Exchange customer acquisition Transaction History: How to rewrite the crypto market rise rules with a price of 50 USD

Author: Golem, Odaily Odaily Daily

Original title: Exclusive reveal of exchange user acquisition rules: $50 to buy a new user

Late at night, when you finish a day of crypto trading, tiredly lying in bed and opening Tinder to pair with a stranger for a wonderful date, an ad from a certain cryptocurrency exchange suddenly appears, stating “Complete your first transaction to instantly receive xxx USDT reward.” You can't help but sigh in disappointment; unable to sleep, you open a video streaming site to watch an episode of your favorite American drama, but just as the plot reaches its climax, a 15-second ad interrupts. It's not about the Macau Grand Lisboa, but rather another cryptocurrency exchange, and at this point, you can't hold back anymore, cursing “F**k you, crypto!”

Cryptocurrency exchanges are infiltrating the daily lives of ordinary people through advertising, and behind this lies the growth ambition of CEX.

According to official disclosures from Binance, its platform's global registered users are expected to exceed 250 million by the end of 2024, representing an approximate growth of 47% compared to 2023. Although this achievement is commendable, it also means that for leading exchanges, the number of new users that the industry can provide has become saturated. To acquire new users, it is essential to actively stimulate the demand of consumers outside of cryptocurrency and extend the reach to Web2.

Who is quietly advertising to us?

To satisfy the ambitions of the exchange, it is a lesser-known growth department—Paid ads—that is placing advertisements in our corner of cyber life.

“In the exchange, we are a parallel department with BD, both responsible for user growth, but we engage with users through paid advertising,” said Han Bao (a pseudonym), who works in Paid ads at a certain exchange, to Odaily.

The “traditional crypto users” usually interact the most with exchange BDs. They not only connect with B-side project parties but also engage deeply with C-side communities, maintaining good relationships with KOLs, website owners, and rebate team leaders, sometimes even acting as customer service representatives to help ordinary users solve problems. Some BDs from large exchanges may also grow into KOLs, leveraging their personal influence to amplify user growth.

However, as user growth in the industry has hit a bottleneck, the role of BD has become increasingly limited. The difficulty of reaching new users has grown, and maintaining existing customer relationships, as well as differentiating to outmaneuver competitors, has become the daily routine for BD.

Thus, when conventional user growth methods are nearing failure, paid ads have become the lifeline for the exchange's user growth.

The goal of paid ads is to acquire qualified traffic or users (installations, registrations, transactions, leads) through paid channels at the lowest/optimal cost, and to convert the advertising results into measurable business growth.

“We will purchase advertising resources and display positions on media platforms such as the Apple Store, Google, Tiktok, and Facebook, and based on the algorithms and audience targeting of the media platforms themselves, bring some new users to our exchange,” explained Hanburg.

Different growth methods also determine the size of the team. According to Hamburg, although Paid ads and BD are parallel departments, there is a significant difference in the number of people. “Taking our exchange as an example, there are no more than 20 colleagues engaged in Paid ads business globally.”

Although the number of people is small, it is still completely sufficient. Paid advertising is divided into self-run and agency-run. Self-run means that the exchange's Paid ads team collaborates with media platforms, uploads materials, builds advertisements, checks results, and adjusts in real time; agency-run means handing over the advertising work to an advertising agency. This model can meet the needs of a small team but with many advertising platforms.

The use of paid ads as a means of promotion in the exchange sector did not just emerge; it has only been widely invested in in recent years. According to insiders, Binance began experimenting with paid ads in 2021-2022, but only started making significant investments in 2024, while OKX ventured into this area even earlier than Binance.

“The medium-sized exchanges have an annual budget of about $2 million for paid ads, while large exchanges will spend even more,” Hamburg explained to Odaily regarding the budget for paid advertising by exchanges, but for confidentiality reasons, he declined to disclose the annual budget of his own exchange.

However, regardless of the circumstances, compared to the advertising budgets of Web2 giants, the investment from cryptocurrency exchanges is a drop in the bucket. According to public data, Google's advertising budget in 2025 is approximately $8.7 billion, while Amazon's advertising budget is $31 billion, and Netflix's advertising spending in 2024 will also exceed $1.7 billion.

Although there is a gap in profitability, this also indicates that the user growth model for Paid ads in CEX is still in its early stages and not yet mature. “Theoretically, there is a huge demand for Paid ads from top exchanges, and as long as the results are good enough, the budget can be unlimited,” said Hamburg confidently.

Ideally, it costs 50 dollars to acquire a new user

According to Hamburg, the ads they have deployed are indeed effective for new user growth. One of the benefits of Paid ads compared to BD is that it allows for a clear calculation of ROI (Odaily Note: ROI stands for Return on Investment, which measures how much net profit can be generated for every 1 yuan invested). This enables the evaluation of the effectiveness of ad placements on different media platforms. If a platform's user demographics are younger and more accepting of cryptocurrency, then the effectiveness of the ad placement will also be better.

“A typical example is the Apple App Store, where advertising effectiveness is better, while the advertising effectiveness for mobile manufacturers is not good,” said Hanbao. “However, taking large media platforms as an example, achieving $50 per new user from conversion is already a relatively good situation.”

Although this sounds costly, Hanburger explained that from an ROI perspective, if a budget of 1 million dollars is invested, it can achieve a positive ROI in as little as 6 months.

At the same time, the effectiveness of advertising is also related to the materials used. Generally speaking, for new users, advertisements containing incentives, such as first transaction rewards, are used. In addition, Hanbao stated that advertisements promoting the advantages of cryptocurrencies and the historical investment returns of Bitcoin are also more likely to attract external users.

Regulation remains the main reason hindering the development of paid ads in the crypto space

At the end of 2024, I was taking a taxi in Beijing and passed by the Liaoning Building. A friend next to me pointed at it and said, “If you did advertising in Web2 ten years ago and never stepped into this building, you would be considered not in the industry.” My friend was describing a golden era of advertising development in Web2, but ten years later, the spring of advertising in Web3 has yet to arrive.

“Due to different countries and policy restrictions, some major media platforms are still resisting advertising for Web3,” Hamburg revealed to Odaily. For example, countries and regions such as the United States, Hong Kong, the United Kingdom, and Canada have explicitly prohibited non-compliant exchanges from advertising. Moreover, the advertising policy restrictions vary for different exchange products; for instance, spot trading may be allowed while futures or stablecoin wealth management may not be permitted. Some exchanges may use material disguises to pass the review, but the risk is very high.

However, there are countries and regions that are more friendly to cryptocurrency advertising, such as South Korea, Vietnam, and Turkey, where regulations are relatively lax and the consumption of advertising is also large.

However, globally, regulators still maintain a cautious attitude towards exchange advertising, which is a major reason why the scale of exchange advertising cannot be compared to that of Web2 companies.

The biggest problem of Web3: Not enough seniors, not enough newcomers

Despite the current situation, Hamburger remains confident about the future of advertising on exchanges. “The biggest issue in Web3 is still user growth,” and Hamburger believes that leading exchanges in the entire crypto industry have both the demand and the responsibility to use paid ads for user growth.

Under the uncertainty of regulation, costs, and conversion, Web3 is still in an exploratory phase when it comes to acquiring new users through methods like Paid ads. However, for mature large platforms, at a time when user growth has hit a bottleneck, it is no longer an option but a necessary move to make.

The next stage of competition is not just about whose budget is more aggressive, but also about who understands users better and who understands growth better. The real competition may have just begun.