Tracking ROI is not some fancy new trend but a foundation. It’s like financial literacy: before you become super rich as you plan, you first need to learn how to track where your money goes. Same with advertising. Before you scale your campaigns, you need to know how to measure them and make sure you’re not wasting money.
Learn from this article about on-chain and off-chain marketing metrics, ROI model calculations, effective tools for measuring results, and CPA in Web3. Of course, with examples.
What should you be ready for before calculating ROI?
The basic formula of ROI is:
ROI = (gains – costs) / costs
“Returns” in crypto projects it’s not only about immediate sales or ad revenue. Web3 ROI also includes token adoption, decentralized network activity, and community growth.
What is the problem? You won’t be able to measure blockchain actions using traditional tracking methods, such as cookies or centralized pixels. On the other hand, blockchains offer transparent, immutable activity data that can reveal true engagement. So, it’s not just empty views that don’t lead to anything, but it’s token adoption, which means using your product or project.
For now, there are 2 challenges in Web3 marketing: fragmented data sources and user anonymity. Users can span a Twitter AMA, a Discord server, and a transaction on MetaMask, so you need to track their steps along three different channels. Therefore, it requires a lot of effort. And another challenge is user anonymity. Not everywhere you can track specific user actions; only if you have their wallet address.
But also, Web3 marketing brings new opportunities and new cases for marketing and the crypto world:
- Marketing data from blockchain can validate genuine user actions (like actual token swaps or staking) rather than just clicks.
- Novel ad tools (token rewards, gamified quests, token-curated ads) truly revolutionizes marketing.
If you’re a marketer who has transitioned to the crypto sphere from another field, you’ll need to learn many new tactics and rethink the ROI meaning.
KPIs for Web3 Advertising Campaigns
Goals should be set using SMART, and results should be measured using KPIs. Let’s break KPIs into categories:
On-Chain Metrics
On-chain refers to marketing data that is recorded directly on a blockchain:
- Wallet Interactions: Number of unique wallet addresses interacting with your DApp or smart contracts (calls, transactions).
- Token Transactions: Volume and count of token transfers or swaps involving your token.
- Token Holder Growth: Change in the number of wallets holding your token over time.
The best example for illustration of all three metrics is any exchange. After launching the marketing campaign, the platform saw a sharp rise in the creation of new wallets and daily swaps with native tokens. As a result, the number of token holders also grows.
Off-Chain Metrics
In turn, off-chain data exists outside the blockchain, typically on Web2 platforms (or “usual” Internet):
- Website Traffic: Sessions, page views, and visitor sources to your site
- Social Media Engagement: Likes, retweets, shares, and comments on your posts
- Email Marketing: Newsletter open and click-through rates
Specifically off-chain marketing activities attract users and are responsible for the first steps in a user journey. Until someone sees your Twitter ad, no one will come to play the game on your wallet’s website.
Community Growth
- Discord/Telegram Members: Total and growth of community members.
- Activity Level: Active daily or weekly users in chat channels and participation in events or polls.
- Sentiment: Qualitative measure of community tone (positive vs negative buzz).
You know that working with your audience is one of the cornerstones of a strong product. Everyone who’s ever heard about you eventually becomes a potential buyer. So, you must track it.
Why look beyond your primary KPIs?
Probably, some of you have thought, ‘Why do I need all these indicators? I’ll just look at the number of wallets and that will be enough’. But actually, no.
Imagine: Twitter ads drove wallet creations, which in turn led to higher total value locked. The wallet owners, new users, became active community members in the Discord community.
In this case, the acquisition channels overlap with each other and influence each other. You must not lose sight of any of them.
How Do Marketing Metrics Influence ROI?
Now, a bit boring but so important mathematics. Believe me, when you get these indicators on high, you will be satisfied. Look at the comparison table of key KPIs. They bridge on-chain and off-chain insights.
| KPI | How Measured | ROI Relevance |
| Cost per Acquisition (CPA) | Total campaign spend/number of new conversions | Lower CPA means more efficient spending and higher ROI |
| Conversion Rate | (conversion actions/impressions or clicks) × 100 | A higher conversion rate means more users take action per ad shown, boosting ROI. |
| Total Value Locked (TVL) | Sum of assets held in smart contracts | Growth in TVL reflects successful user acquisition and retention. It directly contributes to ROI. |
| Lifetime Value (LTV) | Average user spending or assets × expected lifetime | LTV may include trading fees, staking yields, or repeated NFT purchases. A high LTV improves overall ROI calculation. |
How to Calculate ROI in Web3
Definition
Web3 introduces conversion actions that don’t exist in Web2 marketing. For example, a conversion might be a user staking tokens in your protocol, swapping one cryptocurrency for another on your DEX, or voting on-chain in your DAO.
Conversion actions in Web3 are different from those in Web2. For instance, a user staking tokens has a long-term commitment, which can be more valuable than a one-time purchase. And it’s obvious because the user leaves tokens in your system, like a bank deposit. If the reward satisfies him, he leaves them again for staking.
Strategies for ROI Calculation
Now, let’s examine various models for calculating ROI. Depending on your goals, you’ll choose the one that suits you best.
- Token Holder Growth Model
Compare your ad costs to the increase in the number of wallet addresses holding your token. For example, if you spent $5,000 on ads and gained 2,000 new token holders, each cost you $2.50. Use this model when you issue a new token.
- TVL Growth Model
Here, you track how much value (crypto) users deposit into your protocol after a campaign. Say you spent $10,000 on marketing and got $200,000 locked in your staking pool. That’s a 20× return. This model is great for DeFi protocols that care about liquidity or staking.
- Community Engagement Model
Audience interaction is key to success. Create campaigns to boost your audience’s activity. For instance, you run a campaign, and your Discord sees 3× more active users, or AMA sessions get 2× more questions.
- Direct Revenue Model
Straightforward and concrete model: compare ad spend to actual money or tokens earned. It’s basically the raw ROI formula. Example: you run a wallet ad, spend $3,000, and users swap $10,000 worth of crypto on your DEX (you earn $1,000 in fees). That’s a clear profit of $1,000.
Understanding Cost Per Acquisition
Cost per Acquisition (CPA) in Web3 is measured by a specific method. High lifetime value (LTV) can arise from users’ interactions with multiple dApps, staking assets, or participating in governance. Therefore, if the LTV is high enough, the CPA can be justified.
For example, YieldFlow, a DeFi staking protocol, spent $25K on ads and attracted 1,250 new stakers. In this way, they achieved a 4.2× return on ad spend at an average CPA of $20. Brilliant result!
The same goes for you. If a user’s wallet is likely to stake $1,000 over 6 months, a $20 CPA is a smart investment. However, if the user interacts only once, the cost is too high.
Many teams use this formula: CPA ≤ LTV / 3
According to it, the acquisition cost never exceeds one-third of the expected value.
Tools and Methodologies for Effective Web3 ROI Tracking
Finding the best tool to track marketing ROI is half the success. Here, we gathered the best-ever known tools to make an ROI analysis. Some of them you are already familiar with.
Off-Chain Tools
- Google Analytics (or GA4) is essential for tracking website visitors, page flows, and conversion funnels.
- Social media management platforms (like Hootsuite or Buffer) help schedule posts and analyze engagement. No content for the sake of content. Everything must serve a single purpose.
- Email marketing tools (e.g. Mailchimp) report open rates and click-throughs. In Europe and the US, it’s a powerful marketing channel that brings quality leads.
Blockchain-Native Tools
Here are tools that will help you stay competitive in the Web3 market.
- Etherscan and BscScan are free block explorers that show real-time transactions and token transfers. You only need to input the wallet address.
- Dune Analytics provides customizable SQL queries and dashboards on blockchain data (great for linking ad-driven wallet addresses to activity). The most popular movie of 2024 had the same name, so you won’t forget.
- Nansen offers enriched wallet addresses.
- DeFi Pulse or DeBank can track how many funds are locked/staked in your protocol.
- On the community side, Discord bots like Apollo or Sesh can generate analytics on server growth and user engagement.
What to do?
Based on all these KPIs, we have compiled some best practices to help ensure your campaign’s success before it begins.
- Decide what you want to measure before the launch. (new wallet sign-ups, TVL, follower growth). Like a goal according to SMART. Decide when you understand that the campaign is successful.
- Use tags. Tag all ads, social links, and email CTAs so you can trace a conversion back to the channel.
- Gather both quantitative and qualitative data. Quantitative tools (Google Analytics, Etherscan, Dune) give you hard numbers on visits and transactions. However, qualitative data, such as surveys, Twitter polls, or Discord sentiment checks, can explain your quantitative results.
- Visualize data. When you see it on the graph, it’s just more comprehensible. Use dashboards built on Dune and Tableau to spot trends. For example, chart how token transaction count moves with ad spend over weeks.
- Try different options. Conduct A/B tests (using different banners or token offers) and double down on what yields higher conversions.
To conclude
There’s no single ROI calculator. Think of Web3 marketing as Web2 marketing… but doubled. Depending on your product’s goals and economics, track the metrics that matter to you.
If you want to boost your results, feel free to message Bitmedia, top performance crypto advertising agency. We’re a team of professionals happy to help with your case. We offer both on-chain and off-chain marketing services to ensure your brand is seen and remembered by the right audience. Take a look at our case studies to see how we’ve already helped clients grow their ROI.
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