An STO also referred to as a Security Token Offering, is a blockchain-powered digital token that represents a share in an asset. Since it has become easier to obtain money through non-traditional channels, numerous fraudulent ICOs have emerged, harming the industry’s reputation.
More than 2000 distinct token offerings raised more than $10 billion in 2017 and 2018 and 50% of them failed. In 2018 crypto market experienced a sharp decline caused by ICOs. Regulatory organizations start thinking about more secure ways to stop these fraudulent cases. And they came up with a more secure version of ICOs. STOs allow for digital funding but still adhere to regulatory laws. Because security tokens are regulated by strict rules.
A corporation that wishes to issue shares can use a security token that offers the same benefits as shares, dividends and voting rights. They are also not traded through traditional token exchanges.
They are, the same as ICOs because they’re fungible tokens, which means they have a monetary value.
Major Difference between ICOs and STOs
ICO is a great way to raise funds for a crypto project but there is a problem because digital assets are considered utilities in ICO and can be issued infinitely. This means you can issue as many coins as you want without any regulatory restrictions. And ICOs are often funded by retail investors. Major retail investors are common people that typically made a moderate living and have little financial expertise. They are often unconcerned about the laws or the plans of the company.
But on the other hand, STOs are government-authorized coin offerings which are strictly regulated by the relevant government bodies and no one can participate in them only well-recognized usually people with stable high salaries or large amounts of capital. Participation in STOs is allowed and there are alerts. Individuals have the right to participate in security coin offerings.
| ICOs | STOs | |
| How they are launched | An enormous digital marketing campaign.Basic knowledge of smart contracts.Any approval from any government authority. | Approval by Security and exchange board is needed. Must Follow every law and regulation and fulfil every criterion given by the governing body. |
| Rights and benefits offered to an inventor | Make profits through trading tokens on different exchanges | Profit participationDividendEquity and voting rights. |
| Where can theyTradied | In every Exchange? | Specific exchanges are made for STOs. |
| How much it costs | Low-cost | High-cost |
| What systems are Required? | Only an easy automated process on the blockchain. | an easy automated process on the blockchain. But includes lots of paperwork. |
| The security offered | The low-security high failure rate | High – Security. |
STO Marketing Strategy: How to attract institutional investors
Whenever it comes to STO marketing strategy, new advertising models are necessary. The mass marketing technique that succeeded so effectively for ICOs because of Telegram groups, massive Twitter fanbases, and influencer sponsorships is not relevant to STOs.
This is due to STOs being available only to authorized investors, usually, those with high salaries or large amounts of capital are allowed to participate in STOs and are smart investors who fall into the trap of working on retail investors. never fall, so you need a different strategy and approach for astute investors.
A smart STO marketing must concentrate precisely on attracting just the authorized investors who really are capable of investing in the offering.
1. Create a website according to mature investors
The first and most crucial step toward successful STO marketing is creating a perfect website. Because a website will be the face of your company. To gain knowledge about your project, investors most likely visit your website and Your website will be their initial point of contact with them. In the long time period, you will through experience and demand of time, may modify a lot of things and also change STO marketing strategies However, once you make a poor first appearance, then your STO will fail to attract investors.
Below are a few criteria for the website:
- Build a professional homepage with Effective, Engaging, and Informative Content so that investors can get an overview of your project and encourage to go through deep into the website.
- Through analyzing previous STOs and conducting surveys collect all potential questions that investors might want to know and answer all of them on your website.
- The material on the white paper should be organized as neatly and comprehensively as possible. Utilizing bullet points and titles will make it easier to arrange the information. Visuals and graphics may also assist clarify content.
- Your PR part of the company website must also feature a simple mechanism for the media to contact management and the PR team.
2. Complete All Legal Compliances
It’s significant for both your STO as well as your marketing point of view. As previously stated, what separates an STO from an ICO is meeting all regulatory standards while releasing the STO. You are considering institutional investors. unlike retail investors, They will go through every legal element of the STO and they have a team of financial experts who will go through the smallest details. And it is necessary that you brag about legal compliance so that STO investors attract and would consider investing in your project. Also, make sure Investors must have easy access to every legal documentation about your project.
3. Launch a Successful STO by STO Content Strategy
Every successful marketing campaign requires an effective content strategy and STOs are no exception. Your whole STO marketing campaign will depend on creatively designed, professionally sound, and well-structured content.
Reasons why content strategy is important for STO marketing.
- Your content will act as your voice and if you want to allure investors you need engaging content.
- Your content will tell everything about your project to targeted investors.
- Your content will give you a wider reach and a chance to be heard by a lot of potential investors.
Upload SEO-optimized Three to four blogs daily on your website. It includes in-depth knowledgeable articles with graphs, and the statistical IT needs to demonstrate that investing in your STO is worthwhile. It is among the most powerful STO marketing strategies. Sometimes People may require some convincing, and your blog is your greatest chance to do so.
4. Reach Out to STO Experts
STO marketing and launching is a very complex process and even if you consider yourself an expert in STO there always will be some hurdles that slow your process by a significant amount of time. To avoid stuck in these types of situations hire professional marketing services that will ease your burden and help you to come closer on step towards a successful marketing campaign.
There are majorly three areas where you need an expert
- Legal- To complete all Legal paperwork and process you need a professional because legal compliance is a necessary element for STO.
- Technical- Because STO is based on blockchain technology you need a technical expert to help you out with technical difficulties.
- Marketing – Without marketing all technical and legal work is worthless so it is essential to hire a professional marketing service.
5. Use Social Media to Your Full Advantage
In today’s digital era of digital marketing, every business needs a social media presence. Social media channels are important to reach a wider audience as well as to grow your brand value. But because STO’s targeted audience is different than ICO you need to choose a bit different social media STO marketing strategy.
- Make your strong presence on professional social media platforms like Twitter and LinkedIn because all institutional investors prefer professional social media sites.
- You can use other social media platforms like Reddit, Discord, and telegram but they are not as effective for STO but they will help you to build your brand value.
- Use big giants Facebook and youtube as educational and informative visual platforms. Facebook will also help to communicate with the general public as well as investors.
6. Start a Newsletter
Email marketing is the oldest but most effective digital marketing technique. Despite having a strong presence on other social media channels without email marketing your conversion rate never improves.
Because while a potential investor is attracted to your project through other marketing channels, STO investors are not impulsive buyers.
To convert them into your STO investor you will need to communicate with them on daily basis and an email is essential for maintaining the interest of investors and expanding the company network. And Newsletters are an effective way to give your potential investor all the necessary updates and engage them.
Newsletters are considered a highly personalized method of marketing because users have to sign up for them and are delivered straight to their inboxes where they can easily access them whenever they want.
You can convince investors by telling them about your achievements and future improvements. It creates an environment of transparency an institutional investor needs that.
Attracting Institutional Investors Requires an Expert STO Marketing Agency: SAG IPL
To attract institutional grade investors you need an experienced and expert marketing agency. SAG IPL is an industry leader in blockchain development and marketing and has already worked on lots of successful STO/ICO marketing and development projects. SAG IPL will provide you with well-researched and customized solutions specially made for your company which include improving the reputation of your company to arouse interest among Institutional investors for your project. We will help you on every step of STO marketing and development and lead you toward success.
Also Read: What Is the Future of Blockchain, and How Should Companies Use it?
