Why token airdrops are a win-win marketing strategy

By Daniel Garde?es, marketing responsible at Vottun.

If you’ve been relatively active in the Web3 sector in recent months, it’s very likely that you’ve heard about airdrops. You might even know someone who has received tokens worth thousands of dollars for interacting with a blockchain, trying out a Web3 game, or simply signing up for a newsletter.

It’s highly probable that the first question that comes to anyone’s mind is how a company/entity can be giving away money to its users, especially when the amounts are so substantial.

The simplest answer is that it’s a way for Web3 companies to reward their early adopters. While this statement is true, as we will see in this article, it has also proven to be a formidable marketing tool for bootstrapping ecosystems and protocols.

The Evolution of Advertising

Today, there are various options when it comes to promoting a project. I will take the freedom of categorizing the types of advertising under my own nomenclature to explain more easily.

Advertising 1.0 (Traditional)

This refers to any form of classic advertising, such as TV, newspapers, or radio ads. While they allow for some degree of segmentation, their common denominator is that they are quite mass-oriented, and it’s particularly challenging to measure their impact directly.

In this system, the project that wants to advertise usually pays a media company to run the advertisement.

The audience receives 0 dollars in exchange for their attention.

Advertising 2.0 (Web 2)

In advertising 2.0, I encompass all communication channels that have emerged thanks to the Internet, such as Instagram, YouTube, Google Ads, etc. The numerous improvements over traditional advertising are noteworthy.

On one hand, tools like Google Ads allow for extensive audience segmentation. Thanks to this, and if the marketing team does a good job identifying the target audience and adjusting the parameters accordingly, it’s possible to reach the desired audience, often achieving greater efficiency for every invested dolar.

On the other hand, this type of advertising allows for much better measurement of campaign results, including demographic data and personal preferences of customers. This information is crucial for obtaining results and rethinking future marketing campaigns.

Finally, it’s worth noting that advertising 2.0 has democratized access to advertising campaigns, as any project can promote itself in the digital environment with a small budget, although the reach of the marketing campaign is typically linked to the budget used.

Despite the advantages of advertising 2.0, the common denominator for most of these systems is that the project pays its budget to a large technological platform to advertise.

Again, the audience receives 0 dollars in exchange for their attention.

Advertising 3.0 (Web 3)

Finally, we arrive at the newest system, advertising 3.0. It is characterized by maintaining all the advantages of advertising 2.0 but adding a new element; this time, the recipients of such advertising will indeed be rewarded in exchange for their attention.

Unlike paying a major company like Google, Meta, or X to give visibility to the advertiser’s project on their platforms, in an advertising 3.0 system, the advertising company rewards its users economically in exchange for their time and attention.

This economic compensation is usually done with tokens from the company, although not exclusively. While many companies, especially startups, are opting to distribute tokens, which, in the end, is a form of equity in the company, there is also the option to distribute fiat money.

An example of token distribution is the airdrop we will conduct at Vottun once we launch our token, $VTN. Since this event has not yet happened, I have to be cautious about providing too many details, but as many of you participating in the Vottun Journey can imagine, our early adopters and the most loyal members of the community will be duly rewarded.

On the other hand, an example of a company that uses advertising 3.0 is Skyweaver, a video game company that, instead of spending its marketing budget on any web 2 advertising system, it used to distribute a certain amount of fiat money (or in this case, digital dollars like USDC) to users who reach a certain level within the game.

At the moment, the vast majority of projects using this system provide rewards in their own tokens, as we will see in an upcoming section, this comes with many advantages for both the company and the customer. However, as this system gains popularity, I believe that many companies that don’t have a token will follow the example of Skyweaver.

In any case, with this system, the audience, especially early users and the most loyal community members, are indeed rewarded for their attention and time.

Advantages of conducting a Advertising 3.0 strategy with project’s own tokens

The main advantage of conducting an airdrop with the project’s own tokens is that it rewards your most loyal users with a stake in the company. Among other implications, this helps strengthen the relationship between both parties and allows users to become financially involved in the project.

This financial exposure through the token, in my view, is the most perfect way to align incentives between a project and its user community. If the project succeeds, users will benefit, which in turn motivates users to help strengthen the project, creating a virtuous circle.

Furthermore, these early adopters assist in product testing, validating or challenging the team’s hypotheses regarding what users really want, ultimately enabling the construction of a more refined and superior product or service.

Lastly, and this is an advantage of tokens in general, not just those intended for airdrops, they allow bootstrapping a business through its base of loyal users and fans, rather than relying solely on large investment funds and venture capital. For the company, it increases its chances of securing funding, and for users, they can access projects in early stages, something challenging in a web 2 environment.

As always, blockchain democratizes access to various systems and opportunities.

Vottun Journey, our airdrop campaign

As I have mentioned throughout this article, as of today (12 of march 2024 for those reading this article in the future), at Vottun, we are conducting an airdrop campaign which we have dubbed “Vottun Journey”.

In this campaign, we allow community members to test our platform Vottun World, and developers to use our Web3 APIs to create impressive DApps, all in exchange for experience points in Vottun World and NFTs that will qualify for the $VTN airdrop.

One thing that sets us apart from most web 3 airdrops is that in our case, users do not have to spend a single dollar on gas fees, mint NFTs, or any similar action, all while following our company vision of bringing web 2 to web 3 through an impeccable user experience.

If you are reading this article before the launch of $VTN, it is very likely that you are still in time to participate. What are you waiting for?

The future of airdrops in web 3

I will conclude the article by outlining the future I foresee for airdrop campaigns in the medium and long term.

While currently an effective strategy, with more and more projects adopting it, and as users’ time is limited, most have begun to be selective about which airdrops are worth participating in and which are not. Thus, due to this increasing competition, I believe airdrop campaigns will become more refined.

In the long term, once these campaigns are refined and systematized, it is quite likely that the use of advertising 3.0 will become a common practice.