Engaging your community and having a direct relationship with your audience has long been the goal of the multi-billion dollar loyalty and marketing industries. Brands want to reward their fans and incentivise continued interaction (it’s always easier to sell to an existing customer than to find a new one) but also understand that the fans themselves are their best promoters. Put simply, you’re more likely to use a product or follow a brand if recommended by a friend — your friends are more likely to recommend products that they feel real engagement and affinity with, from brands who reward them for the time and effort they put into supporting and following them.
Implicit behind the concept of engaging your community is the understanding that not all fans are created equal — superfans and advocates are much more valuable than the casual observer or follower. The fan who stays up all night to (virtually) queue for Taylor Swift concert tickets, who tweets about the new album, who streams it religiously on Spotify and who buys the merch is not just more valuable in terms of their personal lifetime spend, but also as a promoter to their own network, friends and family, selling the brand in a truly authentic way.
NFTs, as digital representations of ownership, are an excellent coordination tool around which brands can engage their audience. In particular they provide two clear benefits:
- Ownership improves engagement, turning fans into advocates
- The data is open and transparent, not siloed behind third party platforms
As longtime investors in crypto we have seen the impact that giving users and fans ownership provide: from airdrops to quests, crypto users have used and promoted native projects and brands, creating exponential growth and engagement as their own activity has been rewarded. However, to date there has been little attempt to link behaviour outside of crypto to NFTs; behaviours that are the natural expression of fandom or community (purchasing products, attending events, talking to your friends, posting on social media).
Some brands have dipped their toes into the crypto waters, but mainly to sell static images to the existing crypto community. While some have been successful, showing the potency of this tool for engagement, there is a huge market opportunity for a company that can harness the power of digital ownership to engage the billions of consumers who are not yet onboarded to web3.
Enter CUB3. Their Proof of Behaviour™ (PoB) solution allows brands to define digital user actions (tweeting, listening on Spotify, dancing on TikTok, etc.) and automatically generate digital rewards for those actions.
Furthermore, those actions can be linked, allowing brands to identify and reward the real and complex behaviours that identify true fans; the most valuable community members. These users can then be rewarded for their actions, with the rewards linked to the digital tokens issued for their behaviour. Furthermore, they do this in a way that doesn’t rely on the upfront financial expenditure of fans, whose engagement and excitement is not measured in the dollars they can spend, but in the real world activities they have already completed.
The importance of harnessing and engaging with your community is felt particularly keenly in the music industry, where tight margins and platform reliance have left bands without a meaningful connection to their audiences. Cub3 worked with early clients in this space, such as Duran Duran, Annika Rose, and Roxy Music to develop PoBs such as “attending a concert” and “listening on Spotify”. Clients saw engagement rates of up to 50% from their fans, orders of magnitude greater than the typical level of 5%, with a significant proportion of people engaging with challenges coming from reshares (the power of brand advocacy). The team is now rolling out their solution across other industries such as the charity, sports, and retail sectors.
For brands, the team provides an end-to-end self-service digital solution. Cub3 allows companies and communities to define, activate, and measure campaigns, within their scalable blockchain-based solution. The team uses machine learning techniques such as computer vision to identify and evaluate behaviours across multiple platforms, and provides analytics to monitor and evaluate their effectiveness, while abstracting the complexities around custody, issuance and measurement.
We are excited to work with Cub3 as they launch their Proof of Behaviour protocol, and to see brands and communities explore the benefits of permissionless ownership and open data.
Fabric is a venture contributor: building, backing and accelerating the boldest ideas in Web3, to create a more open and fair economy. As a top European Web3 fund, Fabric focuses on being the “first institutional cheque” invested in companies, crypto assets and digital networks on a path to be global winners, identified primarily through its peerless pan-European footprint.
The Fabric team is made of founders and operators who have built companies to over $3 billion in value, and holds operational & investing experience from Google, PayPal, Sun Microsystems, Visa, Accel, eVentures, and EQT. Fabric Ventures’ portfolio includes Sorare, NEAR Protocol, Coinbase, Sky Mavis (the team behind Axie Infinity), Nansen, Consensys, Messari, Polkadot, Ledger, Ramp.network, YGG, Argent, 1inch, and The Graph. Historically the team also invested in Tagomi, Bitstamp, Bitcoin, Ethereum, Supermetrics, Thimble, Bitrise, Wagestream, Citymapper, Tray.io, Pusher, Modulr, Codat, Shazam, Raisin, PPRO, Tink, (Transfer)Wise, iZettle, and many more incredible teams.