Exclusive Reveal of Exchange User Acquisition Rules: $50 to Buy One New User

Author: https://mp.weixin.qq.com/s/DqNKXZ8xwlYCz6xh8yuo9A

Late at night, after finishing a day of crypto trading, you lie in bed exhausted, opening Tinder to match with a stranger for a wonderful date. Suddenly, an advertisement from a crypto exchange pops up, stating "Complete your first trade and instantly receive xxx USDT reward." You can't help but sigh in disappointment. Unable to sleep, you open a video platform to watch an episode of your favorite TV series, but just as the plot reaches its climax, a 15-second ad interrupts—it's not the Macau Grand Lisboa, but another crypto exchange. At this moment, you finally can't hold back and curse, "F**k you, crypto!"

Crypto exchanges are invading the daily lives of ordinary people through advertisements, and behind this is the growth ambition of CEX.

According to official disclosures from Binance, by the end of 2024, the platform's global registered users will exceed 250 million, an increase of about 47% compared to 2023. While the results are encouraging, it also means that for top exchanges, the number of new users available in the industry has become saturated. To acquire new users, they must actively stimulate the demand of consumers outside of crypto and extend their customer acquisition efforts into Web2.

Who is quietly advertising to us?

To satisfy the ambitions of exchanges, a lesser-known growth department is placing ads in the corners of our cyber lives—Paid ads.

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

"Traditional crypto users mostly interact with the exchange's BD, who not only connect with B-end project parties but also engage deeply with C-end communities, maintaining good relationships with KOLs, website owners, and rebate team leaders. Sometimes they even act as customer service representatives, helping ordinary users solve problems. Some BDs from large exchanges also grow into KOLs, leveraging their personal influence to amplify user growth."

However, as user growth in the industry hits a bottleneck, the role of BDs has become increasingly limited. The difficulty of reaching new users has grown, and maintaining existing customer relationships through differentiated strategies to "poach" competitors has become the daily routine of BDs.

Thus, when conventional user growth methods approach obsolescence, Paid ads have become a lifeline for user growth at exchanges.

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

"We purchase advertising resources and placements on media platforms like the Apple Store, Google, TikTok, and Facebook, bringing some new users to our exchange based on the algorithms and audience targeting of the media platforms," Hamburger explained.

Different growth methods also determine the size of the team. According to Hamburger, although Paid ads and BD are parallel departments, there is a significant difference in numbers. "For example, in our exchange, there are no more than 20 colleagues engaged in Paid ads globally."

Although the number is small, it is still sufficient. Paid advertising can be divided into self-service and agency service. Self-service means the exchange's Paid ads team collaborates directly with media platforms, uploading materials, setting up ads, checking effectiveness, and making real-time adjustments; agency service means outsourcing the advertising work to an advertising agency, which meets the need for a small team but many advertising platforms.

The use of Paid ads in the exchange sector is not new; it has only been heavily invested in in recent years. According to insiders, Binance began experimenting with Paid ads in 2021-2022, but only started significant investments in 2024, while OKX entered the field even earlier.

"Medium-sized exchanges typically have an annual budget of about $2 million for Paid ads, while large exchanges will spend even more," Hamburger explained to Odaily regarding the budget for paid advertising, but he declined to disclose his exchange's annual budget due to confidentiality reasons.

However, regardless of the specifics, compared to the advertising budgets of Web2 giants, the investment from crypto exchanges is negligible. 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 exceed $1.7 billion.

Although there is a gap in profitability, this also indicates that for CEX, the user growth model of Paid ads is still in its early stages and not yet mature. "In theory, first-tier exchanges have a huge demand for Paid ads, and as long as the effectiveness is good enough, the budget can be limitless," Hamburger confidently stated.

Ideally, $50 to acquire a new user

According to Hamburger, the ads they are currently running are indeed effective for new user growth. One of the advantages of Paid ads compared to BD is the ability to clearly calculate ROI* (Odaily note: ROI stands for Return on Investment, measuring how much net profit can be generated for every dollar invested), allowing for the evaluation of the effectiveness of ads on different media platforms. If a platform's user demographic is younger and more receptive to crypto, then the effectiveness of the ad placement will be better.

"Typically, the Apple App Store has better ad performance, while ads targeting mobile manufacturers do not perform well," Hamburger stated. "However, taking large media platforms as an example, achieving $50 per new user is already a good situation."

Although this sounds costly, Hamburger explained that from an ROI perspective, if a budget of $1 million is invested, the ROI can be corrected within a maximum of six months.

At the same time, the effectiveness of ad placements is also related to the materials used. Generally, for new users, ads featuring first-trade rewards and other incentives are used. Besides that, Hamburger mentioned that ads promoting the advantages of cryptocurrencies and the historical investment returns of Bitcoin are also relatively effective in attracting external users.

Regulation remains the main obstacle to the development of Paid ads in the crypto space

By the end of 2024, while taking a taxi in Beijing, I passed by the Liaoning Building, and a friend next to me pointed at it and said, "If you did advertising placements in Web2 ten years ago and didn't enter this building, you wouldn't be considered in the industry." My friend was describing a golden era for advertising placements in Web2, but ten years later, the spring for advertising placements in Web3 has yet to arrive.

"Due to different countries and policy restrictions, some major media platforms are still resisting advertising placements for Web3," Hamburger revealed to Odaily. "For example, countries and regions like the United States, Hong Kong, the United Kingdom, and Canada explicitly prohibit unqualified exchanges from advertising." Furthermore, the advertising policies differ for various exchange products; some may allow spot trading ads but prohibit futures or stablecoin investment ads. Some exchanges may use disguised materials to bypass reviews, but the risks are very high.

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

But globally, regulation still maintains a cautious attitude toward exchange advertising placements, which is a major reason why the scale of exchange advertising cannot compare with that of Web2 companies.

The biggest problem in Web3: Not enough old users, not enough new users

Despite the current situation, Hamburger remains confident about the future of advertising placements for exchanges. "The biggest problem in Web3 is still the user growth issue," and Hamburger believes that first-tier exchanges in the entire crypto industry have both the demand and the responsibility to use Paid ads for user growth.

Amid the uncertainties of regulation, costs, and conversions, Web3's efforts to attract new users through Paid ads are still in an exploratory phase. However, for mature large platforms, it is no longer an option but a necessary step to take.

In the next phase of competition, it will not only be about who has a bigger budget but also about who understands users better and who understands growth better. The real competition may just be beginning.