In the vortex of excitement and debate about where cryptocurrencies are headed and whether they are legitimate, sustainable and prudent investments, there is one overshadowed discussion of interest to marketers: are Bitcoin (BTC), Ether (ETH), Cardanos ADA, Litecoin (LTC), XRP, Dogecoin (DOGE) etc., crypto brands?
And if so, how are these brands created and what role do they play in the acceptance of the individual coins? Or how does branding overall contribute to (or impair) the legitimacy of a cryptocurrency if it seeks increased acceptance / use by the mainstream?
Connected: Decentralization vs. centralization: where is the future? Experts answer
To answer that, consider David Ogilvys – a British advertising tycoon known as the “Father of Advertising” – definition of a brand: “The intangible sum of a product’s attributes”. This often includes identity, voice, empathy, value proposition and consistency in keeping promises made. Ultimately, attributes like these revolve around the core of a product / service like atomic particles, among other things, to create trust, preference, and loyalty (or lack thereof).
One could argue that fiat currencies are brands in that their issuing countries work to create value and trust in them. However, with little or no competition in their home countries, assigned commodity identities (dollars, pounds, euros, yuan, etc.) and no real attempt by governments (the “brand” owners) or other entities to change the currency perceived or used it is difficult to see them as such.
If you look at other examples in finance, stocks are one way of owning the brands they put out. Mutual funds are also taking on the halo of the brands they manage – although there have been instances where funds like Fidelity’s Magellan Fund and Vanguard’s Wellesley Income Fund have become prominent brands. You can also think of funds as branded baskets.
In addition, commodities such as gold, silver and copper are commodities. And that brings us to cryptocurrencies.
Consider the following:
- Bitcoin has many unique attributes for a currency, such as: 1) a hero’s epic tale in the form of Satoshi Nakamoto’s pseudonymous pursuit of a decentralized currency that culminated in the now famous 2008 White Paper; 2) a recognizable and evolving identity and perception of being the founding father of digital currency; 3) “First mover” advantages that all other brands (cryptocurrencies) have to compare or contrast with.
- There are arguably two dominant players or established brands – Bitcoin and Ether – and a growing, very long list of “challenge brands” in the form of altcoins.
- The Challenger brands mentioned each have individual selling points and – with names like Avalanche, Sushi, and Chiliz – a means to help investors / consumers remember them.
- The buzz around Dogecoin and other so-called memecoins – which the Crypto Dictionary describes as a “joke that turns into a crypto coin” – illustrates how pop culture (and therefore marketing) is influencing markets. Older people may shy away, but positioning Dogecoin and others as consumer currencies is nothing at all unusual for younger generations of investors in particular.
- Finally, and perhaps most importantly, there is a rapidly growing cryptocurrency marketplace where technologies / platforms compete for not only financial engagement but also social currency – i.e. H. for a share of the voice on social media within the cryptocurrency community and beyond.
Despite all of these truths, some fascinating questions remain: First, if decentralization is at the core of the concept of cryptocurrency, who then controls and maintains each of the brands? And if trust is a key principle of brand health, how does trustworthy technology fit in?
Connected: Bitcoin’s evolving narratives make it anti-fragile
Cryptocurrencies are the first real user-generated brands
In contrast to user-generated content (UGC) – which is requested by marketing organizations in order to give the customer a voice, authentic perspectives and active engagement – the content of a user-generated brand (UGB) is largely unsolicited and uncontrolled. Like leaven, start with it and it will grow on its own. (That seemed a fair analogy, given the worldwide popularity of the sourdough COVID-19 pandemic.)
Without a central owner or the equivalent of a Brand Manager or Chief Marketing Officer, these brands are created and maintained by creators, user communities, investors, miners, and more. You’re at meetups, forums, chat rooms, and subreddits. In fact, brand health can be correlated with how robust the conversation is on channels like these.
Brands are shaped by a vocal and growing community of influencers, including crypto heroes like Andre Cronje and Vitalik Buterin, technology pioneers like Marc Andressen and Elon Musk, financial stars like Cathie Wood and Jamie Dimon, and popular voices like. belong Shark tank‘s Mr. Wonderful (Kevin O’Leary) and The Mooch (Anthony Scaramucci). All of this suggests that the evolution of these UGBs and how they will be consumed by individual investors, institutional investors and the media is largely unpredictable. Or is it?
Connected: Expert answer: How does Elon Musk affect the crypto space?
Structure of the crypto brand
Many, if not most, of the crypto projects have a foundation or a decentralized autonomous organization (DAO). Think Bitcoin.org, the Ethereum Foundation, Cardano Foundation, and other open source resources, too many others to mention. These foundations publish white papers as de facto advertising and raise capital through crowdfunding with Initial Coin Offerings as their currency. And yes, ad agencies are being hired and other resources are being used to forge their brands – although those who actually approve the creative can be very different, possibly the community of users themselves or those who own governance tokens.
Ultimately, from a traditional brand management perspective, there is limited control while these projects sow and oversee their UGBs. Armed with this active, committed and passionate community, they can:
- Take advantage of the herd mentality bias that drives much of the category. This is heuristic and describes an investor’s tendency to join the conga line – following other investors based more on emotion (fear of missing out on something) than rational reasoning, and contributes in large part to the rapid growth of space at. Arm yourself with influencers and let the races begin.
- Increase the dynamics of the content. User generated content is a bit of a street performance: get a few people to yell and yell and more people will see what’s going on, which will make the audience swell. Hence, high quality content attracts a lot and leaves behind more high quality content. The key word here is “quality”.
- Make education fun. Let’s face it: most people don’t want to take the time to decipher how Merkle trees and nonces work. They want to understand what this new asset class is, why they need to consider it, and how it will help them achieve their personal goals. So there has to be a strategic call to arms so that the content is easy and enjoyable to consume.
Back to the second question: The most important task of every foundation and its supporters within a UGB can be to create trust in the trustless. To put it another way, to differentiate and differentiate the currency based on how their technology / project reviews, is secure, truly independent and – perhaps most importantly – how to quickly answer the question: What is it for?
Of course, this last point does not only apply to cryptocurrencies and their UGBs. The institutions that have to communicate their decisions to their customers, the companies that sell exchange-traded products, the exchanges themselves, wallet applications, and so on to establish themselves in the mainstream by doing what other great brands have done: clarify, make it easy make and keep a promise.
In other words, to dispel the misconception of the vast majority of non-crypto nerds that all cryptocurrencies are designed to replicate fiat for the purchase of everyday goods and services and instead articulate their very specific purposes.
It will be fascinating to watch where the cryptocurrencies go from here. Ark Invest recently described Bitcoin as “the purest form of money ever created”. Also, in weird ways, it can become the purest form of marketing ever created.
This article does not provide investment advice or recommendations. Every step of investing and trading involves risk, and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.
Rich Feldman currently heads marketing for Finario, a SaaS provider for corporate capital planning. Previously, he was Chief Marketing Officer at PrimaHealth Credit and was Agency Owner / Partner and Chief Strategy Officer at Doner CX (part of the MDC Partners Network), where he led the company’s CRM, analytics, digital media and other strategic areas. Rich has lectured on strategy in New York University’s Masters degree in Marketing from Syracuse University and is an adjunct professor at Western Connecticut University, where he serves on the advisory board of the Ancell School of Business. He is also the author of the book Deconstructing the creative strategy.