Marketers' First Step Into Web3 is Tokenization: The New Loyalty Model

Seeding Your Community with Tokens and NFTs is a Required Step That Comes Before Investing in the Metaverse

The rise of social marketing & digital communities 15 yrs ago required us to place our trust in platforms like 谷歌 , Meta , Twitter & 苹果 to not abuse their power as they grew. Because they had eyeballs and engagement, brands had no choice but to surrender ownership of their content, data, and relationship with the consumer to the Big Tech media players. Interactions and transactions migrated to their ecosystem as a price for reaching both larger and more targeted audiences.

What Web 3 Means for Brands: Decentralization

Web3 technology & strategies were born in response to this centralization and are driving a new phase of branded content and community engagement. Many of the initial #Web3 projects linked #NFTs and cryptocurrency together on the blockchain, rooted in collectability, speculation, and borrowed relevance. A brief gold rush ensued, and some marketers salivated at the opportunity to monetize their marketing. While this phase has fizzled out, but it has opened our eyes to the potential, promise, and power of Web3.

With new, open technology that is verifiable and permission-less, Web3 is built on decentralized platforms on the internet that make all transactions open for others to see. It unlocks new value exchanges, business models, and systems that don’t rely on trusting people, corporations, financial institutions, or governments to operate in our best interest. Brands are increasingly curious about blockchain technology, which is a good thing. Experimentation is the forerunner of innovation, but even those just starting to dip their toes in the water must prioritize consumer-centric and fan-focused strategies offering more than just colorful art and cash grabs.

The Opportunity: Reclaim Ownership of Your Consumer Relationship

The objective is to create a meaningful value exchange between creator and consumer. The output will be better content and creative experiences, and the outcome will be stronger digital communities. You hear a lot in Web3 that “we are still early.” But that is only partially correct. Technology is further ahead than strategies and creative execution, meaning we have an obligation to close the education gap more broadly and prioritize the process.

Established brands that spent the past decade driving reach, engagement, and conversion to build online communities can still lead the way. Expanding the marketing playbook with innovative technologies will add new layers of ownership and experiences for brands and consumers.

Marketers can target audience segments more effectively, facilitate more direct audience engagement and incentivize participation, foster community growth, monetize valuable brand IP, reach the next generation of users, and reclaim ownership of their relationship with fans, consumers, and advocates. Putting YOUR brand assets back at the center of your digital architecture is the first real step towards fulfilling the promise of Web3.

(Hint: It's Not Going to Happen in the Metaverse First)

?With economic upheaval and the constant pressure to pursue digital transformation, brands grapple with a deluge of opportunities. Metaverses are virtual worlds or communities where individuals can interact with one another in unique ways. These include games, habitats, and augmented reality constructs. They can be built with blockchains, powered by cryptocurrency and NFTs, and may be disconnected from each other. As of this moment, there is not one connected metaverse, but many individual microverses.

The future of metaverse opportunities for brands is coming. It is exciting, but it is still a "bright, shiny object" and (for most) a distraction.?As Walmart showed last week, very few brands are ready for it because very few of their target consumers are currently engaging there. Roblox is not a Web3 platform that operates on the blockchain.

What we need from the initial wave of Web3, the next-generation Internet, might be less of an escape into metaverses and more invention that gives us emotional practical grounding, expanse, and functional utility. The critical first step is expanding the knowledge, expectations, and behaviors of Web 2.0 consumer audiences and target segments.

Brands that seed and distribute tokens will incentive their consumers and fans to engage, thus improving the quality of the community to increase the “value” of those tokens. Aligning those incentives to convert those audiences into Web3 communities is the job of marketers. Digital collectibles are fine, but that value is directly tied to their utility and application as keys to accessing something desirable (content, experiences, etc.) or as a reward for participation. (see: Starbucks' Odyssey)

It's Actually Simpler (and Cheaper) Than You Think

The barriers to entry are disappearing. Tokens and NFTs are more accessible than ever. Proof-of-stake blockchains have eliminated all concerns about energy efficiency because the transactions are validated through randomly selected miners. Almost every platform, whether a third-party exchange or a white-label NFT platform, should enable fiat and credit cards. Even more important, NFTs and tokens can be given away for free.

Bringing them along with us will be more evolution than revolution. "Web2.5” will bring together the innovative features of Web3 (blockchain openness, smart contracts, digital creative, composability, and direct-to-community engagement) with the proven web2 models (search, social, influence, creation, and amplification).

Missteps are to be expected on the path to progress, but skipping steps and jumping ahead before consumers or communities are ready...? Let's not fall into that web