As marketers, we are part of a select group that is constantly staying on top of the latest trends, tactics, and channels. Every time a new channel emerges, marketers are some of the first users to figure out how to leverage the new terrain to grow a business.
The latest? NFTs and the rise of web3.
Marketers are already experimenting with NFTs to accomplish a wide array of goals — from driving brand awareness to increasing customer loyalty and even monetizing their user bases.
Web3 will do today what social media did for brands in the early 2010s.
This shift will mainly be ushered in through immersive, branded, and VR-enabled realities. Just like brick-and-mortar audiences flocked to social media, they’ll follow the same brands into metaverse communities.
In this post, Alanna Gregory walks through…
Alanna Gregory leads global customer engagement and retention at Afterpay, now a part of Block. Previously, Alanna was the head of marketing and digital product at Hairstory, a private-equity backed global haircare brand. She also worked with Flutterwave (YC S16) and founded a YC-backed marketplace company called Vive. She started her career working on Wall Street and received a B.S.E. in Operations Research from Princeton University.
The Evolution of the Web and Marketing, Explained
To understand any trend, it’s important to first examine the path that led to it. So let’s take a look at how we got to web3.
Web1
Web1 was defined by static pages, few content creators, and using frames/tables to align page elements.
The most important marketing tactics that emerged from this era included:
Email marketing
Nascent SEO tactics
Traditional TV, radio, and print advertising reinforced by online messaging
Web2
Web2 is where digital marketing capabilities exploded. The web evolved to be consumer-first, mobile-first, and driven by data.
All of this growth happened on centralized platforms like Facebook or Snapchat, whose power and influence grew alongside the data they amassed.
Key highlights of this web2 era include:
2007: iPhone launches, starting the smartphone boom; Facebook unveils ads
2009: Geo-targeted ads gain popularity
2010: DTC brands like Away and Warby Parker grab market share from traditional retailers
2012: Facebook introduced the exchange to advertisers and acquired Instagram, spurring the explosion of influencer marketing
2013: Tools like Braze and Segment enable sophisticated cross-channel customer communications
2015: Shopify goes public, enabling anyone with Wi-Fi to create a DTC ecommerce platform,
2016: Fueled by the rise of video capabilities, mobile ads evolved
Marketers evolved alongside these channels and technologies as well. Empowered with unprecedented insights into the customer, marketing became extremely performance and analytics-oriented — a big shift from web1.
Marketers materialized concepts like cost of customer acquisition (CAC), customer lifetime value (LTV), cohorts, and more, making the impact of marketing quantifiable across niches and industries.
Web3
While web2 redefined the front end of the internet, web3’s pioneers have focused on advancements on the back end, powered by data transferring ownership from private entities to private citizens.
Practically speaking, in web2 a marketer only needs to acquire, engage with, and retain the customer. But in web3, marketers have many stakeholders to market to, engage with, and retain. This broad group of stakeholders includes users, developers, and their broader communities.
What’s more, web3 leverages the capabilities afforded by decentralization.
In this capacity, decentralization refers to the transfer of control and decision-making from a centralized entity (like Facebook, Instagram, or Google) to a distributed network, where the data is owned by no one.
Centralized companies own our data and can use that data to inform or optimize their platform for engagement. But no entity or person owns the data at decentralized companies.
Decentralized companies achieve this by using smart contracts, or programs stored on a blockchain that run when predetermined conditions are met. These smart contracts are the basic concepts around which web3 mechanics such as NFTs, have emerged.
Where Web3 Marketing is Headed
We’ve already seen the growing importance of communities in web2, especially with DTC brands. However, web3 is likely ushering in the next evolution in community marketing. Especially as the number of stakeholders significantly expands.
In web2, stakeholders were merely customers or users. Web3’s broader universe of stakeholders includes developers, partners, and investors.
Web3 isn’t one big community; there are many different niches, and many communities co-exist together.
For example, Upstream is a community-focused company building an easy-to-use web experience to launch, scale, and manage a DAO. (DAO stands for decentralized autonomous organization and can be defined simply as “an internet community with a shared bank account” on the blockchain.)
Upstream’s co-founder of Alex Taub explains the transition of communities from web1, to web2 and web3:
“In 1.0, your community is IRL and based on things like where you were born, where you went to school, what sports team you supported, etc.
In 2.0, your community was a URL, where you joined interest-based online groups across Facebook, Reddit, Discord, etc.
In 3.0, the community is all about ownership. Being part of a community means you’re providing funding to run the community and gaining transparency and voting power.”
That said, marketing in web3 isn’t an entirely new concept. As Alex says, “marketing doesn’t change, what people care about does” — and there’s some truth to that.
Marketing in web3 leverages a variety of well-understood components such as:
Consumer marketing, where we generate awareness of a project to consumers, educate those consumers and bring them into a community. This includes a number of tactics, including content marketing, product marketing, and SEO.
Developer marketing, where developers are the end-users. Concentrated outreach and developer relations, such as documentation, events, and education, are a central theme of this tactic.
Community marketing, where a broad mix of stakeholders are targeted in a way that is universally rooted in a purpose or mission.
Across all three components, the channels and tactics can change to encompass some of the fields of marketing we are already familiar with.
Channels like content marketing, SEO, and more won’t just go away, but instead, can be used alongside new web3 and NFT mechanics.
That said, the importance of each area of marketing may shift with web3.
For example, if community building is central to the success of a web3 project, skills such as social media marketing, influencer marketing, and content marketing, might become more important. And therefore, claim a bigger share of marketing teams or budgets in web3.
What Web3 Layers on to Marketing
Before we begin, it’s important to note that the marketing frameworks in web3 need to be contextualized based on the type of web3 company.
Specifically, is the company:
Centralized, or Decentralized? Centralized examples include OpenSea or Coinbase, both of which operate by allowing users to buy and sell digital assets such as NFTs or tokens. The key difference, however, is that these companies make use of traditional corporate governance structures (e.g. corporations) and own the data generated by their platform. Decentralized examples include Solana or Ethereum, which are member-owned communities where activity isn’t controlled by a single individual or board.
Tokenized, or Not Tokenized? You must also consider if the company is tokenized (community-owned) or not. In a tokenized scenario, a project is influenced by the success of the community and vice versa. An approach like this embeds long-term success into the model and across stakeholders. Some centralized companies such as Coinbase and OpenSea do not have tokens, but other centralized companies such as Binance do. Decentralized companies such as Ethereum and Solana are tokenized, where tokens have network effects and help to solve the “cold start” problem of launching a new network.
Whether or not a company is tokenized or centralized impacts the marketing approach. Although there’s still a fair amount of web2 marketing mechanics that can be blended with new web3 marketing elements.
With that context, let’s unpack why web3 might matter for your marketing efforts.
NFTs: The Bridge from Web2 to Web3
As a refresher, NFTs are a piece of IP that live on the blockchain, which has facilitated the concept of digital scarcity. Traditional web2 brands are capitalizing on NFTs as a way to re-write the brand-building playbook and serve a variety of marketing objectives.
Here are some of the ways brands are already using NFTs:
Driving brand awareness and extending reach
Luxury brands such as Burberry have used NFTs to extend the reach of their brand and sell more accessible items.
Burberry partnered with Mythical Games, an NFT-based video game startup, to offer players the ability to purchase Burberry digital accessories in the gaming environment and to transform those accessories into NFTs. Unlike traditional in-game items, players actually own what they are purchasing and can trade it with other players for real money.
Boohoo, an online women’s fashion brand also has launched several NFT projects to generate brand awareness.
Joe Smith, a web3 marketing consultant and the former director at social media agency Social Chain, shares more on Boohoo’s most recent NFT launch to celebrate women’s history month:
“The NFT space is very male-dominated and Boohoo wanted to use their brand to involve female artists. We partnered with female-led projects and leveraged Boohoo’s Instagram account to drive awareness of the project. In return, artists promoted the project and helped build the brand’s Twitter following.”
Creating a novel experience and exclusive access
Dolce & Gabbana created a limited edition collection of NFTs. In addition to owning the purchased NFT, the owner would also get a physical suit tailored to their specifications.
Similarly, the NFL, in collaboration with Ticketmaster, gave out virtual NFT tickets that could be traded or sold. In each of these examples, the brands offered a limited access experience to their fans through an NFT.
Driving loyalty and promoting charitable causes
Taco Bell and Coca-Cola each used NFTs to drive loyalty and awareness of their giving initiatives, with all proceeds going towards specific causes. Gucci also donated proceeds of its NFT sale to UNICEF.
Similar to other channels, brands that are early adopters are often rewarded. However, that doesn’t guarantee that there won’t be failures within the NFTs or web3 space.
In each of these successful examples, incentives were aligned between the brand and customer, turning customers directly into brand evangelists.
But what causes customers to jump in?
Community, Identity, & Status: Much like the world of traditional branding, people buy NFTs to communicate something about themselves, such as a community they’re a part of, a social group they belong to, or an interest they’re passionate about.
Utility: NFT collections keep their audience engaged by offering tangible uses for holders, such as exclusive merch drops, whitelists to other NFTs, or tickets to events.
The Lottery Ticket: Audiences can now participate in the financial upside of the brands they support. This means even a small investment could be turned into a life-changing amount of money.
Boohoo’s Joe Smith believes that brands commonly see NFTs as a marketing tool that they can use to “growth hack” community building.
“While a Facebook community rewards you with likes and comments; an NFT incentivizes you to evangelize a project because you have financial upside, and benefit from helping grow that community; there’s a direct incentive to you as a community member.
Furthermore, once you have a community of NFT holders, you are able to provide them with continuous additional value — 'holder only benefits,' where holders of your NFT are rewarded for being a part of your community. This can be via access to certain brand events, access to private discord/telegram channels, or even in the form of 'airdrops', where a second NFT can be gifted to all holders of the initial NFT. Again, providing value for your community then increases their involvement with your brand, their evangelism, etc.
Naturally, brands will always have varying objectives - perhaps they're building a community to populate a 'metaverse' they're building. Perhaps they'll release merch. Maybe they're building a community to nurture around a specific niche/event.”
If you’re planning on developing an NFT strategy for your brand, it’s helpful to frame your strategy in this context:
What is the goal/objective of your NFT launch?
What value does the NFT serve your customer?
How do you measure the impact?
At Afterpay, a buy-now-pay-later company, we used NFTs for a brand activation at New York Fashion Week (NYFW) this year. While Afterpay is a payment method, it’s also a marketplace of tens of thousands of merchants, as well as a place for consumers to discover and shop for products.
Our marketing team’s goal in sponsoring NYFW was to make fashion more accessible, just like Afterpay makes it more accessible for consumers to be in control of their finances, make the most of their money, and manage their spending responsibly.
Afterpay’s NFT, in partnership with JD Sports, quickly became a valuable new marketing channel to drive awareness of both NYFW and Afterpay.
Mike Earl, director of brand marketing at Afterpay, who managed the activation, shared:
“Our NFT strategy was influenced by our partnership with JD Sports and our mutual goal of powering access to NFT art for consumers. The activation drove earned media and social buzz against both brand and NYFW campaign goals”
Looking Ahead: How to Unlock Mass Web3 Adoption
NFTs are a useful branding opportunity right now, even if their novelty wears off over time. The main challenge is that only 25% of U.S. adults are familiar with NFTs, while only 7% are active users.
OpenSea, the leading peer-to-peer marketplace for NFTs, has about 300,000 monthly active traders. Compare that to eBay, which has close to 200 million monthly active users.
To achieve mass adoption of web3 marketing, the technology will need to hit a few key milestones — which could take 5 or more years to come to fruition.
First, there will need to be an enablement layer. In this context, an enablement layer would need to be a mainstream platform(s) for non-crypto users to buy and sell NFTs without a crypto wallet.
On the other side of the equation, there will need to be an easy way for creators to mint NFTs and build storefronts to sell those NFTs, potentially with their own branding. Shopify did this in web2 by making it easy for anyone to open their own branded online store and sell products, without writing any code.
Some early entrants into this web3 space, including Novel, Dime, and Rarify, share a common goal of creating an experience that feels like online shopping.
Maria Constantine, Head of Marketing at Dime.io, discussed some of the hurdles currently present in participating in web3:
“First off, you need to be familiar with the language: NFTs, DAOs, decentralized, etc; it can get confusing very fast if you don’t understand these terms. We see users spend several weeks or even months researching to learn about NFTs; the average consumer won’t do this to buy your average product. There are too many barriers for the average creator or buyer to get into the space.
Dime makes it super simple for anyone to create an NFT from any digital file—with the ability to even mint verified content pulled directly from your TikTok or Instagram– and list your NFT in USD (versus ETH) so it’s not as confusing for someone new to the space.
With Dime, creators with existing audiences on other platforms can engage with NFTs, versus building new communities from scratch. It also makes it super easy for any buyer to engage with web3 assets. The existing platforms have failed because they are too complex, not just for the creator, but for the buyer and audience.”
Existing solutions in the market, such as OpenSea, serve as a marketplace rather than an enablement platform — at least to date. It’s also worth noting that Shopify recently opened its platform up to crypto payments. This new feature might help companies bridge the gap between web2 and web3. It will be exciting to see how this evolves.
DAOs, a web3 feature mentioned earlier, also benefit from an enablement layer. That’s why Upstream created Upstream Collectives: an easy, no-code tool to create, manage, and scale a DAO all in one place.
DAOs were initially introduced as investment clubs or groups of people who want to pool money together to buy digital assets. Recent examples of this type of DAO include:
ConstitutionDAO, where people pooled together to purchase a copy of the US Constitution
KrauseHouse, where people pooled together to buy an NBA team
Another common use case for DAOs is creating gated digital communities, such as:
LinksDAO, a membership-based, virtual country club for golf enthusiasts
Similar to NFTs, creating and scaling a DAO requires significant technical knowledge, such as interacting and deploying a smart contract. Most people don’t have this experience, yet. Although a solution like Upstream Collectives likely solves this issue.
Until that happens at scale, NFTs will likely remain a niche interest, and be used primarily for novelty and/or brand relevance.
The Marketers’ Web3 Toolkit
What does all of this mean for marketers? Well, there are a few tactics, strategies, and more that you should have in your web3 toolkit.
Marketing Tool 1: Community
First and foremost, community is a big piece of web3. In web3, a community is often established before a product, and products often come out of the community.
To start building this community creators often share a roadmap, which is a promise of what the community can expect. Leading up to a launch, those creators can then engage with their community to influence what the project ultimately creates. For example, community members can vote on a series of potential projects and the creators will commit to building the winning project.
How would a community manager start building a community? Boohoo’s Joe Smith shares:
“A community manager should be the person who gets people hyped. This can mean creating gamified experiences like digital treasure hunts, asking people to solve puzzles or quizzes, responding to a certain hashtag, and driving Twitter growth and sign-ups for pre-sale slots. Another way might be to build a community on Discord. This might mean setting up a Discord channel, understanding the universe of Discord bots available and how to use them to engage the community.”
Another way to build community involves creating content and launching events. Upstream’s Alex Taub says:
“We used IRL and URL events that were useful, educational, and informative. Great content in web3 is very impactful. For example, I had someone come up to me and share that he bought his first NFT after a video he saw from us where we explained web3 and NFTs in an easy-to-understand and educational way.
What’s more, messaging matters. We understood that DAOs are an acronym that not everyone understands; we want to make the concept accessible. That’s why we call them “Collectives”; it’s not an acronym and most people understand the concept. Dapper Labs did the same thing, they call their NFTs “collectibles. We’re planning to double down on content and events because the impact is so great here.”
Airdrops are a fantastic way to engage with your community as well. Creators can use Airdrops to send free tokens (e.g., NFTs or cryptocurrency tokens) en masse to multiple wallet addresses.
Airdrops are a promotional strategy that’s often used to build hype around the launch of a new project, gain followers, build momentum, and boost community engagement ahead of a launch.
Marketing Tool 2: Memes
The web3 community loves creating, sharing, and communicating with memes. Simply put, memes are:
a universal language on the internet
approachable
have a more human feel
elicit emotions
Alex from Upstream believes speaking in memes is key to making projects relatable and growing a community. He also mentioned that they are looking for a “meme king or queen” to help grow their follower base.
Airdrops, the aforementioned way to send free tokens en masse to your community, are another tactic for driving engagement and adoption that’s specific to web3. They serve as an effective way to generate excitement and get people talking about your product.
Dime’s Maria Constantine shared a recent approach an artist on their platform took while launching an NFT project. Ahead of the launch, the artist minted 100 teaser pieces that talked about the process of creating, the inspiration, and the story behind each NFT. When the launch did happen, the project already had 100 people who were incentivized and excited to share more about the main NFT project.
Marketing Tool 3: Web3 KPIs
Succeeding as a marketer in web3 means rethinking launch and growth frameworks. Commonly, the important goals, metrics, and KPIs are not the same as they were in web2.
There are a number of ways KPIs for web3 could take shape including:
The size of your community across channels, such as Twitter or Discord.
Activity and engagement, where the metrics might include the percent of people voting or logging in.
For NFTs, it might specifically be sell-out time or “floor price,” the minimum price of any NFT collection. If the floor price remains steady or rises consistently, it’s a sign that there’s strong demand, people believe in the NFT project, and that the project is delivering on its roadmap.
Some of this is a reflection of how nascent the web3 market is compared to the highly optimized web2. For now, web3 marketers could gravitate towards product engagement or community metrics while selecting KPIs. Eventually, as the market matures, CAC will likely permeate into conversations.
For now, marketers should start with a clear purpose, grow a community around that purpose, and match their growth strategies to this.
What Will Web3 Marketing Become?
The question of what marketing will evolve to in this era remains unanswered.
The most sought-after marketers in the web2 era were the ones who could use data and insights to drive performance. So is the community marketer the next “in demand” professional? Someone who can build a community, engage that community, and connect with existing communities, thought leaders, and influencers? Only time will tell.
While savvy marketers will always evolve, a new breed of marketers may emerge — and those will be in high demand for decades to come.
