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A Guide On Web3 Marketing Tactics And Strategies
I’m publishing a post weekly about Social Tokens & Web3 more broadly, exploring the possibilities this new revolution is unlocking. If you find this essay interesting and want to explore more about Social Tokens, subscribe to this newsletter. Enjoy! 🔥
Facebook promised brands a direct connection with their consumers but then took away their access by changing how it worked, switching to a pay-to-advertise model where companies had to spend a ton of money for people to see what they posted. The ads on Facebook just got more and more expensive, to the point where it became a race to the bottom where Facebook was playing with brands' billions of dollars and squeezed them for every penny.
By the time Facebook increased the ads price and changed its algorithm, making it difficult for brands to understand how it works exactly, we saw in 2021 the rise of the Creator Economy, where "influencers" got access to a myriad of new tools to help them monetize their audience better, resulting in these influencers starting declining partnerships with brands.
With Web2 platforms squeezing brands out of their money and creators no more waiting to partner with them, brands are facing an existential crisis where they have little to no solution to advertise their products and reach their audience.
Web3 and Social Tokens seem promising solutions for brands to recreate direct relationships with their customers and build a real community but also feel intimidating.
For a brighter future, we need to show them the path, come up with innovative Web3 marketing models and create new playbooks leveraging Social tokens and crypto mechanisms.
Let's get into it.
1 - Sorry.. You said Social what?
Social tokens are virtual currencies that live on the blockchain.
They are fractionalized shares in the intrinsic value of a community, brand, or person and are earned by accomplishing specific missions (sharing content, signing up for a newsletter, leaving reviews, etc.) These tokens can be redeemed in exchange for other cryptocurrencies or special perks within the community the token is associated with, such as access to token-gated content or access to special merch.
In 2021, the Social Token market grew by over 500% from January to June. The number of addresses holding social tokens grew by ~200%. There were 10 million tokens in circulation with a fully diluted valuation of $330 million.
Social tokens are slowly emerging as the next crypto revolution, and this new technology opens up a whole new world of possibilities for brands, a world where they can remove the gatekeepers and create direct relationships with their consumers through their very own token.
Indeed, social tokens provide a way for consumers to show their loyalty, get rewarded & further commit to their favorite brand, and allow brands to create a direct link with their customers, build a real community, and better capture the value they are creating.
But let's jump into concrete use-cases and see how brands can leverage them to remove intermediaries, increase engagement and increase customer loyalty.
2 - Increasing engagement through Social Tokens
For people to move and take action, you have to make what they'll get very clear.
Clarifying the rewards is essential for any brand wanting to engage its consumers. However, with Web2 solutions and the current tools at their disposal, brands have no easy way to reward consumers at scale and in a secure way.
Think of it for a second. How do brands today are rewarding consumers for subscribing to their newsletter? Maybe they promise them interesting content directly in their content. Sure, but will the content truly be interesting? And what about the dozens of other promotions that come with it?
Maybe they'll offer coupons. Great, but it still requires the consumers to purchase further items before the expiration date, requiring an (engaging) additional step in the rewarding process.
In short, brands today offer no clear and high enough rewards for their consumers to take action.
And that's when social tokens come in. Through social tokens, clear missions, and clear rewards, brands can involve consumers in amplifying a campaign or building awareness around a new product.
Let's see how they can do it.
Web3 Marketing strategy 1:
Problem: Likes and comments on socials are essential for brands, but so far, there weren't any easy solutions to reward consumers for engaging in the comments in a secure and scalable way.
Now the incentives for consumers have changed. For commenting, consumers receive X amount of tokens that they can redeem in exchange for other cryptocurrencies or special perks within the brand's community. That's a clear and high reward.
Mmh interesting… But isn't it too much to pay EVERY consumer for commenting on new posts?
Nope, you got it all wrong. It's actually cheaper, and brands get a much higher ROI than by paying intermediaries such as Facebook to promote their content.
Why so? Because with this new Web3 Marketing method, brands create strong and direct relationships with their consumers (who isn't engaged when they can be paid?), and the message hits different to a new audience when friends share the post.
Ok for the higher ROI, but what about the "it's cheaper" argument?
The short answer: the token doesn't need to have a financial value. And that's where the power of social tokens resides. With an already existing brands and clear values, the social token will be more of a social, collectible value that people are proud to own. Social Tokens create status within a community and allow engage consumers to say "Look, I'm there since the beginning, I've helped this brand succeed."
And trust me, reputation and belonging are much more valuable for humans than money.
The second argument for the "it's cheaper" is that social tokens can have value in the brand's own economy. Similar that anyone need US dollars ($USD) to participate and interact in the US economy, consumers will need some brand tokens ($BRAND) to interact in the brand's economy.
Consumers help the brand succeed, receive tokens, and redeem special perks in the brand's economy (e.g., BTS of a fashion show, exclusive interviews of a sponsored athlete, etc.)
In short, creating a social token is a great way for brands to engage their existing consumers and turn their audience into active members without paying intermediaries.
It can be seen as a great way to "hire" an entire community to promote the brand's content while rewarding engaged consumers easily, securely, and at scale.
Damn.. that's exciting. What else can brands do with tokens?
3 - Customer Loyalty? It's all about aligning incentives
Customer loyalty has always been a central element for brands. How do you retain consumers over the long term when competing with thousands of brands?
In Web2, the answer might have been by giving loyalty points.. But not in Web3.
In Web3, brands share the upsides with consumers. And that's much more powerful to retain them than loyalty points.
Web3 Marketing strategy 2:
Problem: Loyal customers are essential for brands, but they do not have many solutions except "Loyalty programs" to retain them.
Create a brand token in minutes
Create a Liquidity Pool (meaning - give a financial value to the token)
Put the marketing budget into the Liquidity Pool. It will increase the demand and, therefore, the price.
It sends a signal to consumers that the more they engage with the brands, earn tokens and hold them, the more chance they have to get rewarded by the brand over the long term.
Alternative: By allocating the marketing budget to constantly create new experiences for consumers in their own economy, brands will make more people want to join their economy (by buying the token or participating) - resulting in increasing the value of the token and the loyalty of consumers.
By putting back a portion of their benefits or their marketing budget in their tokens, brands will convince consumers to stay, not through points, but with financial incentives (aka real money).
Consumers will stay and keep being loyal because, the more they engage with the brands, earn tokens and hold them, the more chance they have to get rewarded by the brand over the long term.
So brands are basically giving out money to consumers, right..?
Again, you got it all wrong. First, with social tokens, consumers are incentivized to help the brand succeed and be loyal as the value of their tokens — directly correlated to the success and attractiveness of the brand — can gain an almost infinite value.
More than simply being loyal, consumers will do their best work to help the company succeed because the incentives are aligned, and because they are financialy engaged.
Consumers make the overall brand more valuable, resulting in more profits. The brand doesn’t “give out money to consumers” , it simply give back a portion of this additional revenue to the most engaged consumers and creating some future premium experiences. It's a win-win situation, as it's often the case in Web3.
Ok, but what if the brand doesn’t make profit or have no marketing budget to invest upfront?
Then the brand should create NFT memberships. NFT memberships are a great way to build tiers, monetize & offer unique benefits to membership holders.
Marketing strategy 3:
Problem: It can be expensive for brands to try with such innovative technology.
Create a Social Token
Create a Membership NFT with premium (but cheap to make) experiences
Build new experiences with the initial liquidity and increase the attractiveness of the brand
Airdrop tokens to early NFT holders (paying them back for their initial investment)
Social tokens offer more granularity than NFTs to measure participation & reward consumers daily because first, it wouldn't make sense to send an NFT each time a consumer likes a new post, and second, it's hard for brands to retain peoples' attention with NFTs only as consumers are unlikely to be constantly buying and selling their NFTs.
But for social tokens to get a financial value, brands need to put money upfront. And that can be a big blocker.
That's why NFT memberships + Social tokens are a powerful combo. Brands can leverage their top 1% consumers from the beginning by selling them NFTs, then grow their audience thanks to this initial liquidity, and finally, reward the first believers through tokens. Web3 is a positive sum-game where everyone succeeds in helping each other and where incentives are aligned.
NFT Memberships are a great way to raise initial liquidity for brands and a natural way of creating structure and levels within a community. Think of it as providing digital passes unlocking specific access. With these accesses, consumers can then participate in the community.
Brands who'll understand how to combine the power of NFTs with the flexibility of social tokens will be the ones truly succeeding in the Web3 era.
4 - Engage, retain… But what about getting new consumers?
Getting new clients is always challenging for brands. The most complicated part for marketers is putting the brand in front of a qualified audience, a targeted audience that has shown potential interest in the brand's products.
And for that, social tokens and Airdrops' conditions are a new secret weapon to reach a targeted audience.
Web3 marketing strategy 4:
Problem: Brands struggle to attract new members from a targeted audience
Create a brand token in minutes
Find the list of your competitors' social tokens holders and export the list as a .csv
Send them some tokens to create awareness
Alternative: Allow only consumers holding at least two tokens from relevant brands to claim your tokens via a claimable page.
Because everything on the blockchain is freely accessible by anyone, it's easy for a new brand to get access to a list of relevant potential new consumers and send them tokens. I already wrote about How To Make Airdrops That Go Viral, Bring Awareness, And Convert Members Into Active Contributors, where I explain how to do Airdrops the right way.
But brands can go even further and not only do an Airdrop, but also set Airdrop's conditions.
Doing an "Airdrop" means sending tokens to multiple people at once. It is now possible on platforms like Coinvise to set "Airdrop conditions" where only members holding specific Social tokens can claim the Airdrop.
Imagine Reebok wants to Airdrop $REEBOK tokens to raise awareness around their new product but wants to make sure that only engaged and "true" runners get access to it. They could set the condition "Only users holding $NIKE and $ADIDAS tokens can claim our $REEBOK tokens." Because people holding $NIKE and $ADIDAS are the ones who bought the tokens or earned them by accomplishing missions, Reebok is sure they are engaged in the sports niche.
Since social tokens are built over blockchain, it is impossible for fraudulent transactions when it comes to token ownership. This will help brands reach only genuine fans and ensure only the right consumers participate in transactional experiences.
Social tokens create trust at scale and allow brands to reach a targeted audience easily.
Through tokens, brands can more easily foster a sustainable community (less spam), ensures members have skin in the game (not only passive members or commenters), and incentivizes community members to make the overall community desirable to join over the long-term (the more desirable the community, the more valuable the token will be).
It's a new era for brands and marketing where everything needs to be reinvented. Consumers are getting ownership over brands. The communication isn't unidirectional (one to many - brands to consumers) anymore, but multidirectional (many to many - consumers to consumers), and the number of marketing strategies it unlocks is almost unlimited.
Some major brands, such as the Paris Saint Germain already launched their social token, and more are exploring ways to launch one, such as Meta. The firsts joining this revolution will implement mechanisms, get hands-on experience, and will get a competitive advantage for years to come.
Want to learn more about Social Tokens?
Make sure to follow me on Twitter as I continue to explore the limits of Social Tokens and how they will play a major role in our future 🔥