Loyalty Series Part 2: Personalized Web3 Experiences

Speaker 1: 0:06

Welcome back everyone to Marketing Meets Web 3. This is the second conversation in a four-part series about Web 3 and loyalty marketing. In the first conversation, we introduced the series by covering some foundational Web 3 concepts and discussed the opportunities for Web 3 to enhance loyalty marketing. Alberto give us a preview of the conversation ahead.

Speaker 2: 0:27

Right? Yes, in this episode we focus on customer insights from Drew Bitzler, from Holder, where they are rethinking CRMs with Web 3-enabled insights. During this conversation, we delve into how Web 3 impacts the results of a company's marketing efforts and offers a new path to customer data insights. We'll talk about privacy-focused data analysis, transparent analytics and the impact on more personalized marketing strategies. So that's how we do it. Drew Bitzler, nick Casares welcome both of you to Marketing Meets Web 3 podcast. Thanks.

Speaker 1: 1:03

Alberto Glad to be here.

Speaker 3: 1:04

So glad to be here, excited for this.

Speaker 2: 1:07

The audience has had a chance to hear who Nick Casares is, but they may want to hear from you, Drew, who you are and what your work has been, so if you want to give a quick intro, that would be awesome.

Speaker 3: 1:18

Yeah, happy to Hello everybody. My name is Drew Bitzler. I am the CEO and co-founder at Holder. We are a CRM and customer engagement platform for Web 3 brands and creators. I've spent a decade or so in marketing. I'm a marketer by trade digital marketing. I started my career at Exact Target in Salesforce and then spent the last seven or so years building and running marketing teams at startups as part of a venture studio called High Alpha, so took the plunge a little over a year ago. So a little over a year old stone startup mode and super excited to be here and be talking about all things Web 3 marketing and kind of loyalty.

Speaker 2: 2:03

Thank you. That's the reason why we had you here, and it would be awesome to start this conversation about Web 3 loyalty for companies and brands, maybe going for the advantages, so what, in your opinion, drew, the advantages that Web 3 offers for businesses in terms of resaping their membership models?

Speaker 3: 2:26

Yeah, I think every time I think around Web 3 in general, I think I go back to like first principles almost around this is built on a blockchain and kind of what are like the valuable different traders around a blockchain, because really a blockchain is just a database and so what's more valuable for your customer data to live on the Ethereum blockchain versus on an internal database?

Speaker 3: 2:53

And so I go back to kind of the core tenants around blockchains which are around kind of ownership, trust, transparency, kind of immutability this idea of like the public immutable ledger and I think kind of when you take all of those core tenants and you apply them then to marketing and kind of membership and loyalty, that's what kind of I think is kind of the core advantages and kind of differentiators that Web 3 offers that may not be either as easily applied in kind of the traditional Web 2 world or may not even be kind of applicable at all in the Web 2 world. And so that's what I think around businesses and they think around how do we make, how do you focus on ownership with our customers, how do we focus on this kind of idea around transparency and kind of? You know, I think data privacy is kind of a big buzzword right now with consumers and kind of more and more consumers I don't have the stat off the top of my head, but like it's something like 75% of consumers desire more kind of privacy in their data, more control kind of over their data and some of these kind of aspects. Where Web 3 makes a lot of that especially, it can make it kind of under the hood just part of the program, you know, and it's kind of just kind of part of the experience. And so I think because of that, it provides, you know, 10x better potential for some 10x better kind of consumer experiences that are really really novel and unique and focused around ownership and transparency.

Speaker 3: 4:22

And so that's what I think around kind of the advantages. And I think a lot of times you have to think about like how is this better than the old kind of way? And I kind of I always start a lot with why is this database we're building on, you know, maybe a blockchain? What makes it different or unique? And in some ways, you know, better, in some ways kind of more challenging than traditional databases, and so that's where kind of I go back to a lot of this like kind of it's focused on ownership. It's focused on transparency, the mutability kind of the trust, the trustless nature of this system that it's built on.

Speaker 2: 4:57

We are going to drill in some of these aspects, I guess as the conversation goes, but before we get deeper into it, I would like maybe, nick, for you to give an intro introduction of a term that I think comes or is used a lot in Web3 and in blockchain, which is tokenization. I think it's going to help to explain what this term means, because I think we're going to use it a lot, and how this tokenization could also help businesses that may be looking into enhancing their marketing or business models.

Speaker 1: 5:32

Yeah, absolutely so. Tokenization it's one of those buzzwords that gets thrown around in the industry and I think it's slightly technical. I think it's also been sort of financialized by the crypto side of this industry, and so people kind of they conflate that with what the core of this word actually means. And so when we talk about tokenization, we're talking about taking any kind of asset, be it financial, be it a digital asset, a physical asset and turning that into something that can be recognized and authenticated on a blockchain. And so, from that perspective, tokenization is similar to when we got into desktop publishing years and years and years ago.

Speaker 1: 6:13

When people started creating digital publishing, there was this idea of digitization. So you would take an analog, something like a photo or a piece of paper, and you would put that into a scanner, and now you turn that into a digital file that can now be manipulated. It can be used in Photoshop, it can be added to an email, it can be sent across the internet. We're talking about the same type of concept with tokenization. So tokenization is taking any asset, turning it into something that can be recognized, traded and valued on a public blockchain.

Speaker 2: 6:44

How do you think, maybe, maybe, through? How do you think this tokenization, what it implies? How can it help companies or businesses with their marketing and business models?

Speaker 3: 6:58

Yeah, I think, nick, you kind of nailed it.

Speaker 3: 7:00

I think a lot of the value or the interesting thing is around this like it's not just kind of a digital good, because when we did kind of shift to digitization, the ability then to also, like you, start to get into kind of right click save meme territory here but the ability to copy and paste a file and kind of the provenance of that file and the kind of direct ownership of that file could not be kind of traced and essentially had the rise of everything from Napster to the Pirate Bay and things like that, where kind of giving the digitization of all these files and kind of music and artwork and media in particular it was so easy to access through some of these platforms. I think the unique thing around tokenization is it's all digitally verifiable ownership of that good. It is on this again back to first principles. It's on this immutable public ledger on the blockchain that shows who owns this asset and when did they own it and when did they purchase it, for there's the timestamp and the token and the transaction hash and everything. So I think that's where, back to this idea of you, have true ownership of digital goods where in the past you were always relying on, even the ownership of any digital good was still governed by some other body. Even when I think of my bank account, I have digital goods in my Chase bank account, meaning the balance of my bank account and, honestly, chase is the governing body saying what is displaying on the back end and their digital record of how much money is in my account, and instead we're moving just to a world where that's completely open and transparent and verifiable, that this asset we don't need a governing body, but it's just actually the blockchain itself.

Speaker 3: 9:05

Back to what does this mean for brands? And I think that's kind of maybe, like it's hopefully it's interesting to kind of started a lot of these, like maybe a little more kind of technical or kind of base level of like why is this interesting? But I think to kind of bring it back to like why is this interesting for brands? I think the idea around our customers can now own, like verifiable, you know, digital goods, our customers can engage with us in a way that is, you know, has true kind of ownership and transparency at the forefront, and I think that's where kind of it starts to create a lot of these really unique models and campaigns and programs.

Speaker 3: 9:46

And I think our minds you know it's always tough with a new technology stack and kind of innovation to kind of not just take you know what we saw in the previous generation to kind of apply it into this kind of new technology.

Speaker 3: 9:58

So I think where I might send a go, a lot is around you know membership models and loyalty points and you know businesses that are already selling digital goods like a magazine or a subscription or things like that, and so I think kind of our minds go a lot to there's lots of you know or tickets is a great example as well there's lots of kind of easy parallels of you know there's a physical item you know of a ticket that I purchased and that has kind of provenance, that has a unique you know barcode or ID on it.

Speaker 3: 10:31

It is owned by you know my account, and how do you kind of apply that on in a Web3 way? There's lots of kind of parallels there and that's where kind of mine goes to is like how can these brands use this technology to kind of build more of a ownership first model around kind of the assets that they're launching? And so those are some of kind of I think, the early, you know campaigns and kind of things that'll drive much more kind of mass, I think, adoption around consumers and kind of brands leveraging into their existing seeing kind of databases or existing user bases.

Speaker 1: 11:05

And can I chip in on one aspect of that that I think you really tapped into, drew, which is this idea that we're giving customers the ability to own things, and I think, as marketers, we should be thinking beyond goods right, this is beyond digital goods, this is beyond physical goods.

Speaker 1: 11:22

Our customers, interaction with us, with our business, is actually something that can be owned now. So when we talk about membership and loyalty programs and we talk about letting people take their loyalty points outside of our ecosystem, or we talk about letting them flex their status as a silver member in a way that can be recognized on a blockchain, that's actually allowing the customer to take something that they own Really. It's their interaction and their customer history with us that is part of our relationship with them, but it's also a way for them to prove that they are a quote unquote good customer, right, or that they have been a customer for a particular brand, which may be an interesting way for another marketer to have a conversation with that customer, offer them something more interesting, more compelling you know position of product differently. So, I think, going beyond just items and thinking about what is the interaction history of the customer and how that can now be owned on. The blockchain is really going to open some doors and some new potential for creating really compelling and deeper customer relationships.

Speaker 2: 12:21

We've talked about this ownership of assets by the user and, of course, the value that this brings to the user. The user angle is going to be covered in the next episode of this series, but, of course, the fact that the user owns this creates a piece of data, creates information and, as you have explained, this can come in the form or thanks to the tokenization of these pieces of information. So how can these data help companies? How does this help with the data insights that companies gather? Of course, to offer better services to their users.

Speaker 3: 13:05

Yeah, I'm happy to kind of jump in and then, nick, feel free to take it from here, but the or my mind goes, this is kind of what brought me into Web 3 a lot from the beginning is my background in digital marketing. I grew up as Google Analytics was taking off, the idea of kind of digital analytics, performance marketing, digital advertising and all of this. That was kind of where I cut my teeth in a lot of my early kind of marketing career and just kind of watching this explosion and kind of getting to the end of the 20 teens and just kind of starting to feel personally like we were kind of in an inevitable race to the bottom as marketers and digital marketers for, like, how do I optimize my Facebook ad campaign? And so I was kind of feeling this just a little lack of innovation around kind of marketing technology for quite some time. And then when I saw kind of Web 3 and NFTs start to explode, it really captivated me, particularly around kind of the data side of things.

Speaker 3: 14:06

So for decades, you know since the Madmen era, we've been looking at how do I produce a marketing campaign or an advertising campaign based on a lot of these kind of broad demographic, you know guesses around. You know I am a white male in my 30s that lives in the Midwest, and so here's kind of the profiles of things I might like to buy. And even then, in kind of the digital age, we had kind of the advent of cookies and tracking me all over the internet and so now knowing like I might have some of those demographic pieces of data through a handful of different data providers and things like that. But also I know that I've been on these handful of pages, you know I mean, and I've been searching for these things on Google or I've clicked this link and still kind of trying to guess at purchase behavior and kind of intent based on kind of what the activities I've been kind of taking with my digital profile. And over the last you know five years or so, since the advent especially of GDPR, we've seen kind of really the death of the cookie from GDPR, ccpa, kind of Apple privacy, kind of ask app not to track kind of stuff. This is kind of just completely shifted, I think, kind of the marketers world around data and kind of customer data.

Speaker 3: 15:22

And so looking at kind of Web 3, it's really interesting where now the end consumer really kind of owns more of the keys and kind of ownership around the data on that wallet and so kind of your wallet lives on a blockchain, this blockchain. Today, as of today, until kind of zero knowledge proofs kind of become more prevalent. This is all kind of public. So you can look at drewbeachlereath and you can see every transaction I've had with that wallet address, all of the NFTs that I own, all of the Ethereum that I own in that wallet, and it's like an incredible look at someone's actual purchase behavior and intent and kind of transaction history.

Speaker 3: 15:58

And so I think, from a marketer and from a brand perspective, there's so much more value in that and that person may be completely anonymous, you know even but there's so much more value in that ability to see like, well, what are they actually interested in, were they purchasing?

Speaker 3: 16:12

Where do their kind of interests lie, rather than kind of relying, I think, on kind of the previous model for a marketing kind of customer data, an analytics perspective of just like what pages are someone visiting and you know kind of broad kind of demographic profiles.

Speaker 3: 16:26

And so when I think of kind of customer data insights, when I think of kind of Web3 analytics around a wallet address, I think there's so much opportunity for brands to use that to craft an even more compelling and personalized customers experience with their customers and I think we'll get into this a little bit later that obviously this brings up a few more kind of privacy implications, at least related to all of this, and I think kind of there's some interesting things there to also talk about, which we will. But in kind of a nutshell, that's where I think kind of there's a lot of value, and I think of analytics and this opportunity with the death of the cookie and kind of the rise of, you know, really it's first party but even kind of zero party data around the actual customer themselves and when they're connecting their wallet to your site, you know you're starting to kind of get a glimpse into their digital identity, really in a way that we've never been able to see before.

Speaker 1: 17:31

I completely agree with your perspective, drew.

Speaker 1: 17:33

I think you know.

Speaker 1: 17:34

If I could add anything, it would be that we are very early as an industry and I think that the technology and the usage of the technology is going to mature significantly, exponentially, in the coming years, and I really do see a future where we can get rid of some of the complexity and things. Concepts like wallets will kind of fade into the background. But what won't fade into the background is the idea that people will be collecting their activity history across everything that they do, whether it's browsing the Internet or purchasing things, and they'll be able to selectively share that with marketers. And so I might have five different profiles or 50 different profiles as a person that represent all aspects of my life. One could be financial, one could be my hobbies and interests, one could be for kids in school, you know, and everything that I do then is connected to a profile which I can connect to marketers, businesses that are willing to provide value in exchange for that data. Again, drew, to your point, to really start backwards from the intent instead of trying to guess our way there.

Speaker 2: 18:35

I love the death of the cookies sentence. Nothing against cookies, but yeah, it was a good sentence, I think. When we go over some examples later, I think it's going to be clear how the death of this way of doing marketing and the potential of this new way of doing marketing Brings to them to the forefront. Before we get there, I wanted to cover a couple more aspects. One of them was already pointed out by Drew, but the privacy one. But one more aspect that I think also drew hinted at was the trust between customers and businesses and what happens, or how can Web3 help improve this trust about how this information gathered from the customer is used then by the business.

Speaker 3: 19:25

Yeah, and I think a good comparison is back to kind of Web2 cookies as well. So I think of you know, when I go to you know, acmeanvilcom maybe I got there from an Instagram ad or some other kind of ad that I clicked on you know I'm buying something from their e-commerce store. I really have no idea. You know, and I don't know you might be able to you can look into your kind of cache and things like that but I really have no idea like what all data is included on that cookie. You know that followed me to that website. I have no idea you know how I'm being kind of followed across the internet and kind of what data when I am, you know, putting in my email address and purchasing something, is actually being tied back to that kind of user.

Speaker 3: 20:12

And I think the biggest thing with Web3 that I think is really interesting and powerful and Nick, you touched on this is that there's still a lot of data that I'm sharing with a brand when I buy their NFT or, you know, connect my wallet to their website like probably even maybe even more so than like a cookie, because it's actual.

Speaker 3: 20:35

You know, it's like my entire credit card history report, essentially that I'm giving to this brand when I connect to wallet, but it is fully transparent and the kind of trust that exists there is at a wholly different level, because it's not this kind of black box of like I have no idea kind of what data you have on me, but it's very clear.

Speaker 3: 20:55

I'm connecting, you know wallet A and I know everything that's in this wallet and you're going to get kind of my entire transaction history on that wallet and I know what's not tied to it.

Speaker 3: 21:05

And so if I don't want you know that wallet tied to your brand, I might have another you know personality or kind of profile, essentially with a different wallet that I might connect to your brand instead and kind of this idea of like I have almost different profiles of myself that I connect to brands and it's kind of I have this like transparent nature in terms of I know what I'm sharing and kind of giving up and like this is the view or the lens that I want you know Nike or Adidas or you know brand X, y or Z to have into me as their customer and consumer. That is just kind of at a level of control that we haven't quite had in kind of the web to internet era, and so that's when I think kind of that at least builds a little more trust and specifically around kind of how this data is being used, what data I'm sharing. I think that kind of overall kind of builds for a really unique kind of place in the future around kind of data privacy and kind of customer data control.

Speaker 2: 22:10

Do you have anything to add in there, Nick?

Speaker 1: 22:14

I agree. You know we're entering an era where customers are going to have more control over their data set. They're going to have more choice as to which data sets they connect for which benefit. And I think, as marketers, you know the challenge is going to be how do we embrace that instead of run away from it.

Speaker 1: 22:29

But if you think back to the early days of social media, there was a lot of hesitation within businesses to be active on social media, because you know, what if our customers talk badly about us, what if information leaks out to the internet and we don't want that out there? And there was this real resistance to want to put anything out there that couldn't be controlled by the company. And I think we have to go through that same learning curve with on chain data and really embrace that. This is an opportunity. This is not. It's not a risk. It's an opportunity for us. And you know, of course, there are privacy issues that we need to solve for, and you know the experience has to get better. But I think playing the long game here and really thinking strategically and thoughtfully about how we approach this from a data perspective is going to play to marketers favor.

Speaker 2: 23:16

Can you, drew, maybe share a comment about these privacy implications for the marketer, Because, as you hinted at, nick, just now, I think this could be a different situation for them and I wondered about these privacy implications, or what do they imply?

Speaker 3: 23:35

Yeah, and I think we're living in a world, you know, recording this in August of 2023. And I think we're living in a world where there's still not they're still not a lot of clarity. And that's been challenging, especially for a lot of brands that are probably very interested in this space and want to kind of launch campaigns and programs and kind of their standing on the sidelines kind of looking at like, well, our legal and compliance team is not really sure is a wallet address PII information or not? And how do we, you know, store and secure and what's the governance around that, to kind of be GDPR compliant? And so I think there's a lot of challenges still there and I think we will see that over the coming, you know, months and years become more clear. But the stance, at least, that I and our team, at least at Holder, kind of taking is treating a lot of wallet data, especially if it's tied to any kind of PII, just like any other kind of GDPR and CCPA related data and so and so how you get consent for that data, how you collect consent and store consent, and now you know, with with things like XMTP and others, like we can actually send messages directly to wallets as well, so treating that like consent to message a wallet, very similar to how you do with consent to email someone. And so I think kind of we're just trying to take the approach that you know we've seen email grow up, we've seen text messaging grow up from like a messaging and communication perspective and data and kind of trying to apply a lot of the lessons that were probably learned from you know can spam and everything like that, trying to take those and kind of apply them at the forefront and kind of almost self regulating kind of treat that in a very similar way. And so from a from a privacy related perspective, you know, obviously I'm not a legal expert and there's lots of you know, giant teams of lawyers at some of these big Fortune 500s that are doing running programs and kind of Web 3 that are trying to kind of tackle all of this as well.

Speaker 3: 25:37

But I would just say that there there definitely are, I think, and it all kind of depends on your risk profile, like any lawyer would say. But the approach that we try to take and I would kind of just advise brands at least is find tools that think this way. You know, I mean that have kind of that that lens and understanding of how web to data privacy kind of in user control and consent kind of grew up and how to apply that and kind of a web three way and and that's where kind of I think if you're you're taking that approach and always kind of thinking in it from the consumers point of view and how they want to engage and is kind of are things explicit in terms of how you're going to engage and use this data. I think kind of that's like the right, the right approach to kind of always take.

Speaker 1: 26:26

And just to tap into something you just said, drew, so you know being explicit about what you're doing with the consumers data Again, thinking about the blockchain and open data sets as an opportunity and not as a threat.

Speaker 1: 26:40

You know, blockchains give us a great way for us to actually prove that we did something, and if that something that we did happens to be data analysis, or maybe we used a wallet to create a customer profile, that's something that we can. Also, we can put that on chain and there's now a record of the analysis the consumer can actually use Very clearly how their data was used and what the output of that data Amounted to and how that was used, you know, to maybe provide some more value to them. And so that's. You know. That's one thing about Web two today that we don't have. Like you were saying, drew, you go down the rabbit hole of privacy info on your Google profile and good luck. It's an endless trail of advertisers and data aggregators and ad tech platforms, and getting to the bottom of that as a consumer is really messy, really frustrating and not generally, you know, usable by the average person. So there's an opportunity here, I guess, is what I'd like to to share.

Speaker 2: 27:39

At this point, I'd like to get into some examples because I'm well, they're really helpful to understand the value of this in a in a practical matter, and also, I think it's important to get into them because, well, we are now at the point where we have plenty of examples. It's not like three years ago where this didn't even exist, but now there are examples, and from prominent companies, so maybe we can get into this. It's actually so so many examples of this that they're actually companies that are in the business of aggregating this information, this data and these insights, like Dune and Alchemy, for instance, and there are companies, as I said, permanent companies like, for instance, for instance, starbucks or Mastercard, that have used this for their marketing efforts. So, drew, would you like to talk about maybe these data companies, data aggregator companies, and how companies like Starbucks and Mastercard are using them?

Speaker 3: 28:30

Yeah, I'd be happy to. I think around, one of the kind of fundamental challenges as well with blockchain is like the way that the data is structured. So yes, there's so much information around kind of a wallet address, but oftentimes it's really hard to actually aggregate and index that data and so kind of I think kind of step one that we've seen around marketing and kind of customer analytics and data is A just indexing that data and making it easily accessible. So you've seen kind of an entire industry specifically around like indexers kind of pop up around. You know that's Alchemy and Morales and Ampura and many others where, like they're taking all of the blockchain data on Ethereum and you know all of these other chains and indexing it so you can more easily access that data. We build with lots of these API providers and index providers at Holder and many other companies do as well but like that's a lot of how we get some of the data and kind of pull it into our system. That's how a lot of at least kind of application layers are using this data as well. The kind of second layer of that I would say are some of the companies, like Dune and a handful of others but that are taking that data and then kind of putting a BI tool on top of it. So Dune's, you know an incredible data explorer. You can build dashboards and queries and kind of use all of their data to build, you know, really robust and interesting kind of reports around a specific contract or, you know, while it's engaging a specific way, and so I think kind of that's like step one is just the aggregation and kind of understanding of all of these analytics and kind of what happens around this, and one of the biggest challenges there that kind of was like step one. I think of like infrastructure. A lot of these companies you know they were formed pre-2021 hype you know as well, which I think is something to hit on Like they've been building kind of for a very long time in the space.

Speaker 3: 30:26

The next kind of step I think there maybe some example use cases as well is like looking at a lot of the traditional brands and whether they are fully launching, you know on-chain programs and campaigns, or even I know there's lots of brands as well that are just sitting on the sidelines but are looking at from like a consumer insights perspective and purchase behavior and kind of purchase patterns. Like there's an incredible amount of data just from like a learning perspective around what people are engaging with and what they're purchasing from a digital kind of purchase perspective. You know which you can't get in other ecosystems. I can't, you know, understand what people are purchasing in Fortnite, for example, and I'm looking at like other digital ecosystems, but I can look at every single you know on-chain wearable collectible that people are purchasing in, you know, decentraland or one of the other kind of like Web3 metaverses, and so I think this is really interesting. You're seeing a lot of brands like also just use that data for like consumer insights and what are people purchasing, what are purchase behavior patterns? How should we be thinking about entering this space or thinking about our kind of digital economy strategy and kind of D2C strategy as a whole, and I think there's probably not a Fortune 500 consumer brand that in some way isn't kind of thinking about or doing something in this realm, and then I think kind of the that next step is like fully kind of immersive and so like just a couple of the ones that I'm particularly a fan of, one would be I think this gets talked about quite a bit, but I think it's really really still a great use case is the Starbucks Odyssey program.

Speaker 3: 32:03

So Starbucks, you know, has been a premier leader with their loyalty program for many years. You know they always are on the kind of the forefront of technology, one of the first like with a mobile app, one of the first restaurants and kind of in chains with mobile pickup. You know this is like in mobile ordering. This is pre COVID. You know they kind of led the space in a lot of this kind of technology. Their loyalty program, with their stars and on their mobile app, has been leading for many years and they decided to launch a standalone loyalty program called Starbucks Odyssey. That under the hood, is all built on top of blockchains, all of the points and the stamps or NFTs, but really kind of from a consumer perspective which would I admire all of this is kind of obfuscated out and it just looks like this is a unique loyalty program, a special loyalty program that I get access to or that I was on the waitlist for and got kind of accepted into to better engage with Starbucks and learn more about Starbucks's history.

Speaker 3: 33:02

And they have kind of lots of this. They really view it as a game, you know. I mean in many ways, like I'd say like if you look at a lot of the language that they use, even like they don't talk about blockchain a lot, but they talk more around like these are you know quests, these are journeys that you go down. These are it's kind of more of like a gamified experience for how to engage with Starbucks, and I find this kind of really valuable and just a couple of the things I think that have made it successful so far. One is this kind of obfuscation of making it very simple and easy for a customer to onboard without even having to know what a wallet is or what the blockchain is or anything like that.

Speaker 3: 33:39

And then the second, I think, is that from day one when I created my account, I signed in with my existing Starbucks loyalty account, and so today they now know you know how for many years I've had a Starbucks account and all of the coffee that I've ordered on that Starbucks account is now also tied into my kind of Starbucks Odyssey wallet and kind of program experience, and so they're starting to kind of merge these identities and you don't really see much of it today being kind of played out, but you can only guess where kind of this is going and how they have more unified experiences to kind of bring this into the overarching kind of ecosystem of my experience with Starbucks.

Speaker 3: 34:20

And so it's kind of interesting that now I feel like I have like real ownership of like my Starbucks Odyssey stamps and kind of point system and kind of comparing that to some of like the traditional Starbucks loyalty stars that I have and the like, the value I have of kind of the two of those and it's just an interesting kind of experience as being kind of someone going through the experience personally. But I really kind of applaud what they've done and got to hear from one of the founders recently at an event that was like working on that program, speak a lot about it. It was kind of interesting just how they, how they think about it and kind of the reasons why even they were looking at a program like this is really kind of incredible to kind of look at.

Speaker 2: 35:08

There's one more example I would like to talk about, and I think this one is interesting because of what you said before, drew, about the death of the cookie, because it could, in a way, resurrect the cookie. So this is about Reddit and what they've done with their Web3 program, and Nick here has a theory and I would like to hear the theory and then maybe, drew, you tell me what you think of the theory.

Speaker 1: 35:38

So quick recap on the Reddit digital collectible program. So about a year ago, somewhere around then, reddit rolled out this program, where the way that Reddit works for anybody who hasn't interacted with their platform it's a community forum essentially, and where the real value is is that you have these subreddits, and subreddits are basically subcategories or topics. They're created by individuals and they're actually managed and moderated by individuals as well. So it's a very grassroots community oriented platform, and Reddit last year rolled out these digital collectibles that could be used as your avatar. So on their platform you have a little user image and they paired with, they partnered with artists and collaborators and they created all of these limited edition digital avatars. Just, you know, interesting artwork, fun, plays on different themes, like Halloween, and they sold these as digital collectibles and so you could buy them directly through the platform. It was a really great user experience. It still is. They're still doing it. You can purchase those things in the app. You know which, up until the Reddit program was not something that was easily done, and so they've made the UX really, really simple for the consumer.

Speaker 1: 36:50

But everybody is kind of asking okay, why? Why is Reddit creating these digital collectibles? Why are they selling them. Obviously, they're making money on them, but there has to be a bigger strategy here, and so here's my theory.

Speaker 1: 37:01

My theory is that Reddit's core value proposition is community. That is what they've built their entire defensible business strategy around. Are these communities of people. And as the internet gets more open, as we start to go from online to on chain, we're going to get into a world where some of that defensibility changes. Right, because your community is now out in the open and they can go wherever they want and you're going from platform to platform with your data.

Speaker 1: 37:28

And I think what Reddit potentially is thinking is that these digital avatars become a way for customers to kind of show their allegiance or represent their community outside of Reddit in the broader on chain ecosystem. So now, as I'm going around and I'm connecting my wallet to other places or I'm interacting with other apps or platforms, I have a digital collectible from Reddit. So it's clear that I'm part of that Reddit community and it's easier now for them or other marketers to find Reddit communities outside of the Reddit platform. So my theory is that they're trying to get ahead of this opening of the internet with blockchain, data and really giving people a way to kind of raise their hand and say hey, I'm a Reddit user.

Speaker 3: 38:11

What do you think of it? I love that theory. I am, broadly am, just a big fan of the Reddit digital collectibles program and the team kind of running it there. Yeah, I was just pulling up a Dune dashboard if maybe we could share in the show notes after this too, of the Reddit collectible avatars, and it's just kind of incredible. There are already 15 million holders that have that hold one of the Reddit collectible avatars or so over 40 million dollars in sales volume already from primary and secondary.

Speaker 3: 38:47

And so when I think about traditional brands, it's really funny too, because a little bit of a juxtaposition to like, early on, reddit users and community were very anti-Web3, very anti-crypto and I think for lots of reasons and a lot of around kind of the stigma of crypto, in particular the ICO, kind of boom in 2017 and kind of fall, and so I think kind of when NFTs started exploding, they were very anti-NFTs and Web3. And I think Reddit's kind of completely turned that around and kind of put their own brand spin on it. That makes it work with what kind of Reddit already stands for. To your point, nick, and so I think that when I look at Reddit, they've probably onboarded more people than almost any other company into Web3 through these Reddit collectibles and doing so many kind of fun things focused around pop culture and what's happening with whether it's the World Cup and Super Bowl, kind of special edition avatars, but like they're just kind of really touching into kind of culture and what's happening.

Speaker 3: 40:00

And I think, nick, to your point around, like a lot of it focuses around kind of identity and my kind of digital identity, and Reddit has it's been very more like closed wall identity in kind of the Web2 era.

Speaker 3: 40:16

You know people associate with kind of a Reddit identity but it's been a little bit like kind of divorced from their like Twitter persona, for example, or like their Instagram and things like I don't, you know you don't see people promoting like go follow me on Reddit. You know it's more around kind of that very specific kind of engagement within that subreddit and kind of community that they're a part of. Like that's where kind of their identity and brand is, and so I think there's it's an incredible strategy and kind of I think we'll see where it goes of like well, how do you try to extract that out of Reddit and kind of bring it into other spaces across the internet? I think that that's a really powerful strategy, regardless of where this goes in the future, I think they've really hit on something around what Reddit users want to engage with when it comes to collectibles, which is really cool.

Speaker 2: 41:10

Yeah, the future part is going to be hard. But before we get into that final question, just one comment about the challenges, because, well, we've heard about these companies using Web3 already, but I'm sure that there are challenges for these businesses and others when trying to harness this information and these data insights within the Web3 environment. Maybe, drew, could you talk a bit about these challenges and maybe ways that could be used to overcome them.

Speaker 3: 41:40

Yeah, I think we've talked about a couple of them. I think one is just access to this data. How do I ingest this data and aggregate it all? I think. Two another one of the biggest challenges we see teams face is around privacy and governance and the regulatory environment. Particularly. That is more like an internal discussion in politics challenge for a lot of brands. The third, and this is more into where we're a holder, we try to play, but I think for the last, however many years, it has been nearly impossible, if not impossible, to connect and message and communicate to customers.

Speaker 3: 42:27

Oftentimes, you'll launch an FTE project or a program and you know who your customers are, but it's this list of 10,042-character, 0x Ethereum addresses. I think oftentimes, brands are stuck around. We've launched this campaign and we do the Web3 thing of launching a Discord and that side of things, and I think where it can fall flat from continued engagement and loyalty that a lot of brands struggle with is how do we build a more lasting customer relationship? So that starts to get more into a sales pitch for holder, but I think that's just like why we exist and why I'm doing this too, though, is I think there's so much opportunity broadly with this technology with the way the brands can engage with customers in a whole new way.

Speaker 3: 43:20

I think we have to think really strategically around it as marketers around. Well, how do we make this holistic? How do we make sure this is not just a flash in the pan and how do we make sure this isn't just for PR headlines, but how we make it a holistic part? It's a brand new channel for all of our marketing efforts. And how do we unify that altogether? Yeah, the shameless plug is most recently, here at Holder, we launched a product called our Wallet Messaging platform, where you can actually send messages directly to a fully anonymous wallet address on the XMTP protocol. We are trying to get there to bridge that gap between brands and their customers so they can directly communicate with them. I think we'll see more and more innovation in this space over the coming months and year, but I think we're in a good first step around. How do we help just bridge that gap between brands once they have launched a program, and those customers to keep that engagement and that relationship ongoing?

Speaker 2: 44:25

This Wallet Messaging feature could be very interesting for the reasons you said, and it allows me to give a spin to the last question. I would like to ask you about the future. If you could send a message to the future through Bitsler about how he would like to see the shape of the usage of customer data in Web3, what would you say?

Speaker 3: 44:52

Yeah, it's a great question, I think, the future. I'm really excited for more and more experiences that are like how do we build the 10X better customer experience? How do we find experiences where Nick, you talked about this earlier as well but a lot of the crypto technical jargon is extracted out and it's just around providing unique experiences for customers that are 10X better than what we've had before. I think, as I think about the future of Web3 and where a lot of this is going is more personalized, it's built on more transparency and gives consumers more ownership. Those are the tenants, I think, where we'll see more and more brands moving with making their marketing more transparent and ownership driven in this new Web3 way.

Speaker 1: 45:56

Very well said, drew. I, similarly, am looking forward to the same things. I think what's most exciting to me is looking forward to a world that is from a digital perspective, which is where we're going to spend more and more of our lives online, but where those experiences are fluid, where they're interoperable and we're in the driver's seat for how we experience things, how we interact with things. I think we're on track, with this technology and this data, to be able to do that.

Speaker 2: 46:23

Drew Bitzler, Nick Casares, thank you for being here at Marketing Meets Web3.

Speaker 1: 46:30

Thank you. Thanks so much for having me.

Speaker 3: 46:31

This is an absolute blast. Excited for this whole series and all the guests in this series are all incredible. I think there's going to be a lot of really good knowledge to take away. Thanks so much for having me.

Speaker 2: 46:43

We hope you enjoyed this conversation. In the next one, we will be talking about how seamless onboarding experiences empower customers to take control of their digital assets. To listen to the entire four-part series, visit stepio. You will find a link below. The one last thing if you enjoyed this episode, consider giving it a like or a share. Thank you.