I have laughed and joked for long enough about Hive's marketing arm known as Valueplan due to its spending approach and what appears to be a lack of oversight into certain projects. Hive as we know is decentralised so we can only take people at their word to follow through and carry out these projects that are funded are throughout the globe and the end result is we get an increased exposure and user sign up to Hive.
Those who know my posts are aware I heavily scrutinize some of the projects that Valueplan invest in. They look good on the outside but when you delve into the wallet payouts , some of them quite frankly taking the piss and I have leaned heavily on some of these entries for comedy posts. But I decided to take a more objective approach to this one and play devils advocate in a way with myself so I can take a more serious approach to looking into the marketing going on in Hive. I have a career looking at costs and how to keep them low in the business so I decided to crank up an excel sheet and go to work. The rally car is the largest outflow of Hive funds so it is best to start this series of posts with the car. There will be no names mentioned in this piece as I am looking at the numbers and not people. Numbers never lie.
The rally car is Valueplan's largest marketing campaign. Now there is no doubt it is making waves in the WRC with an even bigger car this year and most of the feedback has been positive on Twitter, X and Hive. The videos have been good and the photos look great. The drivers look happy. Everything is rosey in the garden. But there doesn't seem to be anyone looking under the hood on this except for the people who fund it directly. It is meant to be all of us by the way. But for practical purposes 5 people that are Hive legends have taking the reigns and have been deciding where to spend the funding. And this brings us nicely onto the largest project.
Motorsport is a considerably expensive marketing strategy to be in. If you look at F1 for example , it is mostly billionaires or major crypto exchanges that can afford to have their branding on one of the cars.
Hive did not just want to put our branding on a car. We went all in and purchased the car. Well 20k of this was the Hive drivers but Hive funded the rest which complicates things but anyway.... I am sure that is all sorted out. The Valueplan guys said the plan is to sell the smaller rally car (2023's car) at the end of the season as they are using it as a spare during this current season.
So if we take a look at the running costs from January to April. Payouts can be seen in the Valueplan wallet so you can easily see the description of what the funds are being used for. Most of the payouts are actually in Hive rather than the usual HBD. I presume it is for ease of conversion / withdrawal for Hive and not HBD to be used this way. Now the running costs of the car are only one element. I have also included the marketing costs for the photography and videos taken of the car at the events. As I have mentioned before I am having an objective look at the costs and I am not coming at anyone. We speak around a decentralised system and we all have a stake in the platform so it is important that everyone knows the exact costs for these major projects as a Community. Let us look at the figures before we go further. I will point out that I converted the Hive price to USD value by averaging the daily Hive Price for each month based on the Hive daily close figure to get the best estimate on the USD equivalent for Hive at the particular time of payment.
Source
Payouts by Valueplan Rally Car
| Month | Hive | USD Value | HBD | HBD USD Value | Total USD Value |
|---|---|---|---|---|---|
| January | 91,358.07 | $30,342.96 | 18,126.89 | $18,126.89 | $48,469.85 |
| February | 160,124.76 | $51,218.94 | 20,000 | $20,000 | $71,218.94 |
| March | 113,160.75 | $46,998.95 | 0 | $0 | $46,998 |
| April | 65,129.88 | $22,879.29 | 0 | $0 | $22,879.29 |
| Total Jan -Apr | 429,773.47 | $151,440.14 | 38,126.89 | $38,126.89 | $189,567.03 |
Payouts by Valueplan Ref Rally Car Marketing Costs
| Month | Hive | USD Value | HBD | HBD USD Value | Total USD Value |
|---|---|---|---|---|---|
| January | 0 | $0 | 5,000 | $5000.00 | $5000.00 |
| February | 0 | $0 | 0 | $0 | $0 |
| March | 0 | $0 | 0 | $0 | $0 |
| April | 0 | $0 | 1000 | $1000.00 | $1,000.00 |
| Total Jan -Apr | 0 | $0 | 6000 | $6,000.00 | $6,000.00 |
Total Spent on Rally Car Jan - April 2024
Hive : 429,773.47
HBD: 44,126.89
USD Equivalent : $195,567.03
% of Valueplans Total Spend Hive : 65.82%
% of Valueplans Total Spend HBD : 13.28%
% oF Valueplans Total Spend USD$: 34.01%
Just looking at the figures , all of the payments are made in Hive with the exception of 2 payments. There is a discrepancy in January's figures as 18,126.89 was mistakenly paid in HBD but it was meant to be paid in Hive. This was been rectified by Valueplan in May and it is mentioned in their quarterly post. There was 20,000 HBD sent to another account in reference to rally car3 project. I presume this is the 20k that was paid to owner to cover his share of the original rally car but I could be wrong on this. If I am right then the sale of the rally car will be completely Hive's surplus which cuts out any complications. The rest of the payments are made in Hive.
If we look at the totals , 429,773.47 Hive was paid out for various entry fees, insurance , cost of car purchase etc. This equates to $151,440.14. When we add the HBD payouts the total cost from January to April is $189,567.03.
I have decided to add up the cost of marketing also and this came to 6000 HBD between January and April. I took the HBD figure to be $1 as more often than not from January to April , the HBD closing price was over the peg of $1. There are more costs in May but let us stick to Jan to April for now.
When looking at incoming into Valueplan's wallet we see a 3058 Hive refund into the wallet but this is a loan and was paid out again so it does not affect the totals above.
Cost/ Benefit Analysis
It is relatively unknown whether the $195,567.03 spent on the car in the first 4 months will return marketing revenue from the various social outlets and traditional media such as the WRC magazines, newspapers etc. The WRC events are attended by circa 300,000 per event with over 1 billion worldwide TV viewership apparently but I do not know if these are 100% accurate. Twitter photos, Hive posts and videos of the event have been liked by the Hive community mostly. It is hard to gauge. The rally car is televised in the country it is in so it would get a certain amount of exposure here as well. Hive has made the car its face of the blockchain so there is a benefit to this and with the upcoming bull run some say that we have everything up and running to get the maximum marketing benefit at the right time.
But for a blockchain that is 312th in the rankings Coinmarketcap and looks like a rudderless ship sometimes. Is the rally car worth the substantial outlay over the last 4 months? Does the cost outweight the benefit? There are groans that a rally car that promotes web3 is not the most beneficial place to have a marketing campaign. Rally car enthusiasts are not a whole lot interested in Web3 and the money would be better spent in the web3 space directing a campaign to users who are already in the field of web3 and crypto. The good news is that the car is based in Europe and is racing in pretty affluent countries where if a user signs up and investment could be substantial. It is really hard to know.
Questions Around Budgeting
Looking at the descriptions of some of the payouts it is hard to know whether there is a set budget for each month. Take one description for on 15th January there is a 15,084.913 Hive payout which is the equivalent to 5000 HBD.
-15,084.913 HIVE
Jan 15, 2024
Rally Car | Monaco | logistics and accommodations for the event | these are overall costs not broken down by line-item | 5000 HBD
There are 5 other payouts totaling 31,922.35 Hive for the Monaco event and the description is "General Event Costs."
Now I am not saying there is anything untoward going on here but do we have a budget for each event or is it a case of charge the expenses and pay for it later?. Say for example the Monaco Grand Prix is going to cost us 70,000 Hive so at least then we can know what the budget is so that the Hive Community in advance how much each event is going to cost. I know expenses are not a perfect science but you would be surprised how close you can get if properly planned and hotels booked well in advance. Being in the accounting world if an employee put down a reason being "General Costs", I would not be paying him or her a penny until they explain what these costs are.
Is there a plan or proposal with this sort of investment for the future. for example on how much is going to be spent in Year 1 , Year 2 and Year 3? When the car is sold will there be an debit into the Valueplan wallet? The term "donation" in the descriptions concerns me. I know this is for tax reasons but from a legal perspective a donation doesn't hold much sway in the legal ownership of an asset.
Is there an end game in place with the car or is the Hive centralised marketing department continually going to spend 34% of their total USD funding on one project?
Should the proposals be in a business plan format so the people who are successfully funded have goals and targets so they continue to get funding. Governments use this approach when funding certain projects. The Hive users can look at the plan and not be so suspicious when vast amounts of funds are given to one project.
Or regarding to social media , track the metrics about the value of having a car in a WRC event.
I am aware that the total cost of the car was probably spent during the first months of the year so it will be interesting to see the total spend for the year given that is is coming in at $189,567.03 after 4 months. Is there a projection around what we are looking at in total . Entry level F1 sponsorship starts at $1 million at the mid to lower end of the grid but the exposure pays for itself. Now I am not saying Hive should fund a bumper sticker for a Williams but you might get an idea of the cost.
Summary
So in summary there are clear benefits of having the car on the road during this bull market. There are also high costs involved that should not go out of control because we are in trouble here if they do. The blockchain does not have enough volume to sustain this level of pressure on the selling side and I would be also concerned the car could have a negative effect on the Hive price. The marketing and photography has increased the readership and activity around the car so the 6k spent is worth it in my opinion as it exposes the car much more to the Hive Community. Last year I heard there was a Hive car and you had to search for images. But this year there is plenty on X and Hive itself as well as a website. I think it is up to the user to decide whether it is positive not just from a "Wowwee we have a car. Great Job everybody". We really have to put our marketing hat on here and think about if the money that is being spent is actually worth it. Valueplan was set up to be the marketing arm of Hive because before this there was no Hive Marketing. Some would argue if there is still no marketing but this is it. This is it right here. But it is up to the Community decide whether it is beneficial or not. Valueplan are setting up measures to be more transparent such as plug in proposals so there is more consensus around what is funded. The good news is there are more projects getting funding this year with a more diverse range of activities. Hackathons is one such event and I think this is where the real benefits might be.
Thanks for reading.