Hey, it’s Marc.

Consumer engagement is changing fast thanks to new tech and younger consumers. And brands need to adapt. 

Web3 technologies like blockchain, tokenization, gaming, and AI are enabling this transformation, letting brands boost engagement with cool stuff like phygital products, next-gen loyalty programs, community co-creation, or immersive experiences.

This shift is particularly evident in passion-driven sectors like sports fandom. Here, always-on, mobile-first, and participatory experiences are becoming the norm for digital native fans. 

New opportunities? You bet.

Today we’ll going to look at: 

• The rise of digital native consumers

• The transformation of brands

• The Future of fandom with Web3

Let’s dive in. 🦈

This article is published in collaboration with Tyler Moebius, CEO of SmartMedia Technologies.

The Rise of Digital Native Consumers

Next-gen consumers, particularly the younger generations, are always shopping, blending and experiencing multiple channels at once: social media, online platforms, in real life, on phones, laptops, and beyond. 

Next-gen consumers spend more time online than any other generation.

In the U.S., 38% of Gen Z spend over four hours a day on social media, and even more time consuming content or gaming. 

Let’s zoom in on gaming: 

• As of February 2022, Roblox, the most popular game among kids, had nearly 55M daily users. Minecraft has about 140M monthly active users, and Fortnite around 80M.

• If that isn’t enough: An average user spends around 2.6 hours on Roblox – every day!

• Brands either build in “owned” or “open” (e.g. Roblox) virtual worlds. Key players for owned worlds are Journee, ByondXR, Spatial, Obssess, Dreamwave, or Emperia.

• Over 80% of Interbrand’s Top 100 Global Brands have already launched immersive commerce experiences.

What does that tell us? Next-gen consumers value personalized, community-driven and gamified experiences.

This change is transformational. 

An area affected by that is sports entertainment, changing how these consumers consume sports: 

• Digital-native fans consume sports-related content outside of traditional match time cadences: 95% of fans interact with sports during the off-season.

• The live event is still central for most—71% of all fans say that live sporting events are their favorite type of sports content. However, this drops to only 58% for Gen Z and Millennial fans.

• Around half of Gen Z fans say they have used social media — either to read comments and opinions from others or to interact with others — while watching live events from home. 

• A third of engaged global sports fans aged 18 to 24 prefer watching clips or highlights of live games than watching matches in their entirety. 

Let’s look next at how brands are adapting. 

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The Transformation of Brands

Consumer engagement is becoming more personal, automated and participative. 

Let’s unpack this. 

User Participation and Communities

Ever more brands competing on ever more channels on an infinite amount of consumer mindspace. Brands are no longer static entities but have become "liquid" — omnipresent across a multitude of channels and platforms, engaging consumers wherever they are.

Meanwhile, social media allowed them to establish more direct consumer relationships and brand communities. 

This era of social media and community-led branding, termed "life after lifestyle" by Toby Shorin, signifies a move towards culture as a product, with tangible goods becoming secondary to the cultural and communal experiences brands foster. 

It also reflects consumer desires for connection, participation, and a sense of belonging within the brand ecosystem.

Why is this significant? 

It’s a shift from transactional to relational dynamics and transforms how brands connect with their audiences.

But here’s the catch: 

Social organic reach is dwindling. Algorithms prioritize paid advertising, making it harder for brands to effectively reach their audience without increasing their acquisition costs. 

Meanwhile, the traditional ad model that runs on “third-party cookies” is coming under pressure too.

Data Performance At Scale

In today’s Internet, giants like Google or Meta monetize user data collected through “third-party cookies”.

But cookies are dying: Apple and Google are phasing cookies out, and new regulation is making them harder to collect.

No more cookies means: No more ad-targeting, i.e. no more monetization of personal data through ads. 

This is why brands are desperately searching for new ways to establish direct customer relationships. 

Here, Web3 comes in. 

Now, a new pool of first-party data stored on the blockchain and in digital wallets allows brands to build more personalized customer profiles that open doors for more intimate and granular customer engagement. 

Soon, we’ll live in a world of hyper-personalization that utilizes detailed, real-time blockchain data and machine learning to create highly personalized and automated user experiences. 

Imagine being able to segment and target based on millions of users’ purchasing history in real-time. 

In 2018, Maja Vujinovic foresaw blockchain and tokens as an enabler for “programmable economies”, combining machine learning and smart contracts. She thinks that this will allow brands to develop many use cases that will make brand building more personal and automated and will lower acquisition costs.

We’re not there yet. Wallet data is still too limited, the amount of users using wallets is too low.

But we’ll get there.  

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The Future of Fandom with Web3

In sport, digital native fans are reshaping how they engage with content, demanding a more integrated, personalized, and interactive experience across various platforms. Let’s look at some stats: 

• Always-On Experience for Digital Natives: Digital native fans consistently engage with sports content beyond traditional match times, with 90% active during the off-season. They favor interaction through social media, mobile apps, and streaming devices. About half of Gen Z uses social media to engage during live events, and a third prefer watching clips or highlights over full matches.

• Mobile-first engagement: Mobile devices are central to how digital native fans interact with sports content. Many Gen Z fans discuss sports events in real-time via text and social media, with 47% routinely watching on dual screens. Connecting with athletes via social media is key to their sports experience.

• Personalization of fan experience: Personalizing the frequency, type, and delivery channel of content significantly enhances engagement and revenue – and fans are asking for it. 

• Phygital engagement: Digital natives are drawn to phygital (physical plus digital) experiences like VR, tokenized experiences, and gamified elements. Over 60% of Gen Z and Millennials are willing to pay for VR experiences from an athlete’s point of view. Around 40% are familiar with using NFTs and fan tokens, with 60% likely to purchase fan tokens, especially for perks like exclusive merchandise and interactive activities.

• Deeper engagement beyond matches: Younger fans demand more than just game watching; they want behind-the-scenes access to understand teams and athletes better. Approximately a third of Gen Z desires access to athlete POV and behind-the-scenes content, with 24% of them expecting content directly from athletes.

• Interoperability and competitive edge: Interoperability in sports content delivery provides a competitive edge, with most fans accessing sports through Over-The-Top (OTT) platforms, i.e. live streaming platforms, not traditional TV. Additionally, fans aged 16-34 follow the largest number of sports on average with 6.3, marginally higher than older generations, requiring sport brands to innovative content strategies to maintain their interest.

How does this change in behavior play out in real life?

A Real Life Example

Let’s do a short case study on how this next-gen fan engagement could look like.  

What’s in for fans

Jon is a dedicated sports fan. As he prepares to go to the stadium, Jon faces a choice: a traditional physical match day ticket or an NFT-activated ticket. He chooses the NFT ticket, influenced by his favorite sponsors who are running a giveaway competition where he can win exclusive prizes.

This digital ticket serves as more than just a gate pass—it's a portal to a range of engaging activities. Jon can participate in AR treasure hunts and challenges, trivia games about his team, climbing leaderboards, and earning points. These points can be redeem exclusive merchandise or unique experiences, available before, during, and after the match.

What’s in for brands

The value for Jon is clear and is equally beneficial for the brands and the clubs involved. For brands, Jon's active participation provides a wealth of data, offering deep insights into his preferences and behaviors through the unified fan ID.

This enables highly targeted marketing strategies and a more personalized fan experience. In the post-cookie world, where traditional digital tracking mechanisms falter, these NFT-based engagements offer brands a vital avenue to understand and connect with their audience.

What’s in for clubs

For clubs, this fan engagement strategy enhances their relationship with fans, turning game day into a comprehensive and continuous engagement experience.

This not only fosters greater fan loyalty but also opens up new revenue streams through enhanced sponsorship opportunities and merchandising.

The seamless integration of digital and physical experiences reduces operational friction for sponsors, ensuring more effective promotion execution and compliance with legal conditions.

So What?

As we embrace the rise of digital native consumers and the transformative shift in brand engagement, it is clear that the future holds opportunities for personalized, automated, and participatory consumer experiences.

Consumer and sport brands need to think more holistically about engaging their consumers than just dropping an NFT collection or jumping on hypes. 

The next frontier will be about smartly integrating technologies like blockchain, data, machine learning, smart contracts, and digital assets into holistic, gamified and personalized consumer experiences. 

Holistic means on multiple channels, at once, across the whole brand or fan ecosystems. 

Brands also need to become comfortable in giving value back to the users by letting them participate in the brand and value they help to create. 

That’s it for now. 

Talk soon

– Marc

PS: Learn more about SmartMedia Technologies here or reply to this email for a direct introduction.

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1  As the author, I maintain full editorial integrity and the views and insights expressed are my own, ensuring the content remains unbiased and authentic.