Last week, Facebook introduced a new policy that effectively banned adverts for ICOs and cryptocurrencies on its platform. According to its Director for Product Management, the giant social media platform banned adverts that promote services or products that contain deceptive or misleading information. Many companies seeking to raise funding though initial coin offerings (ICOs), Facebook had become an important tool for rolling out digital marketing campaigns.
"Facebook had pros and cons into the ICO’s digital marketing campaign, but was a great tool to reach big audience. Even if it’s a damage for our ICO I agree with this decision. People were constantly annoyed by furious retargeting by ICOs and with all these scams out there, Facebook was becoming a dangerous place to be," notes Friendz Co-Founder, Alessandro Cadoni.
Impact on ICOs
For some ICOs, the ban on ICO adverts will have adverse effects on their marketing plans. Part of the reason for this is the cost of running a comprehensive marketing campaign for ICO companies that are just getting started.
According to Roman Guelfi-Gibbs, the CEO and Lead Systems Designer at Pinnacle Brilliance, the new policy will certainly hurt ICOs because Facebook is a major platform that is featured in every online marketing campaign.
He says, "Facebook is such a major part of current marketing campaigns, it is hard to imagine how it couldn't hurt some ICOs moving forward. The make or break for an ICO that does not have large backing is a solid marketing plan and aggressive campaigns. Facebook has been a major part of such plans. We certainly have Twitter, LinkedIn, Instagram, and others, but I think that this move will impair the effectiveness of ICO campaigns for the near future."
Guelfi-Gibbs, however, notes that the cryptocurrency market is capable of overcoming the ban, enabling companies to market their ICOs on alternative platforms.
"Facebook may find that they will miss those advertising funds when they are gone. Crypto is resilient, and if a company believes in their brand and doesn't give up, they will find the avenues necessary to effectively market their ICOs," Guelfi-Gibbs adds.
At the same time, some players feel that the dynamic cryptocurrency environment makes it difficult to consider any single platform as the main marketing channel for ICOs and see nothing wrong with Facebook's policy change.
George Galoyan, the founder of WeAre.ee says, "Market ICO changes the vector of its development so quickly that we cannot consider some channels as main channels, and others as secondary. In the summer of 2017 and the first part of autumn, Facebook was very effective, but with the passage of time the listings and trackers pushed it to the background. So there is nothing wrong with Facebook changing its policy. It means that in the near future we will see new effective channels, the market has not yet been formed and for the present, it is rather an experimental marketing."
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.