Building Deeper Consumer Connections in Media and Beyond

Speaker 1: 0:00

Welcome to Marketing Meets Web3, a podcast that helps marketers navigate the news trends, opportunities and insights surrounding Web3. Today's conversation is for information purposes only and does not constitute legal or investment advice.

Speaker 2: 0:23

Hello Nick, how are you doing?

Speaker 3: 0:30

hello nick. How you doing? Hi, alberto, I'm doing well. It's a thursday, the sun is shining, it's warmed up where I am, so, yeah, I'm ready to dive in and talk about the news yeah, it is.

Speaker 2: 0:36

um, it's warming here as well and the whole world seems to be warming up towards the idea of memberships, and we have a couple of pieces of news today to discuss that speak along these lines. And I want to start with one piece by Francisco Zaffarano, written for Nieman Lab, which is an analysis and research institute, and this piece is titled memberships go off platform and, of course, here the author the author is discussing how innovations in the media industry are focusing on a couple of things in particular first, the shift towards membership models and, second, the rise of platform-based news brands, leveraging social media for journalism. Of course, between these two, I want to focus on the membership part and we can talk a bit about the the piece and some of the details that he's sharing in it. But I want to hear your first take on this because, yeah, it seems that, well, we're usually talking about memberships, but it seems that it's not only us any longer. There's a lot of people talking about memberships these days, don't you think?

Speaker 3: 1:54

Yeah, I think memberships are top of mind for a lot of companies and a lot of industries, even outside of media outlets. I think memberships are starting to take on a new sort of life within the product lifecycle. You know, this idea that memberships give you deeper access and engagement with a brand I think resonates with the younger generation. A subscription which typically, if you think about you know a media outlet, for instance a subscription feels very transactional. You know you charge my credit card every month and I get access to whatever it is you're offering, but that's not a dialogue. That feels like a very transactional relationship which I think in general, especially younger generations are trending away from these sort of transactional and transactional focused interactions and they're much more interested in connecting with brands, products, ideas that resonate with their life perspective, with their values, that they can feel like more invested in and not just like somebody who's paying a credit card bill every month. So it makes sense to me to see this happening in the media world. I think media in particular is pretty sensitive to people coming and going and you know, with a subscription it's one of those things that you kind of you turn on and you forget about and you check in once in a while.

Speaker 3: 3:19

Am I getting value? Am I not getting value? Am I getting value? Am I not getting value? But there's no real way for a consumer to gauge that value. Other than, did I read something interesting in that publication today? Whereas with a membership, I think you can start expanding the value proposition. You can create more membership perks, more opportunities to engage, where for the consumer who's paying for a membership every month now it starts to feel like I'm getting ongoing and consistent value instead of well, I read two articles this month. Was that worth the $9.99 that I'm paying? So I think this makes a lot of sense and I'm curious to see where this goes and if this continues to pick up as a trend in the publishing industry.

Speaker 2: 4:00

Yeah, okay, I want to highlight one thing that you said.

Speaker 2: 4:03

Yeah, okay, I want to highlight one thing that you said, and I want to also hear what you think about one aspect in particular, because I really so I was and this article definitely calls them out, speaks about Gen Z and millennials in particular, and he says that they are inclined to support these platforms and these news medias, but they rather do it through a membership than through a subscription.

Speaker 2: 4:45

Which takes me to the second thing, and the Gen Z thing is important because we're going to be talking about it in the next piece as well. But this takes me to the next thing, which is we went from free Internet to subscription Internet, and now it looks like we're moving towards a membership Internet, and now it looks like we're moving towards a membership internet. And I want to hear from you the difference, because, if you read the article, or Francisco's take in particular, he speaks of memberships as being something that is able to engage audiences in a different way, and also talks about these membership models fostering a deeper connection, but he doesn't get into any detail as to, okay, how exactly is a membership doing this in a way that is different from a subscription. He also talks about some examples and we're going to cover them, but I want to maybe spend a minute on this because, yeah, so how are memberships in this case, or how could they be different from subscriptions?

Speaker 3: 5:51

I think, at the core of it it comes down to the way that consumers perceive membership versus subscription models. So subscriptions were really, I mean, in some ways invented by the media industry. You know, before we had the internet, you had magazine subscriptions, you would subscribe to publications, which meant that you paid this sort of ongoing fee for access to things. And as the world digitized and came online, we adopted that same metaphor and said well, you're getting ongoing access to internet, or you're getting ongoing access to a service or a particular news outlet, so why don't we just call that a subscription? And there's, you know, there's a whole category of software companies worth billions and billions of dollars that has the foundation of their business. Is on this idea of a subscription right? Software as a service or as a subscription? You're basically paying a monthly fee to get access.

Speaker 3: 6:49

What is unnatural about that, I think, for people, especially when it comes down to things that matter to them?

Speaker 3: 6:56

So these could be, you know, things like news. Do the news, does the news outlet, align with my personal values and the way that I see the world? Does it challenge me? Does it stimulate new ways of thinking Like these are getting to deeper levels of people's needs and personalities, and when it comes to that, I think subscription is just a cold way to frame a relationship, whereas membership when I'm a member of something, I'm part of a community, I'm a member of something, I'm part of a community, I'm a member of a club, I'm a member of an organization, which means that there are other people involved, and so I think memberships are starting to nudge us in this direction, toward connection with community, ie other people, and through that it means that we have some sort of expectation of being able to foster relationships and deeper, deeper and more meaningful connections with the people in that membership, whether it's other members or, in this case, you know, a news outlet who's creating this membership? No-transcript.

Speaker 2: 8:04

Yeah, and yeah, I agree with that, because with the membership, there is something else expected, because when the user subscribes to something, right, they're gaining access to whatever the subscription is about and that's it, and they are not expecting anything else because, well, they're paying for their subscription to this. But when they pay for the membership, uh, they're expecting something. Right, it's a bit, um, it looks like we're getting closer to what, um, what systems and services like patreon we're doing, um, you know, just, uh, making it or allowing for for users to be part of, be a part of something, and when you are a part of something, when you're a member of something, just pick something else, something more else coming from the provider.

Speaker 2: 8:55

And in the piece, francisco speaks about what the Guardian, which is a news media outlet in the UK, is doing and how it is different from what other media outlets are doing. And the Guardian has been able to roll out this membership and to actually grow a lot in its users thanks to this membership, which is a bit different than what you get when you subscribe to something like the Financial Times and other media outlets, to something like the Financial Times and other media outlets and, following this success, some other outlets and he suggests the news movement and Hugo the Crypt have done something similar Again, building online communities. And yeah, I think communities and memberships they kind of like go together, and maybe it's a Gen Z and Milan thing, but it really does feel to them that they're going to be better cared for if they are members of something than if they are just subscribers, which means like they're being sold something right, whereas in the membership part they are being part of something, wouldn't you?

Speaker 3: 10:01

say Absolutely. Yeah. I mean especially younger generations who grew up on the internet. You know, these are digital natives, people who have have never known life without the Internet. They have basically their entire lives, most of their young adult lives, have been accustomed to being treated as a number, right, so online anyway. So you know, their interactions have been kind of generic in terms of interacting with big social media platforms.

Speaker 3: 10:31

You know, the promise of social media was that we could create these communities online, but then social media and the Internet grew so big that it became really kind of impossible to have meaningful connections to the things that we care about. And, granted, those things do exist. There are online communities. I don't want to make it sound like we can't create connections online, but for the average person who's trying to create connection with the things they care about online, it's become much harder. There's just a lot more noise out there, and so this idea of membership, I think, is attractive, not only because it reframes the relationship around the value that somebody receives, but also, I think, is speaking to a deeper, maybe psychological or emotional need in younger generations to feel connected to something that aligns with them. And so this is as much, I think about personality and culture, as it is about, you know, reframing the way we deliver value on the web and this connects to this, connects to the next piece, which which is, well, it's not really a next piece or differentiated from this one.

Speaker 2: 11:34

I actually want to connect it because, um, this is an article I found about um, women's health uk and men's health uk prioritizing membership schemes in 2024. And this was taken, or this headline was taken, from a person who is, I think is, the editor-in-chief for these two outlets and he was saying that they are going to be prioritizing these memberships and, of course, because they are a membership and not a subscription, they come with something extra right. In this case, they were going to be building these apps with exclusive content and workout plans. The name of the editor-in-chief is Claire Sanderson and she was emphasizing that memberships are going to be the way forward, which, again, I think, is a good example of this trend that we are talking about, because, well, we talked about what the Guardian is doing, these other two news outlets, and here we have a couple of big ones, a couple of big magazines Women's Health and Men's Health again also following this direction and adding something extra, which is, I think, what we're talking about, because, when it comes to memberships, people are expecting something else.

Speaker 2: 12:53

Right, if, if you are, if you would become a member of men's health and do the same information and the same access that you had when you were subscribed to the newsletter, that wouldn't make out of sense. But yeah, in this case we have this, this company, this magazine pivoting towards memberships because they think they can give or create more value for their users absolutely.

Speaker 3: 13:17

You know, one of the underlying differences that I see between memberships and subscriptions is, with the subscription you are kind of locked into a promise between the business or the brand and the end user or the buyer.

Speaker 3: 13:32

If I tell you that for $5.99 a month you can subscribe to my magazine, the expectation, your expectation, is that you're going to give me $5.99 a month and I'm going to give youa magazine every month, and that's our conduit for value.

Speaker 3: 13:47

That's how we exchange value.

Speaker 3: 13:49

So the premise is based on this very sort of narrow idea of value exchange. If we'd say instead that for $5.99 a month you can become a member of my brand and within that brand you're going to get access to value that can change over time, based on the unique needs and wants of the membership, then we've opened up the opportunity to exchange value. And so now, as a business or a brand, maybe I give you a magazine this month, but maybe I also give you an exclusive invitation to an event, or maybe I give you a partner offer, because I know that that aligns with your interests, because we're part of a community that, to me, is much more dynamic, it's much more interesting and from a business perspective, it's also a much more flexible way to be able to iterate with the business model and have fluid product development so that, as you're creating new value for your customers, you now have a much broader palette to paint with when it comes to delivering value, and it's not just about this single subscription that you're getting for a set price.

Speaker 2: 14:58

We'll be right back after a word from our sponsor.

Speaker 1: 15:02

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Speaker 3: 15:23

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Speaker 1: 15:27

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Speaker 2: 15:28

Go to step threeio to learn more we've seen and we've talked about here before is that, well, in some cases, um, a lot, of, a lot of different businesses, they have, um, something that they produce that they may not sell directly but could be still valuable for, for, maybe something that you cannot share with everybody, because it wouldn't be easy to do, but you could share with a few members and make them feel part of that and provide some value in this way, some value that, of course, you're gonna capture thanks to the membership.

Speaker 2: 16:02

And, in particular, this magazine is offering things like direct participation in the editorial process, which I think is, uh, I mean, it's one thing that I mean, if you have a magazine, you probably haven't thought about it right.

Speaker 2: 16:16

Um, you have this magazine, uh, people buy it, people read it, people subscribe to it and, um, you have this thing that you're doing which is editing these pieces, uh, these articles, and, um, well, it's one thing that you have to do, it's part of the process. You may not think that this is valuable, you know, to be shared or to be offered to anybody, but well, there's probably a lot of people that would like to be, would like to participate in this part of the process, and they are offering this possibility if they are members of the magazine, and I think it's a good example of a resource that exists in some businesses that may not be captured at the moment, and I guess this is something that happens in all of the businesses and for some reason, yeah, some of them are not taking advantage of it, and in this case, I think this magazine is doing that.

Speaker 3: 17:15

I agree with all that. Yeah, I think it's a very smart and strategic way to reframe value, especially considering some of these trends that are happening with younger consumers and a world that keeps getting more and more digital every day.

Speaker 2: 17:28

Yeah, no, it's cool to see this, because it doesn't matter in which business you are, but I'm sure that there's something that you do that could be interesting for a member or to a potential member.

Speaker 2: 17:43

And yeah, I think it's cool because, well, I hadn't thought of this either, and I think it's a good example of something that could be inspiring or could serve as inspiration for others. And likewise for the next piece of news, which is about Gatorade, which is, of course, a substitute to coffee or candy, and water and water, or can be, and water and water, and yeah, so Gatorade they have announced a new membership platform and, of course, this one is also targeted towards Gen Seed, which again makes me think that there's something here. So there's something going on with this generation that they love to be members of, stuff that, yeah, gatorade is launching this, um, this platform called Gatorade ID, a loyalty membership program designed to capitalize on the fact that these people, this generation of consumers, they love to be a part of a membership and they also like, more than previous generations, sports and fitness. So, yeah, they're working on this thing and I want to explore with you precisely what they're offering and specifically how this kind of membership could be improved. Maybe, you know, adding some kind of web 3 to it.

Speaker 2: 19:08

But yeah, let's talk a bit about the, the program. What do you think about of it?

Speaker 3: 19:13

well, first of all they got dj caled involved.

Speaker 2: 19:15

So you know, there's that I know, I know this guy, I mean, I don't know this guy.

Speaker 3: 19:20

This guy shows up everywhere. He's got a song I like he's got. He's got to be a brilliant marketer. I mean, he's in every deal. Um, no, but yeah.

Speaker 3: 19:29

So they've had this um sort of customized experience in the past this gatorade gx thing and now they're pivoting that into this, this membership platform, and so it's called Gatorade ID. It's this loyalty and membership platform, um, that's really. It's designed to cater to a Gen Z audience who wants to be more immersed in the culture, who wants more opportunities to customize their experience and customize their products, and so it's a free program. Uh, right now that's going to be launched and offer members different kinds of ways to customize, customize products, so being able to customize their towels and their water bottles, and you know all of the stuff that Gatorade does in their direct to consumer channels. They're also going to be offering limited edition product drops. So this is a trend that we've seen. You know, in the web three world, this happens a lot. So you know, adidas is one of the first companies to partner with an nft collection and they did the board apes drop with with adidas.

Speaker 3: 20:29

Um, and regardless of whether or not you know anything about that history of things, I think this idea that exclusivity is coming into the realm of product distribution is really interesting, and I think it's leaning into a lot of the lessons learned from uh, some of the web 3 hype cycle that happened around NFTs a couple of years ago.

Speaker 3: 20:55

So probably some interesting stuff to dig into there. Who's bringing in some not only brand power and some influencer power, but it looks like he has a hand in some of the design of the products too. So, according to, is it Bossin? I'm not sure what this person's role is at Gatorade, but this is a quote from them. It's the beginning of a new evolution for the brand and how we engage with consumers, how we speak to the Gen Z consumer and how we we continue to innovate. So a lot of the things that we talked about a few minutes ago in terms of why memberships are this great new opportunity for brands to start engaging in different ways. I think this example of gatorade is a perfect uh way to highlight those opportunities yeah, and we continue to see the same things.

Speaker 2: 21:44

right, he's speaking of the fact that this generation, they love really special things, like unique, differentiated items. So it's good to have a Gatorade towel, but if I could get my own version of this towel, then I would gladly pay for that. I would gladly become a member of this membership program in order to receive this one, because that would make it somewhat special, whereas the other towels are just Gatorade towels or Gatorade drinks or whatever. But what is cool again is that we're seeing the same ideas popping out in all these examples, and I think it's exciting to see that they're all jumping on the membership idea. They are all thinking okay, what is it that I have to offer that I could be offering to these members so that I can take care of them in a way that they feel special and that they feel happy about being part of this membership and they don't just abandon the ship the moment they remember that they were members of this thing.

Speaker 2: 23:02

So I think this is cool. However, there's something in it cool, um, however, there's something in it. No, there's something in it being all of them somewhat similar that makes me think that maybe they're missing out on something that they could be maybe exploring. Uh, I mean, if you're a company in 2024, uh, rediscovery memberships and trying to do something special for your, for your customers and for your audience, for people that like what you're doing, maybe maybe you could go one step beyond just normal memberships. What do you think?

Speaker 3: 23:39

Yeah. So I think what you're poking at here is there's a missed opportunity potentially in this, this move towards memberships, or there will be a missed opportunity. Here's how I see it. So let's say that we have 20 companies, 20 different brands, that all create these membership programs, and obviously that's in tune with the culture, that's in tune with Gen Z's desire to have deeper interactions with brands, to customize products in the way that they want them. Have deeper interactions with brands, to customize products in the way that they want them.

Speaker 3: 24:06

How many memberships can a person join before they start to get membership fatigue? You know, we saw this and it's still happening with subscriptions, right. How many subscription services do people have that bill their credit card every month? You know, just in the streaming world alone, you know you might have Spotify and Apple Music and Hulu and Netflix, and you know, and pretty soon you're like, ok, well, I thought we were going to reduce our cable bills and the amount we spend on media consumption and now it's double what we were spending five years ago because we've got so many of these subscriptions and we're really only getting little slices of value. You know, there's only so much music I can listen to during the day. There's only so much Netflix I can watch during the week, and what I think starts to happen is that people just get burned out with these subscriptions. And I think the same, the same potential pitfall, could happen with memberships. You know, it's cool to be engaged, it's cool to find your space with a brand, but at the same time, how much time can a person devote to these brand interactions?

Speaker 3: 25:07

So where I see a really interesting intersection of Web3 and memberships is the idea that Web3 basically gives people, consumers, the ability to take ownership of things. And so when we think about a membership pass, for instance, if I give you a membership pass to my club right now, if we do that in a Web2 way, it's only. If I give you a membership pass to my club right now, if we do that in a web two way, it's only good at my club. You come to my website, you log into my, my member center, and now I'm the one who can deliver benefits and rewards. But I'm the only one who can do that. I'm the only brand who's playing that game. Web three is interoperable by nature, which means that if I have a Web3 powered membership pass, I can plug into brand A, but I can also go over to brand B and brand B can say hey, you have that membership pass, we're going to honor that and give you some sort of special perk or reward.

Speaker 3: 25:56

And now these memberships can start to come together as a more complete way to deliver value to a consumer across their entire range of lifestyle preferences and interests.

Speaker 3: 26:09

And so you know where I was paying for a membership that got me access to content and membership that got me access to something related to sports. Maybe these things come together now and maybe those brands are partnering to deliver joint value or to deliver value in ways that reinforces one another's brand. That's an interesting opportunity that only exists right now. At the highest levels have the financial power and the customer bases to be able to connect dots, and now you can drink coffee and earn points at the very low level. You know very small businesses can cooperate, but that doesn't scale, and so you can only do that for 100 or 200 customers.

Speaker 3: 26:57

Before it comes unwieldy, web three gives us this great way to now start connecting the dots between these memberships for businesses of all sizes. So now, if I'm a member at Starbucks, I can also use my Starbucks membership pass and prove that I'm a member to get benefits at a much smaller business, small businesses to start playing together to really start catering a complete, a holistic value proposition to consumers that is all encompassing of their lifestyle interests. So that's where I see the opportunity here with Web3.

Speaker 2: 27:35

I knew they were missing out on something. Of course that's what this podcast is about, isn't it?

Speaker 2: 27:43

Yeah, I mean, it's really refreshing, you know, to listen to these ideas. I mean, of course, we discussed how some membership programs that are being launched and are being improved Like previously we talked about the CostCoast program being improved. We discussed how these programs are being launched and improved. We discussed how these programs have been launched and improved. But, yes, it is interesting to see what the technology can or how the technology can improve on them and create more value for both customers and also for brands. Because, yeah, that's the other part.

Speaker 2: 28:19

That is also interesting and I think it's even more interesting for smaller companies. Right, that is also interesting. And I think it's even more interesting for smaller companies, right, as you said, because I mean, if you're a Starbucks, you have enough clients already and you have enough of an offering that you can have your own membership program and it's probably fine. But if you're a smaller company, then you and your customers can benefit from this joint kind of membership programs that are able or that are possible to create thanks to the, to the technology. So, yeah, I know, I think it's great to look at what's happening. It's great to see these memberships growing and these companies um, launching and thinking of them.

Speaker 3: 28:55

Uh, it's been interesting to see this happening in the media world, which is not a sector that we had discussed before, so so, yeah, that that's been interesting and, yeah, any parting thoughts you know, I think, anybody looking at the space if you're a marketer at a big brand and you're saying, well, you know why in the world would I let my members, would I give them a membership pass that then can be used by other businesses to reward them, you know, your first thought might be well, that that could lead to a competitive situation, and you might be right in some cases.

Speaker 3: 29:30

But those consumers that are leaving to a competitor probably weren't loyal to you in the first place and so they may not even be a profitable customer. But what's really interesting here is that for a large business who is able to empower members with a web three membership that then can be used with smaller businesses, that's actually a great way to signal to your customers that you care about them beyond your brand, and in my mind that fosters loyalty in new ways that brands haven't been able to tap into before, because now you can say you know what just because you're our customer doesn't mean that we don't respect that. You have other interests and other opportunities to engage with other types of businesses, and so it's really an opportunity, I think, to open up the aperture on how a business, how a brand, relates to consumers and shows appreciation and respect for their overall lifestyle. So, yeah, this is going to be exciting. Happy to chat about this.

Speaker 2: 30:26

We will be chatting about this, but that would be next time. For today, we can leave it here. Thank you for having. Thank you for being here, nick, and I'll see you next time. Sounds great, take care.

Speaker 1: 30:43

Thanks for listening to Marketing Meets Web3. If you enjoyed today's episode, please like and subscribe in your favorite podcast app. You.