Established companies and consumer brands have a unique advantage in the Web3 space, particularly around Web3 marketing and consumer onboarding. How brands approach their activations, though, will determine their success in a changing digital landscape.
When the beginnings of Web2 emerged back in the early aughts, many industries overlooked the potential that services like music streaming, social media, and user-based content had on how the world would interact in the future. Years later, those same industries rushed to catch up with the newly emerging world. Companies like Warner Music Group struggled to make up for losses amid the newly formed music streaming industry. Broadcasters and television giants faced challenges in competing with streaming services for the first time, brick and mortar retailers struggled to compete with e-commerce services that could offer quick delivery, low prices, and a wide selection of goods from around the globe.
Web2 didn’t change the world, it created a new one where forward-thinking companies like Facebook, Amazon, and Netflix became dominating forces in a new global economy. These companies changed the ways that consumers and users interacted with the world around them, forcing former industry giants to adjust to this changing landscape or risk becoming obsolete.
Today companies around the globe are quickly migrating into Web3. However, with low user numbers on metaverse platforms and slower than expected user adoption happening in the space, companies need to shift their understanding of what it meant to build a successful brand in the past and focus on building a community of users that want to interact with their brand in a new digital space.
While the Web2 space created new revenue and growth opportunities centered around creativity, the Web3 space solves issues that were brought forth in the Web2 era – namely around data misuse, digital ownership, and authentication. Estimates project that the Web3 space will exceed $81.5 billion in valuation by 2030 – this is a significant increase from the $3.2 billion it was estimated to be valued at in 2021, just a few months ago.
Web3 provides a method for users to own their data, and for data to be used transparently in a way that allows individual users to know exactly who has access to their data, and what it’s being used for. Web2 spaces like Facebook highlighted how user data could be used to monetize platforms in new ways. The Web2 data space opened doors for small businesses to hyper-target consumers in niche demographics, but also enabled data misuse on a mass scale. The Cambridge Analytica scandal of the late 2010s exposed how data misuse could be used as a tool in political warfare and demonstrated how the Web2 monetization structure had major societal drawbacks.
The era of Web3 data ownership will usher in new use cases and experiences for users. The restructuring of data ownership will change how people interact online as a whole, and will allow users to monetize their internet use on a personal level. By controlling who is allowed to buy their data, users become the dominating powers in the Web3 space. They can control when their data gets used, and the transparency of blockchain technology assures that users can see who is purchasing their data and for what use. This new era for data ownership democratizes the internet in a way that was never possible before.
Beyond data ownership, Web3 offers unique approaches to digital ownership and authentication that allow both individuals and corporations to create solutions to the inherent flaws of the internet’s past.
Online creators are able to tie unique ownership to the content they produce and put online, and they can sell or transfer that ownership as they please without worrying that it can be replicated or stolen from them.
NFTs (Non-Fungible Tokens) tie a digital object such as a piece of art or a membership to an individual’s cryptocurrency wallet. As long as that wallet holds the NFT, that individual is the owner of whatever that NFT represents. For companies, NFTs pave the way for added brand activations, the ability to connect further with customers, and an authentication process that requires no effort or infrastructure to be built internally.
NFTs have vast potential to upend global trade as we know it, whether it be in digital collectibles, physical goods, products, or services. These tokens offer ways to authenticate products, transfer IP ownership or grant access to events, memberships, and services all while allowing companies and organizations to build around embracing a sense of community over a product. For consumers, the benefits of Web3 will eventually force corporations and smaller companies to rethink their approach to creating an audience. For companies and corporations, getting ahead of the demand will only prove beneficial in the long run.
Established companies and brands looking to integrate with Web3 have a unique advantage over Web3 companies and native startups in that they already have an audience that understands their product. With slower than expected user growth and a need for education in the consumer-facing side of the Web3 space, Web3 companies and native startups are facing challenges in not only having to market their product but in educating and onboarding users as well.
The Web3 space is ever-growing with new infrastructure being built by countless development groups around the globe. There is no question that the space is ready for an influx of new users, but challenges in Web3 marketing mean that users will likely have to be onboarded in creative ways either by educating them on the benefits of the space or creating a product that is appealing enough for them to begin using without understanding the industry as a whole.
For brands looking to expand into Web3 this means that, without educating their consumer-base, their activations and integrations could fall flat.
There is such a thing as being too early, especially in an emerging and rapidly changing tech space. Right now is a good time for brands to begin looking at how they can integrate with Web3 as part of a long-term vision while avoiding short-term thinking in the space. Take the time to understand how your individual brand or product fits into Web3 on a user-facing side.
It will take more than just advertising activations in a Web3 space to onboard new Web3 and metaverse users, especially among Web2 users that lack a foundational understanding of topics like how to open a cryptocurrency wallet or individual privacy in this emerging space. If your goal as a company is simply to advertise to existing Web3 users then, by all means, don’t worry about onboarding. If your goal as a company is to get ahead of the curve on blockchain adoption, though, consumer onboarding should be your highest priority above selling a product in the metaverse.
In these early stages of metaverse adoption and metaverse brands, established brands can use their existing success to educate their consumers on Web3. Coachella, the California music festival that takes place each spring in Indio, California, took a unique approach to community onboarding by giving each ticket holder a free NFT at the start of the festival. It was clear that the festival intends to migrate its entire ticketing infrastructure into the NFT space in the future (the benefits of this are virtually endless), but it was also clear that the festival understood that it would require years of groundwork in order to get there.
Coachella’s In Bloom NFT collection provided an attractive onboarding strategy that helped expose new users to the crypto space. Each ticket holder was given instructions on how to claim their NFT, and how to open a cryptocurrency wallet on FTX. Users were incentivized to open an FTX account and claim their NFT with special perks given to holders at the festival, such as a special entry line and other prizes depending on which NFT the ticket holder got. To build community, the festival opened its own Discord server for holders of the In Bloom NFT where users could discuss the festival, share experiences, and help onboard other users into the Web3 space. Using this growing community and its existing onboarding efforts, the festival will eventually be able to fully integrate into the Web3 space in the future without risking failure. For FTX, onboarding partnerships such as this one are what has made the platform the fastest-growing exchange in the crypto market.
It will take more than just a few Twitter threads to demonstrate to users why migrating to Web3 can provide benefits to them.
Think creatively about how your brand can approach Web3 onboarding using its existing platform. For Coachella, onsite activations and perks like free ferris-wheel rides, ticket upgrades, and special entrances to the festival were an easy and effortless way to incentivize festival attendees to not only learn how to open a cryptocurrency wallet, but open and use one. Plus, they got a free and limited edition NFT to start off their collection.
Further brand activations like live events in the Decentraland metaverse space helped pique interest among music fans that were not attending in person. H&M, the popular Swedish clothing brand, created a similar brand activation with H&MBeyond, a digital showroom that builds upon the H&M brand ethos not to sell digital clothing in the metaverse, but to create a multi-use digital space focused on community building. The result was a stunning digital space that encouraged attendees to discuss and interact with topics related to the H&M mission—topics like sustainability, fashion, and art served as an extension of the H&M brand inside the metaverse, without selling a single product.
Marketing in Web3 is largely focused on building community and working with consumers on building a product that benefits that community in some way. The H&MBeyond project, for example, provided a digital space to discuss important topics related to fashion and sustainability. Outside of selling consumer goods, the H&M brand has dedicated its mission to encouraging sustainability in the fashion industry—so a metaverse activation focused on that aspect of its brand was a natural way to encourage community growth without selling a product directly.
With so many products to choose from, consumers increasingly want to feel a sort of attachment or connection to the brands and products they interact with. Web2 laid the foundation for community building through social media marketing and the emergence of the creator economy. More than ever before, consumers were part of a company’s marketing efforts either through interactions on social media or through advertisements created by consumers themselves in influencer marketing campaigns.
To build a successful presence in the early stages of Web3, consider what your brand has to contribute to its digital community. Lead with intention and put education at the forefront of your Web3 brand development process. For consumer goods looking to enter Web3, that might look like branded activations inside a metaverse platform where consumers can contribute content to build a visual space centered around community. Think about digital galleries, or digital products that can be customized by your community to give each user their own platform for creativity.
One thing that sets Web3 apart from Web2 is its decentralized, 3D metaverse. Metaverse activations are unique in that they can fully immerse the user into a digital space that is visually interactive. Looking back at the H&MBeyond metaverse activation, the 3D space created an immersive viewing experience reminiscent of a large public gathering place rather than a chatroom. With so much room for creativity, consider how your brand would expand upon its visual branding to create an entire digital world built for your consumer.
The core of Web3 marketing is in building a community around shared values that your brand or product can integrate with. For fashion retail giants like H&M, the product bridges interests in sustainability and affordable fashion, giving the brand lots of opportunities to create a strong community.
As more companies seek to migrate into Web3, it’s important to think creatively about how you can bring your brand mission to life. On Web2 this looked like taking creative and unconventional approaches to digital marketing, but on Web3 this expands into an opportunity for consumer education that can set your brand ahead once more users are on these platforms.
3D Artwork by Aiste Ambrazeviciute for Karalyte.