is advertising for ICOs unethical?

[harrypotpot]

Very good question. I also do not know exactly why new projects spend so much money on advertisements. In cryprocurrency, advertisement is worth it? It there any set criteria that binds a project to collect only a certain amount of money? or one can collect as much as it can? But I think cryptocurrrency is such platform where advertisements rule and without advertisements, you can not get the attention of traders and investors. That is why I think it is a bit different from stock market. It is decentralized and it is for all people around the world.

That is because, they are thinking for a long term investment back from their project. The best way to do that is to strengthen their marketing, and even the profit is not really obtained on the ICO stage, once their project has been launched, there, the profit will going to be steady. They will need just to be successful in funding their project initially.

[Altcoinrusher]

I hope you could provide us with proofs to support your claim and could provide us with much clearer insight on that matter. As what I've mentioned earlier, BUDGET is already allocated even before the start of the ICO because most projects set aside a certain portion of their total token allocation for marketing purposes but that BUDGET don't come from the proceeds of the ICO, rather, it was a token allocation and not ETH or BTC of fiat proceeds, I hope you know what I mean.

[BlueStackz]

How did you get to know that they spend that much to promote their ICO? I don't really think so, and there's no site or place where they show how much ICOs have spent, though I do know they spend a lot of money, but most of them do recover more than that and even have more money. And that's one of the reasons ICO is not meant for everyone, if you don't have a good idea and you can't afford what it will cost, then its better to stay off. And not what these guys do these and stuffing the crypto community with lots of useless ICOs, like seriously.

[DAVETUN]

Advert is a necessary requirement for the success of an ICO, there is no possibility in your submission, except for scam project, no reasonable developer will use 90% of  fund raise for advert, it is ethical to advertise for investors awarness and adoption.

[begau]

I've noticed many ICOs have to spend a lot of money on promotions and advertising.

For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.

Therefore, they only really raised 1 million for the project.

Isn't this unethical?

If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.

This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?

And how do we know if an ICO is using an ethical ratio?

According to my understanding, in business to achieve the set objectives, we cannot ignore marketing and advertising strategies. Therefore, ICOS advertising projects and spending a lot of money are understandable. Because it will be an attraction from known investors. You cannot develop your own projects without advertising.

[rarkenin]

The ICO advertising problems are not only problems of teams and there is a great chance to upgrade the old version of the advertisement. It is not unethical to advertise the ICO anyway.

[ataki]

For bounties ICOs spend only 1-2 % of their total supply and for future marketing activities around 5-10%. Marketing activities has their limits and it would not be justifiable to spend 50 % of the funds for marketing.

[Altcoinrusher]

For bounties ICOs spend only 1-2 % of their total supply and for future marketing activities around 5-10%. Marketing activities has their limits and it would not be justifiable to spend 50 % of the funds for marketing.

That is more ideal proportion and not the one that is posted in OP which way too absurd. No team in their right mind would spend big budgets like 90 percent for marketing alone which is taken from ICO proceeds.

[rarkenin]

For bounties ICOs spend only 1-2 % of their total supply and for future marketing activities around 5-10%. Marketing activities has their limits and it would not be justifiable to spend 50 % of the funds for marketing.

That is more ideal proportion and not the one that is posted in OP which way too absurd. No team in their right mind would spend big budgets like 90 percent for marketing alone which is taken from ICO proceeds.

Well, some projects can use their marketing budget for spreading awareness about the project on online public platforms. The amount totally depends on the token sale allocation and the interest to the project.

[adekogbe]

I think what is ethical is for ICO or any new crypto projects to do whatever it takes to make that project a Success.
so if that involves spending a lot of money on advertisement, promotions, organising seminars and talk shows and going for events or other things in order to bring in investors into that project and make it known to more people in that niche then I believe it is not unethical.
What is unethical is making people invest in a project and not taking the required steps to make that project a success

[GregH37]

Very good question. I also do not know exactly why new projects spend so much money on advertisements. In cryprocurrency, advertisement is worth it? It there any set criteria that binds a project to collect only a certain amount of money? or one can collect as much as it can? But I think cryptocurrrency is such platform where advertisements rule and without advertisements, you can not get the attention of traders and investors. That is why I think it is a bit different from stock market. It is decentralized and it is for all people around the world.

That is because, they are thinking for a long term investment back from their project. The best way to do that is to strengthen their marketing, and even the profit is not really obtained on the ICO stage, once their project has been launched, there, the profit will going to be steady. They will need just to be successful in funding their project initially.

No matter what they think of the project future, an ICO would never spend more than 30% of the total project fund on promotion; I don’t know where the op got his idea from.

If you talk about project being launched, if they have spent virtually 90% of the fund on promotion, then what will they use to develop the project they want to launch, if there is any ICO doing this, then it is clear that they don’t have a product, and they are just trying to use the system as a money Ponzi scheme.

A genuine project will never waste money that much on promotion, yes to promote is quite expensive, but we are also in this industry together and we all know how things operate, so that ICO cannot just come here and give us a blatant lie.

[freedomgo]

I think what is ethical is for ICO or any new crypto projects to do whatever it takes to make that project a Success.
so if that involves spending a lot of money on advertisement, promotions, organising seminars and talk shows and going for events or other things in order to bring in investors into that project and make it known to more people in that niche then I believe it is not unethical.
What is unethical is making people invest in a project and not taking the required steps to make that project a success

We allow ourselves advertise their project because we believe they are legit and have a potential to succeed.
However, there is a period only for advertising, in ICO, it's only in the crowdfunding stage but the crucial stage is after they collected the amount raise and how are they going to utilize it.

[kaya11]

I've noticed many ICOs have to spend a lot of money on promotions and advertising.

For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.

Therefore, they only really raised 1 million for the project.

Isn't this unethical?

If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.

This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?

And how do we know if an ICO is using an ethical ratio?

That is why some are just promising the bounty participants to give the payment but most failed to do so. Or another case is that they lessen the token allocated leaving the participants to retaliate and another story is bounty managers(most devs) run away with the money raised, in short a scam project.

[Sultanar484]

I've noticed many ICOs have to spend a lot of money on promotions and advertising.

For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.

Therefore, they only really raised 1 million for the project.

Isn't this unethical?

If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.

This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?

And how do we know if an ICO is using an ethical ratio?

I have never found any project that spend $9M in promotion where they spend $10M from token sale. Do you have any proof in this regard?

[thaliaand]

I've noticed many ICOs have to spend a lot of money on promotions and advertising.

For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.

Therefore, they only really raised 1 million for the project.

Isn't this unethical?

If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.

This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?

And how do we know if an ICO is using an ethical ratio?

I have never found any project that spend $9M in promotion where they spend $10M from token sale. Do you have any proof in this regard?

Yeah, I've never seen this case too. What kind of management that spend more than 50% of the raised fund for promotion ? I mean, your example is just exaggerating. It is illogical with that fund allocation. Commonly ICOs allocate the fund for marketing and promotion not more than 10% of the total supply or fund collected.

[Ucy]

I think the 9 million for promotion alone is an exaggeration. Projects that pays in tokens don't even spend that much on promotion. Most usually state the percentage for  promotions and they are normally less than 20%.

[wxxyrqa]

I think the 9 million for promotion alone is an exaggeration. Projects that pays in tokens don't even spend that much on promotion. Most usually state the percentage for  promotions and they are normally less than 20%.

I ask you to notice another moment that companies pay tokens, as well as pay for work and advertising with their own tokens, which have no value.  In fact, new projects have no product and there is no company as such, and therefore it is very difficult to talk about real value here.

[Supercrypt]

I think what is ethical is for ICO or any new crypto projects to do whatever it takes to make that project a Success.
so if that involves spending a lot of money on advertisement, promotions, organising seminars and talk shows and going for events or other things in order to bring in investors into that project and make it known to more people in that niche then I believe it is not unethical.
What is unethical is making people invest in a project and not taking the required steps to make that project a success

I believe that there is no one in this forum that will say spending money on promotion is unethical, that is not the ball of contention here, we know that it cost a lot to run promotions to get people’s attention, but what becomes unethical is when the money spent promotion becomes far more than the project cost.

How is that ethical, if they spend money on promotion and they have created the awareness necessary and it is time for people to really come for the product, then they get stuck because they don’t have enough supply having spent what they would have used for production of advertising few ones that they have.

[Kafanchanchan]

I don't know what the rule says, but on a personal level I don't think it is, most of these ICO projects won't sell a good number of their tokens if not soft such promotions, so it becomes a necessity kind of to market these tokens to the right investors. That isn't in anyway suppose to be a crime.

[styca]

I've noticed many ICOs have to spend a lot of money on promotions and advertising.

For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.

Therefore, they only really raised 1 million for the project.

Isn't this unethical?

If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.

This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?

And how do we know if an ICO is using an ethical ratio?

There are always ethical questions about any advertising, whether in crypto or in the wider world, around the point that it's just a hard sell of the product rather than a balanced view.
Regarding the % of budget spent on advertising, that should really be declared - so long as the company is open and honest about what they are spending on what, I don't think it's an issue.