In late September 2022, Crypto Punk #2924 sold for nearly $4.5 million. While inflated sales like this make headlines and focus the conversation on overpriced JPEGs, the big impact of NFTs and Web3 is often overlooked. Web3 is not just a new technology, it is an evolution of how brands and consumers interact.
We get lost in the dollar signs too much, which distract us from what is really going on.
A radical technological shift (the mainstream adoption of blockchain technology) meets a cultural shift (the extremely online nature of everything around us), to create newly empowered consumers — an inflection point that will significantly alter the relationships between people and brands.
This isn’t the first time we’ve seen such a change play out; it’s a cycle as old as the internet itself. The information superhighway gave consumers unprecedented access to information, shifting power away from brands to consumers. No longer did they rely on brand packaging as the only source of information.
Now, they had infinite access to it, and with it their decision-making processes changed, meaning brands had to adapt as a result.
Web2 gave us mobile and social, and consumers gained even more power. They became the media and could tell the world what they thought of your product, enshrining that information in ratings and reviews for others to find. As a result of these tech-fueled changes, brands now focus heavily on digital marketing, social media, and influencer marketing, and see customers as more than just consumers.
Now, Web3 is enabling the next evolution of the empowered consumer, forcing brands to readjust their relationship with them once again. This evolution, and its implications, are highlighted in a new report from Media.Monks and Salesforce that looks at the future of customer engagement.
Here are three important changes they call out. Mathew Sweezey is the co-founder of Web3 Studio at Salesforce, a bestselling author, and a digital marketing expert. Sweezey recaps the key findings of the research on the future of customer engagement and the impact of Web3.
Consumer to co-owner
One of the reasons so many NFT projects are reaching radical valuations is their issuance of IP ownership to holders. When groups collectively own IP, a new type of collective is created.
For example, the Bored Apes each own a unique Ape image. However, as other Apes create content, restaurants, brands, books, and TV shows (yes, all of these are real examples) with their Ape, they bring more visibility to the project, raising the value of all Apes in the process. The brand gave away its IP and allowed its customers to create their own products with it.
Ownership is powerful, and it is a core tenet of NFT projects. It doesn’t matter if it’s a video game or a digital collectible; the customer owns the asset in a way they never have before, and this is opening new doors.
Take gaming as an example. The in-game assets you buy aren’t just usable, they are owned and transferable. Imagine if you buy a game token and no longer want it in the future? In the Web3 world, you simply sell it off to someone else because you own it.
This idea of ownership is a powerful brand lever. I overheard a colleague the other day say, “I don’t imagine playing any video game in the future that I don’t own a part of.” They were referencing the notion that many video games now are NFT-based, and you don’t just buy in-game items or skins, rather you buy into the game.
This digital property can be bought and sold on the open market, and as the game rises in popularity, or as players add value to their property– like upgrading an item — they can turn a profit. This isn’t just true for games, but also for clothing brands like Adidas and Gucci, the latter having raised $1.57 million in total royalties from secondary market sales.
Consumer to collaborator
A fundamental element of Web3 is governance, or the ability to vote. When brands allow their consumers to have a voice and engagement increases, the brand relationship is strengthened. Consumers become a part of the process and gain a new level of loyalty.
Imagine if each purchase you made gave you a vote on where that company spends their philanthropic dollars or gave you a vote on the next year’s colors. When consumers have a say in the process, they have a vested interest in the product.
Past voting, a deeper level of connection is possible as brands open up a new era of gig work. Web3-native brands use bounty boards, where they post jobs for their community members to take on. Workers can find gigs from simple content creation to complex engineering. When the work is done, another gig worker validates the work is correct, and all parties are paid instantly via crypto.
Consumers now don’t just buy their favorite brand; they can literally become a part of it!
Consumer to data center
The last major relationship change is the consumer ownership of data. In a Web3 world, you own your own data and choose who you share it with. It is no longer owned by Facebook or other walled gardens, but rather rented out by the customer in real time. This is the future of how brands will gain data in a post-cookie world.
Again, this change is empowering the customer who might have once felt like a commodity given the rise of privacy concerns. When the customer grants access to their data, they hold the switch. If the individual feels the brand doesn’t need their data anymore, they can simply disconnect. It is on their terms, not the brand’s.
Brands will know how to show instant and continuous value for access to data, and in return, consumers will reward them with more live data. Meaning as customers go through their lives, their data is constantly updated and shared with brands, ensuring it is always accurate and up to date.
Technology is a powerful force, with each new iteration of the internet granting more power to the consumer. As we enter Web3, we are now seeing consumers be elevated to new roles as co-owners, co-creators, and even customer data centers. With each new role, brands will have to learn to play by a new set of rules.
They will be held accountable in real time for the value they create with customer data, and they will learn to give up control so their customers don’t just wear a brand, but become it. Brands racing to create NFTs and move into Web3 must keep in mind that this isn’t simply about digital products. It is a fundamental shift in the relationship between brands and consumers.