Who Are You? The Future of Metaverse Marketing and How NFTs Shape Identity and Belonging
The evolution of NFTs from fun graphics to elite memberships and unique experiences could turn them into assets with real utility—and investment potential.
Updated Mar 18, 2022
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Metaverse
NFTs
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We’re living in the future, kids. Non-fungible tokens—aka NFTs—have become a way for brands to connect with customers in all new ways that feel both epic and homegrown at once.
Human beings have always been social creatures. But now, the dawn of Web 3.0 and the metaverse gives us more chances to engage in peer-to-peer interactions with anyone, anywhere in the world—and to marketing execs, this means dollar signs.
Let's say you could buy Drake’s NFTs before he blew up… [An artist] can create an ecosystem and economy of loyal supporters that are funding the next album.
That fundamentally changes how we as consumers will soon expect to be sold to, with the selling oriented around a new buzzword in the world of crypto, blockchain, and Web 3.0: community. If you haven’t noticed, some of your friends on Twitter have likely changed their profile pictures (PFPs) to NFT cartoons, signaling their status and artistic taste.
This is all part of the community appeal of NFTs. A cartoon PFP signals you’re in a club of some kind. NFTs have become a new signpost of belonging, status, and identity—and these “cool factors” will follow us from our online lives today into the metaverse of the future.
The brand Budweiser, for instance, tapped into humankind’s yearning for nostalgia plus our need for identity markers with the company’s December 2021 Heritage Collection NFT drop. The collection features 1,936 unique digital designs of beer cans, and it sold out in under an hour.
“That's fun if you're a Budweiser drinker and you see an old, cool vintage can that's meaningful to you,” says Alexa Lombardo, a former corporate brand strategist for beauty companies within the Estee Lauder portfolio.
Source: Opensea
Lombardo now runs Atomic No. 8, a Brooklyn-based boutique marketing and go-to-market strategy firm for Web 3.0-first brands. While corporations using NFTs excites her, she argues the real magic will be in how NFTs can mobilize smaller communities throughout Web 3.0 to align around shared values, interests, and of course, consumer habits.
As opposed to traditional marketing, which has told the people what we want since Don Draper’s tenure on Madison Avenue, Lombardo posits that marketing in Web 3.0 will be much more participatory and consumer-led. Web 3.0 marketing will perhaps look like this: online Discord chats, Telegram groups, and even decentralized autonomous organizations (DAOs) oriented around a product, service or industry. An ecosystem, of sorts, so that community members can share their preferences directly with companies and brands. More of a dialogue, less of a sales funnel. At least that’s what some marketing professionals, Lombardo included, hope.
And NFTs may just be the ticket into the club. In the future of marketing, NFT purchases will unlock belonging to a group and, therefore, a sense of having skin in the game.
“There are certain consumers who really care about that and want to feel more involved in the innovation process, like their feedback is being considered,” Lombardo says. “If you're a maker, or if you're a founder, you just want a really authentic community that loves your product, right? That's what I think people are really enjoying about this space—that element of authenticity.”
What's cool about NFTs, she says, is that you can buy certain ones to join different DAOs or online communities. The token, in some cases, could unlock membership to a group, sort of like a subscription to Birchbox or Rent the Runway, except whenever you’re ready to cancel your membership you can sell your NFT to the next person in line. Therefore, your “subscription” NFT actually becomes an asset that grows in value.
This model could also be a game-changer for independent artists, says Nelson Merchan, CEO and co-founder of blockchain public relations firm Light Node Media. “Let's say you could buy Drake’s NFTs before he blew up. You wouldn't just buy his NFTs and hold it. You would be able to do things, have access to concerts or have a discount admission to a concert. [An artist] can create an ecosystem and economy of loyal supporters that are funding the next album.”
And since a person can have more than one crypto wallet, they can also have different collections of NFTs—i.e. markers of identity—in each. One wallet can be for your music tastes, another for your pop culture collectibles (e.g. Budweiser NFTs), and so on.
“You can try on different identities,” Lombardo says. “I think this is a whole other conversation that people are starting to talk about, this idea of sovereign identity and having ultimate control over it, but then ultimately being able to sell your identity one day by passing on your wallet.”
In some ways, this passing of the baton has already been used since the “old days” of country clubs, according to David Litwak, who is currently in the process of launching Maxwell Social, a new, 8,000 square-foot NFT-based gathering spot in New York City’s Tribeca neighborhood.
“Old school country clubs have member bonds,” Litwak says. “I didn't know about this for a long time either, but there are tennis clubs and golf clubs that have member bonds being paid at, say $25,000. And then when your kids go to college and you move to Florida 15 years later, you can get that money. Now, sometimes that's $15,000 because of a contract … but sometimes [the value] is $150,000 because the country club took off and there's a long waiting list or something.”
Appreciation of your NFT asset is more of a perk in this sense, and less of a security—or so most founders argue. This NFT marketing membership model should therefore pass the Howey Test, a sniff test used by the Securities and Exchange Commission (SEC) to determine whether an asset is actually a security. A core component of this test states that there must be a "reasonable expectation of profits" involved in acquiring the asset.
“I don’t know anyone who’s sitting around saying ‘I want to join the country club and buy that bond because I’m really hoping to make a lot of money off this in 15 years,’” Litwak says. “That's almost like a perk. It's a nice upside.”
In theory, NFT memberships and/or DAOs will operate the same way—or so these new founders and brand strategists hope. For now, it seems like they will be OK in the eyes of the SEC, which only seems touchy about club memberships when members actually get to take a cut of the profit. Having a membership asset of some sort—a bond, an NFT—seems to warrant a green light for now, though regulation changes every day in crypto.
And if the NFT approach ever becomes ubiquitous, consumers will get used to scanning QR codes on their phones to access clubs, concerts, and other events compared to the wristbands or inky hand stamps we grew up with.
“Imagine people go to the club,” Merchan says. “They order bottles. The promoters are there … The club is always looking for ways to keep people coming back … to get [customers] excited about the brand, about the experience, about the music, the DJ.”
This is where NFTs will shine, say brand strategists and PR firms walking brazenly towards the Web 3.0 frontier. “Say if you attend the club a few times a month, you're getting a specific amount of NFTs each time you go, and maybe the level of the NFT increases in rarity if you go [more],” Merchan says. “Now these NFTs start to build value and a stronger relationship between the existing infrastructure and the user itself.”