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KEY HIGHLIGHTS

🧗  How blockchain aids performance marketing

📁 Wallet ids that make user id private

▶️ How are ads shown to different users

🧳What the user experience looks like

🍎Brands that are already a good fit for wallet ads

⛳️Tackling the risk of spamming

💰What the costs looks like when going for blockchain

🧨The risk of poor retention

🖥The scope for a backlash due to privacy concerns

KEY QUOTES

Blockchain data privacy complexity

The good thing about blockchain data is, it’s public. It’s public data, but at the same time, it’s private somehow, because of who’s behind a wallet ID, and everything a wallet owner does is publicly stored in the blockchain.

What blockchain looks like in performance marketing

You can basically upload the image, like a mini clip, you can define your marketing message, and then you can drop this message directly into the wallet of your future customers. 

How an ad would appear in a user’s profile

 To give an example, it would be a coupon or benefit directly in your shopping basket. This is a good comparison to understand what this will look like in the Web 2 world. The trick here is targeting and in the best case, also any kind of utility, any added value of the development.

How apps are incentivizing users to invest in web 3

Another example, where I think the utility is nice is the running app Stepn. It’s an environment from the app business. That means if you walk or run outside, you get coins for your run. But you need to be eligible for earning coins, you need an NFT sneaker. You need to buy them and once you have a few, then you are eligible to start earning the coins. And I think this direction, it’s a nice way to incentivize people to get rid of their laziness. 

Dealing with the spam problem

From my past experience spam becomes a problem on almost every digital channel. So that’s for sure. I think spam is already a huge topic in the NFT and crypto cases. However, we think the fees will prevent at least a little bit of the massive spam waves from that because you have to pay for sending this. If you have to pay for something, there are some obstacles there by nature. 

You can’t always be discreet with blockchain

Blockchain isn’t so easy to control. But it is public. If you have something to hide, maybe you stay away from that, or you stay in the offline world. 

FULL TRANSCRIPT

Shamanth 

I’m really excited to welcome Tobias Boerner to the Mobile User Acquisition Show. Tobias, welcome to the show.

Tobias

Hi, thanks for having me. 

Shamanth 

Excited to have you, particularly because of the topics we’re going to talk about today, which is something I’m very, very fascinated about. I’m sure a lot of people are curious about it. Web 3 crypto is a bit of a buzzword, very much in the zeitgeist for a while now. 

What I think a lot of people are curious about is how growth marketing, and performance marketing is going to work and operate in that paradigm. It’s certainly something you’ve had a lot of insight and experience around. So I’m excited to dive into all of that with you today.  

Let’s start with the basics. Can you help us understand in what way the blockchain as it’s constructed, or as it’s architected, enables performance marketing for Web 3? What’s the sort of data available that makes performance marketing easy or viable for Web 3? 

Tobias 

From our point of view,

the good thing about blockchain data is, it’s public. It’s public data, but at the same time, it’s private somehow, because who’s behind a wallet ID, and everything a wallet owner does is publicly stored in the blockchain.

Now it’s time to combine our marketing expertise from the Web 2 world with the Web 3 world. There are a couple of awesome opportunities. Today, the data for a performance marketing campaign is very similar to what the marketing managers know. For example, the activity of the wallet is a key data point. 

We’re available to credit in the wallets. It’s a good indicator of, in general, the buying behavior and the interests of the recent bias. And that key is just an example of a dataset that we use for us for optimizing a campaign towards performance.

Shamanth 

 What you’re saying is because the blockchain has public data, it obviously doesn’t have my name, but it still has wallet IDs, which you can query to understand what’s the balance in the wallet, what has the performance and the purchase history been and that can basically tailor offers to people. 

Tobias 

Exactly.

Shamanth

From my understanding, you are also able to say, this particular wallet made purchases of such and such NFTs, has such and such a token balance. Are you able to identify users at that level of granularity as well? 

Tobias

If it’s stored on the blockchain, we have access to everything now. 

Shamanth 

Got it. Let’s assume you know and understand users’ transaction history, you understand whatever is in the blockchain. What happens next? How does that get used for actual performance marketing? What’s the mechanism by which you show ads to these people?

Tobias 

Let me describe the platform and how this will look for a performance marketer.  It’s a sizable platform. So

you can basically upload the image, like a mini clip, you can define your marketing message, and then you can drop this message directly into the wallet of your future customers. 

By doing so, you can store them, or restore the wallet ID to make proper tracking afterward to see if the wallet in the future will do something after you drop the message. This also helps for very accurate reporting. You have to understand what drives performance, and if you can make a very good match afterward, then you probably need no clicks for that. You just match the IDs.  

Shamanth 

Is this different for different blockchains, like Ethereum or Solana? How does this vary according to the different blockchains? 

Tobias 

 It doesn’t matter which platform it is. But what matters is, of course, the fee.  If the price of what you have to spend drops, then it makes the most sense to use a chain which does not have super high fees.

Shamanth

Which ones would those be? 

Tobias 

In our case, we are using the Matic tokens to send out the drops.

Shamanth

Across a blockchain, your algorithm’s noticing these are the users that have a certain type of performance history, transaction history, let’s drop these ads into the wallet based on what we think could be the affinity. Obviously, you’re still paying the fees but hopefully, that’s not insane. For the end user, let’s just say I’m the end user, you decide based on my transaction history, you will show an ad or a message to me. What does that experience look like for me?

Tobias 

The ad looks like a typical NFT. If you already have a few in your wallet it should look very native. In the ideal world, it also has a nice utility for you.  It will land directly in your digital crypto wallet.

Shamanth 

So I would see an alert or an image in my wallet.

Tobias 

Exactly.

To give an example, it would be a coupon or benefit directly in your shopping basket. This is a good comparison to understand what this will look like in the Web 2 world. The trick here is targeting and in the best case, also any kind of utility, any added value of the development.

Shamanth 

Sure. I know the last time we spoke, we did talk a bit about utilities. Help us understand what that means. I can also preface that by saying, I think that NFTs have a bit of a bad rap like, it’s just a JPEG that nobody cares about. Some people kind of make fun of that. 

Therefore if you’re like, oh, okay, I have a wallet and you’re sending me a free NFT and it’s just like a JPEG, it doesn’t make sense. 

I know you said, hey, the NFT has to have some utility when we last spoke, can you explain that? To help people understand what the value to the end user is because it’s not just going to be some JPEG that’s sitting in my wallet.

Tobias 

This really depends on the message of the advertiser. Normally in Web 3 it’s all about access to something or a utility that has something interesting to the wallet owner. I think it’s fair to say that a price reduction could be a utility and also a discount or a gift. 

I think recently Starbucks announced something about that. The coupon business in the Web 3 world is huge.  I’m 100% with you, if we are talking about just a simple JPEG, this can’t be the end game. So now it’s on us also to develop the future of those kinds of ads and make them very attractive to the wallet owners. 

Shamanth

Yes. I think coupons are a good analogy. I know you mentioned Starbucks, but are there other companies or brands that you feel are doing a good job of defining a utility in a way that isn’t just like, oh, this is just a jpeg? 

Tobias 

Yes. There are a lot of leading brands out there who are jumping now into this environment. Personally, a brand I really like is Adidas. They have an awesome NFT collection with exclusive access to streetwear, which is a good sign that big brands are jumping in this direction.

Another example, where I think the utility is nice is the running app Stepn. It’s an environment from the app business. That means if you walk or run outside, you get coins for your run. But you need to be eligible for earning coins, you need an NFT sneaker. You need to buy them and once you have a few, then you are eligible to start earning the coins. And I think this direction, it’s a nice way to incentivize people to get rid of their laziness. 

Shamanth 

Yes. The way you’re envisioning this is maybe Stepn or Adidas could drop an NFT inside a user’s wallet and say, “Hey, here’s a free sneaker NFT, and if you sign up, you can continue to move to earn,” and that could be the potential offer. 

Tobias 

Yes, this is also something like what we have already on the sides of the platform of wallet ads. The people at companies have already a very big chunk of customers saved in their own data set. They can upload this to the system and automatically distribute a message to the customer. 

So this is kind of a MailChimp for the NFT space, and you can start communicating with your crypto guys. In the crypto world, you will not have an opportunity to send them a push notification or an email. Not to everyone. Maybe you can combine it with your data set. But I think that in the near future it makes a lot of sense that you can use your wallet and ID to log in to something. 

That you just have your wallet for the logins and you don’t sign up with your email and with your mobile phone number and stuff. I think there are already some changes ahead of us.

Shamanth 

Yes. I think it’s a good analogy to think about this as a CRM for Web 3, if you will. What you’re describing as much as it is about, you could sell advertising to a completely new user, but you could also advertise to your existing user base if you have that information, their wallet IDs. 

When I think about this model, one of the things I wonder about is that obviously, this is somewhat early days, but that could be the risk that a lot of advertisers will spam users’ wallets. 

Yes, there are folks that have somewhat intelligent utilities like Adidas and Stepn that you talked about, but there’ll also be a lot of people that just say, here’s a JPEG. So is there a risk that just users are going to get spammed?  What do you think about this risk? 

Tobias

From my past experience spam becomes a problem on almost every digital channel. So that’s for sure. I think spam is already a huge topic in the NFT and crypto cases. 

However, we think the fees will prevent at least a little bit of the massive spam waves from that because you have to pay for sending this. If you have to pay for something, there are some obstacles there by nature. 

But what we have already built in our campaign planner, is that ads get automatically deleted. They can’t stay forever. The function is directly integrated into the smart contract to run live automatically for all live campaigns and brands can choose between 7 days, 21 days, and 90 days. I think it’s very important to have this proactively on the agenda and a block function as it’s important that you can upload the wallet IDs they have to block. We believe that the “unsubscribe” option is something customers are looking for. 

Shamanth 

Yes, on any digital platform, spam is definitely something you need to account for. I’m just reminded about Facebook Canvas ads and games. I would go on Facebook and see here’s a cow, here’s a house, here’s a pig from a lot of the farming games and then oh, there’s spam. Obviously, Facebook clamped down on that immediately and they said they were going to put limits on the kind of viral invites you can send at a platform level. They did some regulation but it sounds like it is going to be important to regulate this in some manner. Obviously, as you said, the gas fees offer a natural barrier anyway. 

Out of curiosity, the gas fees are something you can quantify just roughly. Let’s just say if I needed to reach, let’s say, 1000 people using the wallet ads that you’re talking about, what’s the level of gas fees you’re talking about here?

Tobias 

It’s different from day to day, they are changing all the time. It’s not so easy to answer, but we put this in the CPM calculation as an additional price point.

Shamanth 

 Yes. But is there a ballpark?

Tobias 

It was not too expensive. I have no exact numbers in place, but I think for 1000 senders it’s around €100. It is based on CPM. It’s very hard to give an average because it’s really hard to ask what we are choosing.

Shamanth 

And there can be variables around the gas fees. This also makes me wonder, what are CPMs one could expect if they wanted to reach people via this model. And how do the CPMs compare with the web 2 worlds? 

Tobias 

Right now we are in the testing environment, and what we can see so far, it’s approximately 40. If we go prod in the markets approximately around 30 to 40. 

Shamanth 

Okay, and if it’s much more targeted, what would that look like? 

Tobias 

It’s around 80. 

Shamanth 

Yes. You did say this can be much more targeted. So the value is in the downstream metrics, based on how highly targeted some of these are.  

The other aspect I wonder about is, if you’re air dropping NFTs into somebody’s wallet, if you’re just sending me a Stepn or Starbucks NFT, saying, hey, check out Starbucks, here is what it is, you’re offering me an incentive to try the brand. 

The obvious parallel I can think of is that this can seem like incentivized ads and Web 2. If my experience has anything to judge this by, the retention is terrible for incentivized ads across verticals that I have seen. Is that a risk that users are just engaged with the ad just for the incentive, then they just run away? What do you think about this particular risk? 

Tobias 

I think you have to split between the incentivized traffic, if you get something if you do something, this is what I know. 

In the mobile environment, for example, if you download an app and you get 100 credits somewhere, these customers have very bad retention. In this case, you get it without doing something, and then it’s on the advertiser’s side. 

I’m sure there are very creative advertisers out there, they will come up with the right ideas and they will show up with the right ideas that they send out the right message. Imagine you get a 50% discount on your next Starbucks coffee, I don’t believe that this will hurt their retention somehow.  If it’s an advantage or for example, you get an access pass for a very big digital event in the Meta environment, those customers already have the affinity to FinTech, crypto NFT Meta world space. If you are tracking, coupon messages can work very well and add value for both sides.

Shamanth 

Yes and as you said, maybe there’s just a natural price discovery thing that will come in there. Obviously, the smarter the advertisers are, the more they can tailor their offers to what’s happening here. 

The other aspect that I also wonder about is, blockchain transaction data is public and you can use that to airdrop NFT’s to them. Do you think this could result in concerns about privacy? That’s been top of mind for a lot of marketers with the IDFA lately. Do you think that has any scope of risk or any risk of a backlash because of privacy concerns?

Tobias 

My passion is also for performance marketing and like the whole idea of a topic, it’s on the top of mind for a lot of people right now. I could imagine that the first party who is concerned about that is probably Apple because they can maybe lose control somehow.

Blockchain isn’t so easy to control. But it is public. If you have something to hide, maybe you stay away from that, or you stay in the offline world. 

I think it could be a great opportunity to already log in for a wallet somewhere without sharing too much data, just my wallet ID, and then also give the opportunity to advertisers to make a match afterward, if it works somehow. I think it would be interesting. Imagine, you go to an Amazon Fresh store, and then you just log in to the store with your crypto wallet. Instead of using your Amazon account, you can still pay and get access. Nobody knows that you as a person buy something on Amazon. This I think is also a very good use case for the future. 

Shamanth 

Yes. We were talking about this last time it started to happen in actual Amazon Fresh stores. Certainly, the future may not be that far away. As you said, the blockchain is public by design, and you’re still not disclosing personally identifiable information. That really makes it usable and available for this kind of targeted advertising that we’re talking about. 

Tobi, this has been very instructive to me. It’s certainly something that I have been trying to wrap my head around. I was taking notes. This definitely is the way that the future is going. Excited about everything you’re building. Excited to see what happens next. 

But for now, I think this is a good place for us to start to wrap. Before we do that, can you tell folks how they can find out more about you and everything you’re doing? 

Tobias

Yes. The best way is to check in at my LinkedIn profile. You can find everything about me over there. 

Shamanth 

Wonderful. We will link to that. Do you also want to mention the wallet ads website as well? 

Tobias 

Right now we’re in the alpha phase if everyone out there wants to get the exclusive invite. We opened this up to the advertisers in the alpha program. Up to five brands are able to play with and learn. We have to learn a lot. Advertisers have to run a lot. Let’s grow together.

Shamanth 

Excellent.  Tobi, thank you so much for your time. I’m excited to put this episode out into the world.

Tobias 

Thanks.  Bye bye.

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