If one token's newly announced marketing strategy is any indication, the Federal Trade Commission may soon have more warnings to send to social influencers.
Announced today, Singapore-based marketing company Jet8 is launching an initial coin offering (ICO) designed to scale its system for rewarding regular users who effectively promote brands on Instagram, Twitter, Facebook and more. As such, the idea effectively merges a contentious ad model with the red-hot crypto market, itself no stranger to controversy.
But cryptocurrency doesn't actually mark that big of a shift for Jet8.
In an age where elite Instagram models can earn thousands from a single post, the company has made it easier for brands to scale their social reach by enlisting more average users. Users, in turn, are able to leverage the Jet8 app to share photos or posts with branded frames that then get distributed to major social media platforms.
Once Jet8 launches its own cryptocurrency, however, those rewards will take the form of fungible money. And there's little risk to brands because they only have to pay rewards for shares that garner actual reactions.
This design is where the benefit lies.
Today, the company's influencers receive rewards in the form of a virtual currency tracked on its internal ledger system. Jet8 has awarded 4 billion of its virtual tokens to date, points which then must be redeemed at convenience stores in Asia or through an app store.
But with a traditional virtual currency, Jet8 must rely on traditional tactics, negotiating deals with companies to make the tokens redeemable. In this way, the company believes an ethereum-based cryptocurrency can open up the platform to brands.
Shannon Cullum, chief marketing officer for the startup, said that cryptocurrency gives the product more value, stating:
"The increased transparency, flexibility and scalability, that's the rationale for integrating the blockchain into the project."
To demonstrate the potential of its platform, Jet8 is giving supporters a chance to earn tokens by posting testimonial videos about why they are excited about the token sale. The more engagement these videos receive, the more J8T they will yield.
Cullum himself even kicked off the contest on Instagram.
In contrast to this user-first model, Jet8 has worked under more of an agency approach. In the past, brands would come to it with an idea for a campaign, a target audience and a budget. It would create brand assets for the campaign and message influencers about the opportunity.
Jet8's secret weapon has been its ability to track the success of different posts. It follows them as they go out onto the web, and it tracks which ones generate engagement. Brands can watch the reach stack up as the campaign goes on through a dashboard that the company provides.
The dashboard squares with a larger trend of brands bringing influencer marketing in-house.
For example, Jet8 recently launched an app-as-a-service model called the Full Stack App. A brand can create its own app that works exactly like Jet8's, except it can be customized to look like the brand's own technology, from which it can launch its campaigns directly.
"The advantage of that model is they will be able to create these communities and in a sense decentralize the whole thing," Cullum explained. "It's the same technology, the same methodology."
Still, jumpstarting the Jet8 token by decentralizing a network won't necessarily be easy, even with tools that could enable such an expansion.
To start, there's the matter of cultivating a user base. The company will aim to sell $36 million worth of its tokens in an ICO, auctioning off 30 percent of a total 1.5 billion token supply. (Tokens sold in the public sale will go for $0.10 per J8T, the company said.)
Overall, Jet8 expects to raise 70 percent of its ICO goal through a private sale in advance. And while it has declined to disclose investors in the round, it did offer advisory board details. Members include Uriel Peled (Cointree Capital), Eyal Herzog (Bancor) and the founding director of the Bitcoin Foundation, Jon Matonis.
Yet, if this token catches on, its hard to imagine that social media won't become an even more intense stream of brand messaging. After all, there's no denying it's already getting weird among major influencers using traditional tools.
Still, Cullum argued that baldly avaricious sharing won't be rewarded.
"If I post a Coca-Cola asset on my Facebook page and it's just blatant advertising. I probably won't get any likes comments or shares," he said.
As such, the Jet8 app and token seeks to guide people to post authentic experience with campaign branding that people would respond to either way.
"The way we design the assets, it's very much about key moments," Cullum said.
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