Web3, Metaverse, and NFTs are hot topics in today’s global C-suite. How is Web3 going to disrupt or enhance our ability to create and communicate value? Do we need an NFT strategy?
After all, as Mark Cuban once tweeted, “Writing a business plan is easy. Getting people excited about it is easier. Adapting the plan to the real world and getting results is hard.”
There’s a ton of hype out there about Web3 right now, no doubt. However, behind it we see a transformational intersection of emerging technologies. CVE is here to help you find the signal in the noise so you can understand this rapidly evolving space. Crucially, we’ll help you make your learnings actionable in a meaningful way.
Here are three things you need to know about Web3 to get started.
1. Web3 is about incentive alignment
It’s been said that Web1 was about digitizing information at scale for the first time. Our interactions with Web1 from the 1990s into the early 2000s were largely information-seeking activities. Very few people had the technical know-how to share content.
Web2 ushered in the birth of social media and sparked the creator economy. Web2 companies did a fantastic job of capturing value and creating high switching-costs, while drastically increasing barriers to entry for new competitors. User experience however, hasn’t evolved so positively. The novelty of posting to news feeds for the first time gave way to distrust and concerns over data misuse. Content creators have grown weary about what they view as a disproportionate share of the value being created for the platforms. Enter Web3.
Web3 shifts the narrative from value extraction to value sharing. It does so by utilizing underlying blockchain technology to align incentives between companies and their customers. New brands can now reward early adopters with tokens, whether NFT or cryptocurrency. They can also bootstrap community and overcome the “cold start problem”, where initial momentum is harder to achieve in the absence of existing users or customers. Meanwhile, incumbents can increase engagement through co-creation or leverage the same Web3 toolkit to reward loyalty.
Web3 allows users to own their digital identities and data, unlocking the value and transparency that comes with that. Content creators will be able to take their established social graphs with them to new platforms, no longer feeling trapped by the idea of having to start over from scratch. All this will result in increased platform competition, creating pressure to consistently innovate and improve experience.
2. NFTs are more than profile pics
The meteoric rise of NFTs has been impossible to miss. According to DappRadar, the NFT marketplace, Opensea has had 405,000 users conduct 2.21M transactions. That represents $2.13B over the last 30 days in just one NFT marketplace. While massively popular projects like Bored Apes and Crypto Punks have become synonymous with NFT, it’s important for brands and innovators to remember that profile pictures are only the first widely adopted use case of non-fungible tokens.
While brands might have an opportunity to reward fans and engage community members with an NFT, it doesn’t mean they should. NFTs and other Web3 presences shouldn’t be viewed as one-time brand activations or judged by traditional digital metrics like impressions but instead as a new way to build – whether community, product or service.
NFTs are already evolving beyond profile pictures and are amid a shakeout (See Google Trends screenshot below) where only the projects with the strongest community will remain relevant. As a result, we’ll see a shift towards utility NFTs, in other words, a representation of a real-world value. For example:
- decentralized finance (DeFi) applications allowing early adopters to earn an additional yield on investments
- real estate applications representing property rights and fractional ownership
- musicians selling music directly to fans while keeping their rights to royalties.
And for marketeers? The most innovative brands will find ways to enhance the relationship with their biggest fans by leveraging NFTs to unlock unique experiences, whether virtual or in the physical world.
3. Authenticity is key in Web3
Marketing has always been about creating and communicating value. Whether you are looking at gaming, metaverse or NFTs, your efforts need to go beyond just showing up in the space. Instead, you must identify opportunities to co-create and natively add value. With all the attention the space is getting, it’s hard to resist the urge to hop on Twitter and type “gm”. But unless doing so sounds natural in your brand’s voice, it will come across as try-hard.
As with all new opportunities, it’s important to take stock before diving in. Marketing in Web3 is no different. Examine what you are trying to accomplish, who you are trying to reach, and where you are trying to go as a brand. Next, begin to explore the various Web3 ecosystems. Understand what it might signal to get involved in the Solana community instead of Ethereum, or Sandbox over Decentraland.
For example, many Web3 communities interact on Discord but before you launch one for your brand, build a plan for managing that community. How will you deal with a community where the conversation unfolds in real-time and often has additional nuance that traditional communication channels don’t?
Rapid shifts in the Metaverse mean it’s the well-prepared brands who stand poised to seize the opportunities presented by Web3 and all it offers. Organisations who take the time to not only write the plan but adapt those plans to the reality of the marketplace and their consumers’ lives will win. CVE’s expertise can support brands as they take time to understand, participate, communicate authentically and WAGMI.