May 11, 2023

External | what does this mean? This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. 05 May 2023 0 Some of the world's biggest brands are already involved - Nike, Disney, Budweiser, Warner Music and Starbucks. What exactly? Well, as Harvard Business Review put it , the “confusing, contested, exciting, utopian, scam-ridden, disastrous, democratizing, (maybe) decentralized world of Web3.” So, what's the hype all about? The term, first coined by Ethereum co-founder Gavin Wood in 2014 – lightyears ago in the fast-paced world of blockchain technology – has come to be understood as a new iteration of the internet based around the use of distributed ledgers to change the way information is shared, stored and owned. And despite the concept dating back almost a decade, only recently have we started to see it come to life, as traditional marketing models have become outdated and empowered consumers have become wary about sharing their data. In the business world, a core driver behind the steady march towards Web3 has been the adoption of NFTs, which brands have come to recognize as a transformational tool in their marketing kit bag. NFTs are the perfect use case for Web3 – using blockchain technology, they allow you to transparently provide proof of ownership, time stamped on the ledger, for things such as digital art, music, data, in-game assets, personal records and more. This delivers the Web3 vision of a more democratic world wide web that puts people in control of both internet architecture and user data. But despite creating a multi-billion dollar market seemingly overnight, very quickly ‘NFT’ has become a dirty word. For many people, when you say NFTs, they think of animal stickers and a “next big thing” that promised great fortune but, through mis-representation and poor execution, only delivered apathy and in some cases, outright outrage. Aside from the fact the purchasing process is far from user-friendly for the uninitiated, the main problem with NFTs has been that most of them missed the ‘U’ in the secret recipe of a great digital asset – time, originality, authenticity and utility. If created with a clear utility in mind, NFTs in the form of digital collectibles represent a very strong potential for improving brand-customer relationships, and a type of digital asset most likely to successfully bridge the worlds of Web2 and Web3. Fostering a greater feeling of loyalty and community By enriching and deepening the customer relationship, Web3 and digital collectibles offer brands the opportunity to approach their customers on a deeper level, and link the creator to the consumer more directly than ever before. Traditional marketing areas like sampling, packaging, rewards, loyalty, badging, story-telling and authentication can all be delivered beautifully through digital assets – and so whether your company is building a content franchise, a community, a CRM or a software product, it can all be enriched by a utility-driven NFT strategy. The global gaming market – which is expected to reach a value of  $340 billion by 2027  – is an industry that has been quick to realize the benefits of digital collectibles and other types of utility-driven NFTs. Designed to be compelling and encourage ongoing engagement, with exquisite production values and story-telling capabilities, video games are a clear fit for digital collectibles, which can be integrated as a reward mechanism for gamers as part of a play-to-earn model. In the past, gamers typically paid to play and gave away data for free, but in the world of Web3, the gaming industry can grant ownership of digital collectibles to players and reward them for their time and engagement spent in these virtual worlds. This is aligned with the modern brand-customer relationship, in which consumers seek to be compensated for their attention and their loyalty and earn the title of brand ambassador for their favorite brands. Making consumers feel like they are part of a community is a massive driver of word-of-mouth marketing, which in turn builds the community further. Beyond that, inclusion, belonging, visibility and participation are becoming more important for the legions of disaffected, anxious and isolated young people, as many battle the widely reported mental health issues. These trends of sadness, anxiety and depression amongst our young adults pre-date the pandemic, but undoubtedly were exacerbated during that strange time in their young lives. This goes well beyond gaming. Many brands and communities are beginning to explore what role they have in truly “seeing” their customers, reflecting them authentically and offering experiences and programs that celebrate or even just empathize with where they are in this difficult decade. So, this really is just the tip of the iceberg. Digital collectibles open up a new frontier for the creator economy as a whole, driving development of engaging content that can deliver true ownership and, in doing so, enable a brand in almost any industry to catapult its marketing function into the Web3 era – with the benefits and legacy being attributed to the creator, not just the licensee. It empowers everyone in the mix – and that really is the essence of a decentralized system. No longer just the winners and losers of Web2 – now there is a place for everyone to share the benefits. Allowing greater access Of course, driving adoption requires a lowering of the barriers to entry so that it’s not just the most tech savvy consumers that can get in on the game. Using a technology platform that the widest pool of users trusts to access, acquire and protect these new types of assets is crucial – without forgetting the first movers who are probably all-in on Web3 already and won’t want to go back. Ever since cryptocurrencies began to garner mainstream attention, the world of digital assets has always struggled to shake off safety concerns. High volatility, hacks, scams, and lack of regulation can make consumers understandably wary. For brands looking to leverage digital collectibles in their marketing strategies, the number one priority must be to partner with a platform that delivers both the safety and usability to make the experience as simple and secure as possible. It’s vital that the platform have the checks and balances in place to protect users’ assets, and that they offer ample ‘hand-holding’ to those who are perhaps not used to the design and culture of the digital asset space. Not to do so would risk scaring these potential new users away – as crypto culture, like any other emergent cultural force, has more than its fair share of inside jokes and quirks that could alienate the mainstream. The priority for both the brand and their partners must be to bridge Web 2 to Web 3 with the easiest, fastest way to sign up, claim and trade digital assets in a safe and secure manner. CoinZoom, for example, was recently part of the launch of a series of Web3 digital collectibles based on the upcoming Ashfall sci-fi video game. By prioritizing simplicity and user experience, CoinZoom opens the door to anyone interested in owning a unique piece of Ashfall art. The free collectibles are claimable on CoinZoom’s marketplace in a few taps on your phone, using Apple or Google Pay for transaction fees, and taking just seconds or minutes. Web3 is set to transform the internet forever, breaking the monopoly on who controls information, who makes money, and even how networks and corporations work. It also empowers consumers to be more choosy on which brands can benefit from their data and how. To stay on top of their game, marketers and content creators need to be one step ahead of this transformational shift that will give rise to entirely new classes of products and online services – and ultimately define the next era of the internet and the marketing that is successful in that new age. 2999