Evaluating ROI in Web3 Questing Campaigns: A Checklist for Web3 Marketers
Evaluating ROI in Web3 Questing Campaigns: A Checklist for Web3 Marketers
A checklist for Web3 Marketers/Growth leaders to evaluate the ROI of the Quest Campaigns.
Characterized by decentralization and blockchain technology, Web3 quests are innovative actionable marketing strategies that leverage the unique aspects of Web3 technology to engage and retain users.
However, the key to their success is in effectively evaluating the Return on Investment (ROI) ~ through either user immersion, engagement, or quest completions.
Whatever your goals, This article aims to guide Web3 growth leads through the nuances of assessing ROI in these campaigns.
Understanding Web3 Questing Campaigns
Before diving into ROI evaluation, it's essential to understand what sets Web3 Questing Campaigns apart. These campaigns typically involve tasks or challenges that users must complete within a blockchain ecosystem. They often offer rewards in the form of digital assets like cryptocurrencies or NFTs, fostering a deeper level of engagement compared to conventional marketing strategies.
Evaluating Questing ROI: Key Considerations
Defining Clear Objectives:
Specificity: Objectives should be specific and measurable, such as increasing the number of active users by a certain percentage or achieving a specific level of token distribution. For example, when a DeFi project launches an campaign, their objective can be, increasing the TVL from $500k to $1MN through the quests.
Alignment with Business Goals: Ensure that the objectives align with the broader business goals of the Web3 project. Referring to previous example, for any DeFi project TVL is a north star metric that is well aligned with the campaign’s objective.
Timeframe: Set a clear timeframe for achieving these objectives to evaluate ROI effectively.
Cost Analysis:
Direct Costs: Consider the direct costs involved, such as development, marketing, and operational expenses. For example, Funds paid to KOLs to promote your campaigns or funds used on paid promotion on Twitter.
Digital Asset Valuation: Account for the fluctuating value of digital assets used as rewards.
Opportunity Costs: Include opportunity costs, such as other marketing strategies foregone in favor of questing campaigns. Analyze the cost spent on KOLs for campaign promotion which would have been spent on marketing campaigns.
Value of Engagement:
User Activity Levels: Measure the depth of user engagement, not just the number of participants. For example, understand the recurring tasks done by users. Analyze the quality of messages, are they talking about project or just general messages like gm, etc.
Community Building: Evaluate the second-order impact on community building and brand loyalty. Understand the referrals brought in by the users and, the increase in mentions on socials and UGC.
Network Effects: Assess the indirect benefits such as increased awareness and advocacy by engaged users. Measuring this however can be very difficult.
Long-term User Retention:
Retention Rates: Track how many users remain active over time after participating in the quest. Run a Cohort analysis, which involves grouping users with similar characteristics to track and compare their behavior or performance over time. By analyzing these cohorts, projects can identify patterns, trends, and changes in user behavior, which will help you measure the ROI of your quest campaign.
Lifetime Value (LTV): Calculate the LTV of users acquired through these campaigns. The lifetime Value (LTV) of a customer is a crucial metric predicting the revenue a customer will generate over their entire relationship with a project. It is calculated by multiplying the average revenue per user by the average customer lifespan. For instance, Opensea-like projects would calculate, that if a customer purchases $100 worth of NFTs per month and stays for 12 months, their LTV would be $1,200.
Behavioral Changes: Observe any long-term changes in user behavior that contribute to the project’s growth. For example, users spending more time on the Dapp, interacting with content, and participating in Twitter Space discussions, etc.
Data and Analytics:
On-Chain Metrics: Utilize on-chain data to track transactions, wallet addresses, and token movements. Here, Platforms like Intract can be leveraged to design and track on-chain quests seamlessly through no-code features.
User Demographics: Analyze participant demographics for better targeting in future campaigns. Keep in mind the nuances with community sentiment towards privacy protection when embarking on such analysis.
Engagement Analytics: Use engagement analytics tools to understand how users interact with the campaign elements. Metrics like click-through rates, time spent on specific campaigns, completion rate, and no of quest completions can be tracked.
Comparative Analysis:
Against Traditional Campaigns: Compare the results with those of traditional marketing campaigns to gauge relative effectiveness. For example, evaluate if $1000 used on Twitter ads or Influencers brings more ROI than launching a $1000 quest campaign.
Cost-Benefit Comparison: Analyze the cost-benefit ratio in comparison with other marketing strategies. For instance, consider the brand dilution due to excessive quests or if it overwhelms users with too many tasks.
Market Benchmarking: Benchmark against similar campaigns in the market to understand the competitive position. Analyze the campaigns of similar projects on Intract to understand where your campaign numbers stand.
Feedback Loops:
User Surveys and Feedback: Collect direct feedback from participants to gain insights into their experience. Quests like these can designed to know the feedback from the participants
Community Forums: Monitor discussions on community forums such as discord and social media to gauge sentiment.
Iterative Improvements: Use feedback for continuous improvement and adaptation of campaign strategies. For example, if the campaign completion rate looks significantly lower then consider making on-chain tasks optional.
Innovative Metrics for Web3 ROI
As the digital landscape evolves, so does the complexity and novelty of measuring success in Web3 initiatives. Traditional metrics may not fully capture the unique dynamics of blockchain-based projects.
Thus, it becomes imperative to consider innovative metrics that are tailored to the nature of Web3 and its underlying technologies. These metrics not only provide a more accurate reflection of the campaign's performance but also offer insights that are aligned with the decentralized, token-based, and community-centric ethos of Web3.
Below are some of these pioneering metrics that can be pivotal in evaluating the ROI of Web3 Questing Campaigns:
🪙 Token Appreciation
If the campaign involves distributing tokens, their appreciation over time can be a significant ROI metric. For Instance, Ethereum (ETH) has shown significant appreciation, as seen in the candle chart explosion, indicating potential gains for token holders.
It's important to note that a significant amount of fees are often collected in ETH on Layer 2 (L2) solutions, adding a layer of complexity to the token's value proposition and the overall ROI calculation.
⚖️ Smart Contract Interactions
The frequency and nature of smart contract interactions can indicate user engagement levels. Analyze the actions during and after the quest completion. For instance, are the users doing more on-chain activities on your platform during the quest campaign and after the quest campaign?
👪 Community Growth and Sentiment
Monitor changes in social media following and sentiment pre and post-campaign. Track the level of active participation in community forums, AMAs, and other interactive platforms. Tools like Brands24, can be leveraged to understand if there is any significant change in mentions because of quests launch.
🆕 Network Expansion & New Partnerships
Assess the formation of new partnerships or collaborations as a result of the campaign. A well-orchestrated questing campaign can bring new collaborations and partnerships by bringing together diverse projects and communities. Linea DeFi Voyage on Intract is a great example of how 80+ projects collaborated together.
🎪 Ecosystem Integration
Evaluate the campaign’s role in integrating the project more deeply into the broader Web3 ecosystem. For instance, a quest tasked participants to use a specific DeFi platform for swaps, stake in another, and vote in a third project's DAO governance can foster a more interconnected and robust ecosystem.
📣 Referral Activity
Track the success of referral programs if integrated into the questing campaign. However, ensuring the authenticity of these referrals is crucial to avoid inflation of participation by Sybil accounts. To protect against bad actors, leveraging platforms such as Intract ensures the authenticity of the users.
Challenges Around Tracking ROI
Difficulty in Tracking: Tracking on-chain actions during and after the quest is always challenging in web3 marketing. Leveraging platforms like Intract that offer no-code verification infrastructure can significantly ease the process of tracking on-chain actions.
Filtering Bots:
Few bad actors exploit the campaigns to their advantage therefore it becomes challenging to remove sybil & airdrop bots from the analysis. Utilizing advanced analytics tools and AI to analyze patterns of engagement can help in identifying and filtering out bot activities.
Measuring Qualitative Actions:
Quantitative metrics are straightforward, but assessing the quality and depth of user engagement such as quality of engagement, behavior of the user acquired, etc. goes beyond mere numbers.
Quality of users:
Determining the value of acquired users, especially across different blockchains, requires analyzing on-chain data and transactions which becomes challenging.
Community Backlash:
Community resistance to data tracking can arise due to privacy concerns. Maintain transparency about data collection and usage, and engage with the community to explain the benefits.
Lack of Good Attribution Tools:
The absence of effective tools and infrastructure makes it difficult to accurately measure the impact of various distribution channels. E.g. KOLs don’t put links in their thread hence it becomes challenging to track the numbers.
Conclusion
Evaluating ROI in Web3 Questing Campaigns requires a balance between traditional marketing metrics and the unique aspects of blockchain technology. By understanding the nuances of Web3 engagement and leveraging innovative metrics, Web3 growth leads can gain valuable insights into the effectiveness of their campaigns. As this domain evolves, so will the strategies for measuring success, making adaptability a key asset for any Web3 marketer.