With more than $3 billion raised from ICOs in 2017 and many more ICOs expected this year, it certainly has huge potential for start-up companies to raise finance in a fast manner, without all the legislation involved in traditional fundraising.
We will cover the issue of legislation and other challenges facing ICO PR within this article but first, the bad news.
- The value of Bitcoin fell dramatically from $20,000 at the end of last year down to $6000 in early February.
- Some ICOs in 2017 turned out to be scams like Confido and the SEC closed down PlexCoin’s $15m ICO.
- BitGrail coin exchange was recently hacked and the hackers made off with $170 million dollars’ worth of Nano (XRB).
- Media outlets are getting bored of receiving press releases for ICOs.
- Blockchain technology has some serious issues to overcome like scalability. Crypto wallets have been shown to be insecure.
- Facebook is weary about Cryptocurrency/ICO ads. In fact, they are now outright prohibited.
- China has recently announced a complete block, no pun intended, on all things crypto. So, China will now block all websites relating to Cryptocurrency and ICOs.
Cryptocurrencies may have gone through a boom phase in 2017 but there is every possibility that they could tank this year. Investors are going to be much more careful when choosing which ICO to get involved in which means you need to be at the top of your game with your PR. The challenges you face in 2018 with your PR can be summarized as follows:
- Market Sentiment
- Legal Minefield
- Weak PR channels
- Lack of imagination
- Over hyping
Market sentiment affecting your ICO
Your PR campaign needs to clearly identify why your project is different to other ICOs and why it will be successful. Market sentiment is against you at this moment in time but that could change if we start to see some really practical uses for blockchain technology. Blockchain is not a new phenomenon and its now time for you to demonstrate its power in the project you are building. With so much bad press associated with ICOs at the moment, your PR campaign should look to address some of the concerns being raised in the media.
Ethereum is currently the most popular network being used for ICOs and even though it has overcome some of the problems associated with Bitcoin, it is still facing timing and cost issues. Will you be using the original Bitcoin blockchain or a new and improved blockchain? If you are working on a better blockchain, or better still you have a working prototype using it, make that crystal clear in your campaign.
It’s vital that your team or the PR agency is fully conversant with the legal aspects associated with ICOs. We all know that most ICOs are looking for investors but the marketing materials used should refer to them as participants, not investors. Participants are not technically investing in your business they are quite often buying a product or service that might not even exist yet. The distinction between a participant and an investor is very important.
If your ICO is promoted as an investment opportunity, the regulators in your jurisdiction could rule that you are issuing Securities and this might prevent the ICO from proceeding or at least bog it down in red tape for months. Ultimately, the team behind the ICO will be held responsible if your business is promoted in any way that is not 100% factually correct. This applies not only to the distinction between participants and investors but any claims they make about your coin. If you choose to work with a PR agency that has experience of ICOs, they should be able to demonstrate to you that they know the legal implications of the PR campaign.
Weak PR channels
If the team is new to ICO PR marketing, they might not have the right contacts to support your ICO. For example, an agency that has recently switched from general PR to ICO PR will need time to build up relationships with key players in the Cryptocurrency media. You need to be working with a team that can demonstrate a proven track record in the field of ICOs. If you are outsourcing your PR strategy, don’t be afraid to ask the agency who they will be contacting as part of your campaign.
Lack of imagination
Although there are certain aspects expected from all PR campaigns, your PR team or agency should have fresh ideas and ones that will get really creative for your ICO. They need to make you stand out from the crowd compared to the other ICOs that investors have to choose from. Ask them what new strategies they plan to use to overcome the current adverse market sentiment in the industry. A good PR team should be able to promote your ICO in such a way that investors snap up your tokens through the fear of missing out (FOMO), even in the current climate. Hopefully you already have creative individuals within your team but they should be concentrating on developing your project and not being distracted with marketing the ICO. An agency that is familiar with ICOs will have specialists that are expected to come up with unique strategies specifically designed to promote your business.
Over hyping the ICO
If you choose to turn to an agency, be aware that some of them are guilty of “hyping up an ICO”. There is no doubt that some ICOs will turn out to be the market leaders in their field but many will fail like most start-up businesses. There is a fine line between promoting an ICO to a level where investors will show an interest and overhyping it. If a PR agency advocates all the ICOs they are working with as though they are going to change the world and subsequently each of them flops, they are quickly going to be dropped as a reliable source from the leading media outlets. Some ICOs are created simply to scam investors and the PR agency that promotes them will be considered guilty by association. Therefore, it’s essential that the agency does their own due diligence for each ICO they are asked to work with. If the agency doesn’t have the skill set or experience to be able to spot a bad or scam ICO, they shouldn’t get involved.
From this article we hope you are now aware of some of the challenges your PR campaign may face. In our next article, we will be looking at some of the biggest ICO PR mistakes that agencies are making and how to overcome them.