launch. And so I want to suggest a way to oh that was supposed to be moving. Um I want to suggest a way to unwarp the actual high-level northstar goals and incentives for projects to be aligned with what the project actually cares about which is its long-term metrics and success.

So the metric and the formula that I want to suggest here for measuring actual retention as opposed to vanity is something that we call CPRW cost per retained wallet. And the way to measure CPRW is total spend. So, the amount that you spent on the campaign divided by the number of retained wallets at and after that 30-day mark. And we've developed this TGE scoring engine at Serotonin for understanding how different projects perform at launch day and in that month after. Um, in

order to actually achieve the project's goals, we've developed a type of onchain marketing that we call wallet aare marketing where we can use our stack to track attribution of a campaign all the way through to onchain activity. Um, and we've built a really robust onchain data and analytics practice in order to uh fully track that cycle and to generate these scores. So for a CPRW, what you want from a campaign is to be able to retain wallets for under $20. Um, and you're constantly driving down that

number. Here's how this aligns with with values. So, it's not just about projects discovering here's what I value. Here's here's what matters to me. It it's partly that but it's also about taking back the macro value of okay what matters to my project and what matters is that long-term sustained user growth which can be measured in onchain data and analytics as opposed to metrics that are coming at you from other places uh from groups of people with other incentives. So there are really four steps to this. The first is coming up with what those values are.

translating those values into what we call knife's edge messaging. So figuring out exactly where those values are the most mimemetic and can be translated into a visual and verbal package that's going to actually work really well, be memorable differentiated. And then we are the media now, right? All of these campaigns ramify on X and the short form video narrative uh creative campaign on X is something that we've been seeing a lot of success with.

Um X is upstream of everything at this point. If you launch a print ad, you're launching that because you want people to take pictures of it to post on X. If you have a an environmental activation, you're activating in order for people to take pictures to post on X. Everything really ramifies on X if you're trying to target the crypto community. If you're targeting mainstream finance, Tradfi, that's different. Um, but that's what we've really found that these creative campaigns have great um ROI. And then you're actually measuring how that campaign translates into CPRW using wallet aare marketing and a stack that

lets you actually do that measurement. So let's talk about the steps to executing this. Um I'll start with so this is a quote from um Colonel Sers who's a character from the Gilded Age by Mark Twain. Um and my joke here is that he's the OG crypto Twitter KO. Um, I never push a private interest if it's not justified and enobbled by some larger public good. Now, this is kind of a cynical character from that book. He's the characteristic um stock hype man, but if you think about it, every big bubble um valuation has been based on some kind of car charismatic nar

narrative. Um, if you think about it, every big um, brand has been based on a charismatic narrative. If you think about Nike, just do it. Um, and if you think about how you run your own exac account, you're much more likely to talk about something that aligns with your values and what you care about to help amplify it than something that's purely shilling, some kind of token for for someone's obvious uh, direct gain. So you can think about it altruistically or you can think about it a bit more cynically like Colonel Sellers, but it benefits your project to figure out how you align with a larger mission that you

believe in and that others do. And how to go about that is starting to think about what you and your project believe and how that intersects with what everyone else in your target audience believes. And there's some kind of ven diagram of overlap there. We do this all the time with founders. And where you want to go with your knife's edge messaging, how you want to translate your values into that messaging is figuring out what you believe and what you have conviction in that's the most uh divergent with what everyone else thinks. And you want to state that uh emphatically, mimetically, and figure out that perfect formulation for how to tell that story. So, this is something

we've done with a number of our clients and partners. Just to run through a couple of examples of that, we worked with um M0. They are democratizing creating stable coins so that anyone can do it. And we're thinking with them, what do you believe um that others don't? And what's a really beautiful formulation for that belief? And we got to this phrase, everything is a bank. And that's been performing really well so far. People have been excited about it. Idea being if everyone is holding uh everyone can create a stable coin, everyone's holding currency. Um is Apple a bank? Is Starbucks a bank? Um and that

seems to really resonate with people. We extended that campaign um into some more copy for social. And then um another another one of our projects and this one is super cool supported by uh Alliance Dow. They're tokenizing US real estate on the blockchain. And so we thought and this was around the time of the election. What do you believe that's the most divergent from what everyone else believes and what's a really charismatic formulation of that? And so we came up for them um their values-based marketing translated into Knife's Edge messaging is Bet on America and we built a campaign around Bet on

America um for manifest that had a bunch of different pieces. These were really funny. Um, and it's cool because these kinds of projects, these campaigns, they translate into CPRW and they also solve for the cold start problem because they immediately create uh a storytelling narrative campaign that other people are excited to talk about and help promote and share. Really kind of adding value to that timeline. Um, we had another project we worked on um with Lrangee.

there an AI prover and we're thinking you know what's what are your values what do you believe in how does that diverge from what other people think and um we realized they believe it matters to prove that you're human so we came up with this game um touring roulette some of you might have played it I think half a million people ended up playing this where you go head-to-head against either another human or a machine and you have to decide whether you think it's a human or a machine. And this uses Lrange's AI proving engine.

This ended up getting them a ton of reach and solving that start problem. Um, and also adding a really fun game, an exciting experience for people that brings across those values and that knife's edge messaging and translates it into that campaign with that potential to drive CPRW that's measurable. So to summarize, a set of circumstances that began with the Zarp arguably um started warping incentives in the space such that projects lost control of their highle goals. So it was other people setting those goals that weren't necessarily aligned with the long-term growth of

projects and with those projects capital efficiency when they're doing marketing. um even though it led to a fair amount of short-term capital efficiency and outcomes for some VCs and centralized exchanges. So my contention here is that the situation has actually changed in terms of control over capital and distribution. We're seeing the return of the ICO. Another one of our partners, Plasma, recently raised uh 500 million in an ICO. Um, and there are platforms now like Echo, Sonar uh for people to uh actually go ahead and ICO uh in that

way. So there's no longer that lock centralized lock on fundraising. Um we're also seeing a lot of uh parody between the deals that retail is being offered for successful projects. uh and VC. So, we worked with Fogo recently and it was really successful when they announced that the folks that bought into their token sale were getting the same rate as the VCs that had bought into their last round. Um and so that kind of transparent egalitarian um messaging uh and and strategy that matches up retail with VC instead of creating that pitched playing field

that's definitely coming back into vogue. So we actually have a new circumstance now where there's no longer that control of capital and distribution. We're seeing um ICOs come back um and we're seeing more parody between what retails offered and what VCs get. And the result is that projects can take control again of their northstar goals. Um starting with what they value, what their project values, they can take control of the metrics that they're measuring. So by measuring CPRW, you're taking steps toward the ultimate form of achieving freedom and autonomy, which is revenue and profitability

because once you're a profitable uh company, your capital dependence, your distribution dependence, that has gone down a lot. And so this is a this is a meme from um from the White Lotus that I captured. I don't know if any of you remember this moment, but it's a it's a call to consider um with your own project, what what do you stand for? What are the values of your project? How can you take back control of your project's goals, your campaigns? And also for players like centralized exchanges, VC as well. Um, I think all of us have a better outcome if we believe in the real long-term growth of

the space. Because if we believe in that, then our incentive isn't to try to parasitize the existing user base. It's genuine growth and long-term growth for projects. So, I'm CEO founder serotonin. Mentioned that earlier. Um, we have been doing a lot of this work. We've been building a really robust um, onchain data and analytics practice and pairing that with creative campaigns. If that's something that interests you and your project, please get in touch with me. My info is there. We're also hiring. So, check out our website. All of our jobs are listed on there. And, um, please get in touch.

Would love to hear from you. [Music] [Music]