Storytelling in initial coin offerings: Attracting investment or gaining referrals?

Given the scarce insights around the effectiveness of different brand communication strategies in Initial Coin Offerings (ICOs), this work, through four experimental studies, investigates the role of storytelling in affecting consumer responses to ICOs. Drawing on Elaboration Likelihood Model, study 1 uncovers the differential effect of two storytelling modes (i.e. factual vs emotional) on consumers' amount of investment and online brand advocacy in ICOs. Study 2 examines the moderating effect of endorser expertise (i.e. high vs low) on consumer responses to ICOs. Study 3 investigates the framing of the storytelling message (i.e. loss- vs gain-framed) whereas study 4 explores whether the cryptocurrency purpose (i.e. altruistic vs profit-oriented) affects consumer responses to ICOs. Our findings uncover the differential benefits (e.g. financial vs reputational) that storytelling modes bestow to consumers and provide directions on how issuers should strategize their brand communication during ICOs.