KOLs (Key Opinion Leaders)
Influencer marketing strategy popular in web3 but plagued by vanity metrics and compliance issues
Traditional Background
Influencer marketing evolved from celebrity endorsements, promising more authentic connections with audiences. Traditional platforms developed sophisticated tracking for influencer campaigns, though attribution remained challenging across the purchase funnel.
Web3 Evolution
KOLs became popular in web3, with many companies attracted by visible engagement metrics like comments and likes. However, the model faces tracking limitations and compliance challenges that can make ROI measurement difficult for advertisers focused on ROI.
Tracking Limitations
Tracking real conversions from KOL campaigns can be challenging without click-based attribution, unlike CPTx or view through conversion approaches. KOL campaign success is often measured through engagement metrics like impressions, likes, and comments rather than direct business results like ROI or CAC.
Cost Effectiveness
KOL campaigns can be expensive relative to measurable business results, often relying on engagement metrics rather than conversion data. Attribution challenges make it difficult to account for delayed conversions, which some marketers consider a disadvantage compared to behavioral onchain targeting approaches.
Compliance Issues
A significant legal problem is that KOL posts are rarely labeled as paid advertisements, making them potentially illegal in many jurisdictions. This creates regulatory risk for both the KOL and the advertising company, unlike platforms with proper smart contract audit requirements.
Better Alternatives
Sophisticated advertisers increasingly prefer performance-based advertising like CPTx where they only pay for actual results, or behavioral onchain targeting that reaches genuinely interested users without relying on influencer credibility. This aligns with positive sum principles.