Do you need NFTs to engage sports fans?
Life is for learning, and when you stop, you stop living. I don’t think that anyone of note actually said this, but it is a mantra I stand by.
The weekend of the 16th and 17th July saw the first Metaverse Summit held in Paris, sponsored by The Sandbox and attended by some impressive industry heavyweights. Whilst some sat very much on the geek side of the line, there were enough on the business side to make it an interesting event. Chatting with the likes of Alien Worlds, Whalefin and Unstoppable Domains made me realise that the sports industry hasn’t fully grasped the potential of Web 3.0, gaming and the metaverse.
I thought then that I would distill some of the key takeaways into a short blog and relate it to our business, which is sport, and specifically how fan engagement could be achieved in the metaverse.
Firstly, it is important to differentiate the commercial side of sport with fan engagement.
A lot of the focus has been on NFTs and the commercial involvement of the crypto exchanges and platforms, who had cash to burn and came along at a perfect time for the rights holders’ commercial teams, beleaguered by diminishing traditional sponsorship revenues. Some wanted brand awareness by association, which makes sense, and others wanted a more tangible ROI, which came in the form of minting NFTs and expecting fans to buy them. And this is where the lines start to get a little blurred.
The Philippines has the world’s highest NFT forecasted adoption rate of 41%, according to this report, followed by Thailand with 34.5%. The high adoption of play-to-earn games in these countries has probably a lot to do with this high rate. The UK, in contrast, has a forecasted adoption rate of just 5.8%, yet NFT fan and other engagement tokens are promoted as the future. Doesn’t make a lot of sense to me.
Whilst you don’t need NFTs to gain fan engagement, understanding how Web 3.0, the metaverse and gaming works in this regard could be useful.
Therefore the question isn’t whether digital or metaverse fan adoption is the future, but more whether NFTs and fan tokens in their current format are required. A long time ago, we designed and launched affinity credit cards for football clubs, including Arsenal and Manchester United, and the utility built into those was more robust than in some of the fan tokens you see today.
Fans are still being engaged on a one-way, surface level with the rights holder determining the terms of engagement. Even though fan tokens purport to give the holder a say, I question whether it is worth the subscription fee.
When any new marketing platform is born, be it Web 1.0, 2.0 or 3.0, its proponents argue that it will change the way in which we communicate and engage with fans/customers. Whilst its methodology may have changed over time, the basics of communication have remained the same for millennia. If we make an emotional connection, we are likely to sell more than if we make a practical connection. The why, not the how or the what, to use Simon Sinek’s mantra.
If we want to engage fans in this new dawn of a Web 3.0 world, we must not lose sight of the basics of knowing your audience, understanding your differentiator and communicating with simplicity.
The issue that I have with the current thinking regards Web 3.0 fan engagement is that it fails on all three points. Whilst this is a new space, it still needs to be approached as a space to build loyalty first and monetise second. I feel that rights holders have misunderstood this loyalty and have gone straight to the monetisation creating fan disengagement.
Sport is changing from being entertaining to a form of entertainment and in doing so, its traditional fan base is being replaced. And whilst the basics of communication have not changed, the way in which we segment and reach these new audiences has to evolve. Just as rights holders adopted short form content and social media to reach millennials, they need to look at gaming and the metaverse to reach Gen Z and Alpha.
If we remove the commercial element and focus on fan engagement using both Web 2.0 and 3.0 tools, we can create a platform for authentic engagement. This is a world away from the current thinking around tokenisation and monetisation.