The challenges and benefits of marketing DeFi in Web 2.5

Defi is one of the foundations of web 3.0, the next generation of the internet, but defi vendors today often struggle to successfully promote their next-gen products in an internet that isn't yet ready for them. 

What is web 2.5?

Web 1.0 refers to the original internet, with static pages and no interactive content. Web 2.0 is the social web, full of user-generated content and social media platforms. We love it for its personalization, but dislike the way that mega-corporations have control over our communications and content.

Which is why web 3.0 is rapidly traveling towards us with a vision that is more than augmented reality (AR) and the metaverse. It's a decentralized web that takes power away from the middlemen and returns it to creators and consumers (think of the journalists selling subscriptions to Substack newsletters, instead of posting on their blog and letting Meta or Google use their clicks and views to sell ads). 

Web 3's foundations are the transparency of blockchain, together with cryptocurrency, NFTs, decentralized finance (DeFi), and decentralized autonomous organizations (DAOs). But while the building blocks of web3 are here, we aren't living a web3 experience. Hence the term web 2.5. Mat Dryhurst, technologist, lecturer, and web futures researcher, explains “I use 2.5 in this context because I believe Web 3.0 will inevitably eclipse those services. So in that sense, I use Web 2.5 as a transitional term.”

The challenges of marketing web3 products in web 2.5

Like most transitional periods, web 2.5 is messy and unclear. This throws up many challenges, but particularly for defi companies trying to advertise web 3 products in a web 2.5 world. 

Social ads are restricted

Targeted ads, tracker cookies, and data-based advertising are an integral part of web 2.0, and can be highly effective for crypto and defi projects. The trouble is that platforms like Google, Facebook, and Twitter have a hedge of regulations around which companies can use their ad networks. 

Unless you have a license and meet other requirements, you won't be able to tap into their vast data vat, and if you accidentally cross the line, you'll risk being flagged and/or having your account blocked, which cuts you off from your audience entirely. All of today's most popular and efficient advertising platforms are walled gardens, and you can't get in unless you have the key. 

Influencer marketing is a fine line to tread

There are many crypto-bloggers and blockchain influencers who make excellent collaborators for promoting your defi project, especially if they are able to communicate complex issues around the tech in a way that's easy to understand. YouTube, Instagram, and TikTok are increasingly popular for defi marketing.

But the same issues apply as for social ads. If the platform decides that you (or your partnered influencer) has broken their rules about web3 products, you'll lose your connection with your audience, together with all the data you've carefully collected. 

Crypto websites are highly fragmented

Crypto-based advertising networks like Coinzilla are an obvious choice for defi marketing. Your ads won't be blocked or limited to a smaller reach, and the audience is likely to already be interested in blockchain-related projects. 

Plus, these networks are transparent, thanks to their blockchain roots. You'll enjoy unimpeded access to all the data you need about how your ads are performing and how the target audience is responding. "Banner campaigns on platforms such as Etherscan, CoinmarketCap or Dapp provide you with pretty much the same [as Google ads]. You can adjust regions, Impr period, own design," says Serge Baloyan writing in HackerNoon. "The blockchain is about transparency. Banner campaigns on mentioned above services can provide you with transparent results. You will see the CTR, number of Impressions and GEO statistics."

The downside is that there's no centralized crypto advertising board. Each network has its own policies and pricing, so you'll need to reach out to each individually. You can't easily compare or analyze them to see which is the most effective.

What can you do to succeed at defi marketing?

1. Diversify your platforms 
   
   There are more ways to reach your target audience than web 2.0's walled gardens, and you should be using as many as possible. That includes Brave, a browser which rewards users with BAT tokens for accepting ads. You should also register your defi product on blockchain product databases and defi trackers like Defipulse, Defiprime, Coinmarketcap, or CoinGecko. 
   
   Niche channels like Telegram and Reddit have large user bases interested in blockchain. This is where your educated and informed audience hangs out, and where they turn to seek more information about your company and solution. 
   ‍
2. Maximize customer data
   
   Data is fuel, so your marketing needs to optimize not just exposure to your target audience, but also access to customer data. The better you understand their preferences and responses, the better you'll be able to refine your marketing strategies. 
   
   Unlike web 2 platforms, web 3 networks cut out the middleman and let you own customer and ad performance data. Other financial advertising is bought and sold on brokerage accounts with little transparency, but advertising on blockchain-based platforms is fully visible and trackable. 
   
   Tools like walletconnect, an open source protocol for secure direct communications between wallets and dApps, open up another source of customer data by tracking customer wallet activity.
   ‍
3. Build your community 
   
   We're still in the early days of defi, so for many people such projects are still mostly a mystery. By educating people about web3 in general, you'll be able to build your own community which will then become a natural market for your products. 
   
   As long as you stick to informational and educational posts, you can build such groups on social media. A Coinzilla study found that the top communication channels for crypto projects are Twitter, Facebook, Telegram, and  Linkedin. 
   
   Make announcements about product releases and partnerships, explain new updates, and share insights about how the new web is evolving, to establish your brand as a thought leader.
   ‍
4. Make your tokens desirable
   
   Once you launch your defi product, you'll need to make sure your tokens entice people to want to engage and buy into your platform. The right social tokens give customers a way to show their loyalty, encourage people to promote your content, and help you build a community. 
   
   Since the tokens are based on blockchain, they also become a source of customer data as you track how, where, and when they are swapped and use them to monitor your brand's performance. 
   ‍
5. Find a guide
   
   All the above activities can be time-consuming, confusing, and difficult to manage, especially when you aren't yet experienced in the ecosystem. You'll save a lot of time and frustration if you find a guide who's experienced in the intricacies of defi advertising, has already brokered relationships with web 3 platforms, and understands the policies and requirements of web 2.0 channels.

Defi marketing isn't out of reach

Although there are still obstacles in the way of marketing a defi company, it's possible to overcome them all when you find the right platforms, strategies, and support to make the right decisions.