In the metaverse and NFT 2.0, marketers should focus on utility and community

As we move into the NFT 2.0 technology space, we see a more innovative and accessible approach to creating a user-centric experience where participants can benefit from the utility. Web3 marketers are also delving into how brands can position themselves to continue generating profit from NFT ventures while adding value to their products. But for NFTs to thrive in the Web3 ecosystem, consumers need storytelling and value proposition, especially in an environment where technology is constantly evolving.

Web3 marketing agencies have carefully implemented brands in the metaverse to build awareness and actual utility for consumers they engage with. But for a brand to stay true to its fan base, its digital assets must include audience and community engagement to create a valuable experience and keep consumers coming back.

The metaverse gives brands a landscape to reinvent themselves. What they deliver in the real world doesn’t have to be exactly what they deliver in the metaverse. That said, brands that have entered the metaverse successfully respect their core business while finding ways to express it a little differently. For example, Under Armour’s Curry brand was able to launch a metaverse campaign with exclusive, digital shoes that went beyond just buying virtual shoes. The digital assets were continuously released during the 2022 NBA Playoffs and dependent on Steph Curry’s performance. It gave fans a new way to engage with every NBA game they watched and allowed Under Armor to reach a new audience while building out its digital footprint in tandem.

Such a campaign is an example of the work that needs to be done behind the scenes by the brand, creative and marketing agencies to develop a meaningful activation. When creating an NFT or metaverse campaign, a brand needs to see past profit and towards the community as the focal point. The metaverse now is in a raw state, but will be shaped in the future by what the brands are doing in this moment. There is no status quo, no norms for consumer expectations, and as more companies offer digital assets that benefit their customers, they will have a much deeper competitive advantage as this new market consolidates.

Building a seamless NFT 2.0 ecosystem with value creation

NFTs have been much discussed in the last year, but NFT 2.0 has the opportunity to create much more potential for a wider audience by building more utility into existing infrastructure. These assets may include digital artwork, in-game items that can be used across different games, music, and other collectibles. On a small scale, an artist can develop a shirt design for a virtual avatar, sell it as an NFT to individual users, and use the blockchain to track the sale. By scaling up this idea, a major brand can move a similar art concept forward with the brand’s logo and track thousands of unique NFT purchases.

When you look at successful NFT/Web3 communities, much of their success comes down to one thing: They empowered their holders/users. Much of this opportunity has been financial gains for users as they profit from market fluctuations, but the successful communities provide for those who also look at the project from a long-term perspective, like buying a digital property in the metaverse. Another example of a long-term opportunity is when community members interact and create content for other members, or even create exclusive channels, like a Discord community, for networking and partnership opportunities.

Brands can’t force people to engage with their digital efforts, but getting a small group of consumers on board, individuals who see the long-term value in a project, creates the potential to build a community that will remain loyal. So when building an NFT community, everyone should ask themselves what opportunities and benefits they can provide holders in addition to a quick financial gain.

The Future of Brand Positioning in the Web3 and the Metaverse

The bear market that NFTs and crypto have been in through 2022 is an obstacle for brands that want to show initiative in this area. On the other hand, there are still many brands launching activations, despite the market cap, which indicates how much potential brands will see when the market picks up. As brands develop their next marketing plans, they should include an NFT or metaverse enablement that creates value and interoperability. Examples could be a cool design that can apply to different games; branded artwork for display across social media platforms; or even inspire little artists or musicians to create something as part of a brand competition for a prize. Generating engagement, promoting interoperability and creating value will be three main components of future brand positioning.

There has also recently been a significant increase in the creation of Mint passes, which benefit holders over a longer period of time. This is probably because people are becoming less interested in profile picture projects that don’t pay off until a later date. This indicates that brands trying to enter the NFT space should be willing to leverage their real-world resources and products to translate them directly to the Web3 community, quickly and fairly.

The potential for brands in the metaverse and NFT activations is limitless, but as this market continues to evolve, their efforts need to be done right, with community building as a key component. It is exciting to see how much growth there has been in the past year, and this is expected to continue in the near future.

Jack Cameron is co-founder and COO of Insomnia Labs.