What Reddit’s NFT success can teach brands about Web3 marketing

In just three months, Reddit onboarded 2.5 million crypto wallets through its NFT marketplace—all without ever using the word “NFT.” The online community site has drawn users by hawking “collectible avatars,” which are similar to Reddit’s typical, profile-pic avatars, only that they include unique benefits and are backed by blockchain technology. For example, owners have full license to use the art of their avatar on and off the platform, and owners’ profiles will also feature their tokens in a visible way, a la Twitter’s NFT integration. Reddit opened its marketplace to select users in July, then released its first publicly available drop soon after—a collection of 40,000 avatars that has since sold out. By mid-October, over two million avatars had been minted, either through purchases or free airdrops to high-contributing users. But the real sign of success has been the number of new wallets, called “Vaults,” that the site has been able to register. While probable that fewer than 2.5 million different users registered the 2.5 million wallets (since one user can register as many wallets as they want), there is no doubt that Reddit has built one of the largest early audiences to engage with its Web3 program. The collectible avatars are most definitely NFTs, but there’s a simple reason why Reddit chose to call them something more straightforward: “We made the decision to make [the experience] more approachable,” said Neal Hubman, Reddit’s global head of client solutions. “It's really about what it can offer more so than all of the jargon and back-end technology that gets thrown around.” Web3 marketing trailblazers Entries are open for our first official Web3 honorific Enter here At the beginning of the NFT boom, marketers glady promoted their tokens with the technology front and center. But as substantive strategies have supplanted short-term plays, brands need to recognize that Web3’s technical infrastructure is a double-edged sword: It can enable new kinds of engagement but also turn away consumers for being too complicated. More brands are starting to pay attention to the need for approachability: Starbucks’ much-hyped Web3 loyalty program, which launched in September, bills its NFTs as “stamps,” bringing to mind an object that should be collected, not a file type that needs to be understood. Likewise, the NFTs on Paramount’s “Star Trek” marketplace are called “ships,” and those sold by Sorare, an NFT-based fantasy sports company, are referred to as “digital cards.” As for Reddit, the site’s 2.5 million new registrations are even more notable considering the desolation in the NFT and crypto markets. “Crypto winter,” as the downturn is often called, has increased the need for brands to be intentional about how they market in Web3. Otherwise, they face the risk of being associated with volatility, scams and an overall unlikeable space. “Timing couldn’t be worse to launch something like this if you called it an NFT, if you talked about blockchain and crypto and even Web3,” said Geoff Renaud, co-founder and chief marketing officer of agency Invisible North. “I think it was really vision [from Reddit] to cut all of that out of the shot.” Smoothing over complexity Behind Reddit’s success is an understanding that Web3 is complex, and the technology that underpins it will almost certainly go over many consumers’ heads. Approaching nearly two full years in the mainstream spotlight, the space has yet to see a big push toward stripping away its technical exterior because most of the fans remain highly technical people themselves, said Renaud. Reddit has been able to reach less familiar audiences by smoothing over some of the more unapproachable aspects of its NFT experience. Beyond rebranding the concept of an NFT to a collectible avatar, the platform also refers to its crypto wallet as a “Vault.” In a way, a crypto wallet is a kind of vault, securely storing an individual’s cryptographic keys so they can access and use their digital assets. Reddit originally rolled out Vaults in 2020 when it launched Community Points, a separate blockchain-based asset that Redditers can be awarded if they contribute to a community. It made sense to store avatars in the same place as community points because they both leverage the same technology, said Hubman. But even this detail contains a helpful simplification. Crypto wallets don’t actually store assets, but rather the keys to access assets; digital assets are stored on a blockchain. Since most consumers likely won’t care about this information, and it doesn’t affect user experience, a brand should ask itself if it’s even worth explaining. The same goes for sustainability. NFTs have largely been criticized for their negative environmental impact, but in September an upgrade referred to as “The Merge” made the Ethereum blockchain—which houses 80% of all NFTs—99.99% more energy efficient. Instead of explaining the update and potentially creating more confusion, Reddit simply cited in a press release its blockchain’s commitments to sustainability and linked to more details on the network’s website. Reddit used the Polygon blockchain, which is built on top of Ethereum. The platform also enables its NFTs to be purchased with fiat currency like the U.S. dollar, as opposed to merely crypto. This practice has become popular with all types of brands offering NFT services, from payment processor Stripe to Fox Entertainment. Since investment exposure to crypto remains low amongst most Americans, and transactions using crypto even lower, allowing a fiat gateway is an easy move to further lower the barriers to entry. “Stamps,” “ships” and “cards” While Reddit may be one of the biggest recent successes in NFT marketing, it isn’t the only brand leveraging a strategy of simplification. Starbucks calling its NFTs “stamps” is a move to make the tech much more palatable, as is calling various opportunities to collect the stamps “journeys.” Based on which journey is completed, a customer will receive a NFT assigned a point value with respect to rarity. In an investor conference at the time of launch, Brady Brewer, Starbucks’ chief marketing officer, explained the choice of terminology: “[Many] customers will not even understand that they are working on the blockchain or with NFTs because Starbucks is easy and accessible for everyone. That is what we're trying to do with this…making leading-edge technologies accessible to all of our customers and deepening their love and engagement with Starbucks.” Starbucks declined to provide additional comments for the story. For its Star Trek NFT marketplace, Paramount consciously stayed away from using crypto-based language because it would be a distraction from the value the company was trying to deliver, said Doug Rosen, senior VP of games and emerging media at Paramount. The NFT collectibles are referred to as “ships,” and the rest of the marketplace contains very few allusions to anything blockchain related. “Every design decision, everything we brought in from how we talk about the ships, how we talk about some of the game mechanics we're building into it, the idea of “calling all captains”—which was the big marketing hook at the beginning— was really just about making it approachable,” Rosen said. Sorare has made similar efforts in the sporting world. The platform teams with professional sports organizations, such as the NBA and MLB, to offer an NFT-based fantasy game, but its assets both resemble and are referred to as “digital cards.” To this end, Michael Meltzer, head of business development, does not consider Sorare an NFT company at all, but rather a sports company that happens to use NFT infrastructure. "A lot of people talk about NFTs as if it’s a single market or category, but in reality it’s simply an underlying technology that enables all kinds of different products and use cases,” he said. Ad Age Next: CMO Get your tickets for the Dec. 7 event in New York Register here

What Reddit’s NFT success can teach brands about Web3 marketing

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