If you're like the rest of us non-techie marketers, you might be having trouble wrapping your head around the concepts of cryptocurrency and NFTs.
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Well, Jeremiah Owyang is here to help.
The latest Marketing Smarts podcast features the entrepreneur, speaker, and analyst in a conversation that breaks down the concepts in the context of what Jeremiah refers to as the Web 3.0, where creators can make their own economies through platforms such as Rally and Substack.
And there's news for video game nerds: If you hoard in-game items such as weapons or clothing, you're already an NFT collector of sorts.
NOTE: This episode is all about digital currency, creator coins, and NFTs, so Jeremiah is offering a coindrop to 100 people who want to grab some of his digital creator coins—for free! Check it out here.
Listen to the entire show now from the link above, or download the mp3 and listen at your convenience. Of course, you can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode.
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"Marketing Smarts" theme music composed by Juanito Pascual of Signature Tones.
Matt Snodgrass: Welcome to another episode of the Marketing Smarts Podcast brought to you by MarketingProfs. I am excited to introduce Jeremiah Owyang.
Jeremiah, how are you?
Jeremiah Owyang: I am great.
Matt: We're going to talk about all kinds of cool stuff today. Sort of futuristic stuff, in fact. I was looking through your bio and reading about you over the last couple of weeks, as we first got introduced a few weeks ago. I really feel like you may be a bit of a time traveler, because it seems like you kind of know what's coming next, like you're really on the cutting edge and you know what tomorrow is going to bring, and the rest of us are just sort of riding your coattails. So, I really want to dig into some things here.
Before we do that, I have a little bit of a backstory here that I want to tell. Ann Handley, our chief content officer here at MarketingProfs, created her own creator coin several months ago. I read it in her newsletter, and we've talked briefly about it. I asked her to come on the podcast and talk about what that is and what that means and how she's using it. She was very blunt and said, "You know what? I am not the person you want to talk to. Jeremiah is the person you want to talk to. He introduced me to it, he got me involved in this, and he turned me onto this and talked me into doing this."
Jeremiah: "He roped me into it."
Matt: That's exactly it. So, I want to talk to you about this idea of the creator coin. Before we get there, though, I have three questions for you. The first one is what are you reading right now?
Jeremiah: You mean like a book or a podcast?
Matt: Podcast, audio book, on your Kindle, what are you consuming right now that you're loving?
Jeremiah: I listen to a lot of podcasts on Web 3.0 and cryptocurrency. I participate in many Twitter spaces and Clubhouse rooms where the information is real-time and fresh. The only way to stay on top of the latest trends is hearing it live. A book literally is too old.
Matt: How are you finding the whole Clubhouse experience? I've heard pros and cons, and I don't know what I think about it. How do you find that?
Jeremiah: You have to know the right people and subscribe to the right things. It's like the rest of social media, you have to find the signal and sweep away the rest. I was one of the first users. That's kind of the trend here, right? I was in the first batch, so I figured out who has the signal.
Matt: I've just sort of poked my toe into it and I feel like there's a lot of charlatans, a lot of snake oil salesmen, a lot of junk out there if you don't know what to look for. It's easy to get sucked into a lot of nonsense that's there.
Tell me what you're drinking right now. Maybe not right now as we're on the podcast, but in life. What's your drink du jour? Are you a coffee drinker, is there a special mixed drink that you like?
Jeremiah: I'm a coffee guy, for sure. Then I need to focus in and stop the jitters, so I shift to green tea. That's really where I'm at.
Matt: Nice. Final question, let's kick this off and get things rolling. What are you thinking about right now in terms of marketing, in terms of business, what's keeping you up at night?
Jeremiah: I'm trying to understand how the government is going to react to these new technologies. Governments feel threatened by Web 3.0 and other large organizations are unsure how to deal with it. That is what I'm thinking about. Whether it comes to regulation, taxes, and data, those are the things that I'm thinking about. Of course, that has significant impacts to marketers because they don't want to wade into the waters until those things are resolved.
Matt: I just saw a headline this morning. I can't remember it was from the Federal Reserve or who said it, but it basically said that crypto needs an adult in the room, like this is the Wild Wild West and anything goes. I'm going to go out on a limb here and say probably the majority of us listening to this podcast right now are not really deeply in that world. What's your overall takeaway right now, what should we be looking at and thinking about when it comes to crypto, the blockchain, the technology behind it as that applies to marketing and what we're doing on a day to day basis?
Jeremiah: It's starting to really increase in adoption. Last month, United States Congress announced that around 14% of Americans have cryptocurrency, which is a lot, but that's also a very small amount. It depends on how you want to look at it, but that's growing at a rapid pace.
It is here to stay. We see large institutions, such as corporations, swallowing it to add to their war chest. We see companies trying to obtain it and offer it, potentially for redeeming products, like Tesla. We see banks and large companies starting to grab it.
We're also seeing this rapid trend of social tokens, where Ann and I are focused, that celebrities and musicians and artists are starting to use it. Then we're also seeing the rise of NFTs like digital collectibles, which are access to premium economies and experiences. Just yesterday the NFL announced they will be launching theirs. In two days, the James Bond movie will have theirs. It's just really picking up with marketers.
Matt: I did not see the NFL release. What is it that they are releasing?
Jeremiah: There will be NFL digital collectible statues of the NFL brand. Also, and this is the big one, the NFL Players Association is on board as well, so we will see potentially digital rotating 3D busts of players that can be purchased and traded on different marketplaces like collectibles.
Frankly, NFL is late. The Olympics had theirs. Major League Baseball has had their stadium series, and of course, the big one, the NBA has had their top shots which is making millions in dollars from leftover video reels that are being sold for tens of thousands of dollars to fans.
So, it is pretty mainstream for marketers. Coca-Cola is in this space as well. I actually have a list on my blog, we can link to it later. The leading brands are already in this space. I think this is just starting to be a wake-up call for the consumer luxury and media brands. This is certainly on-trend.
Matt: Let's talk about creator coins.
Matt: This is what sort of pulled me down this rabbit hole. Ann sort of pulled me after you pulled her into this. Let's start from the beginning. What is a creator coin, how does it function, what does it do?
Jeremiah: Let's back up. Twenty years ago, if I said, "Matt, you should really make a website because that's how people are going to find you," you might have thought, "That's silly. There's nobody on the internet. Why would I do this?" No, you can become your own publishing platform. Okay. All right. You did it, so you were one of the first dot-commers. Great.
Ten years after that, I said, "We should really become our own media empires. We have ability to upload videos and to share our ideas, share articles, and pen our own articles on WordPress and YouTube. We can tweet, use LinkedIn, and connect to people rather than rely on centralized media institutions." We did that.
The next phase is here we are in Web 3.0, after Web 2.0, as you might naturally expect. In this case, the difference is the crowd, the people, those that are participating in the internet now own, they actually have the equity of the assets that they're creating. That's the big trend here. What we're seeing is that creators, which include musicians, artists, actors, athletes, writers like Ann, speakers and writers like myself, Jay Baer, David Berkowitz, some famous marketers, Dan Schawbel, Chris Brogan, Mitch Joel, Joe Pulizzi, they all have their own creator coins. We're all creators. The difference is rather than relying on a central institution to monetize like Facebook or LinkedIn, we can do it directly, we have a direct relationship with our fans.
The general thought about this creator coin movement and enabling us to use our own currency and even launch our own NFTs from these platforms like Rally, which is what Ann and I use, and I'm an advisor to that company, is three things. One is we want to be self-sovereign. I'm sure you've heard that at a whim the YouTube algorithm could change and YouTubers could lose their audience, if not their revenue. The second is we have a direct relationship with our fans, not relying on a third party. Three is we are free to move around. If we want to take our audience to Twitch video streaming or we want to do Streamyards, we can do that when we want, and the monetization should be able to stay directly with us without having to rely on a central institution.
The big push of this whole movement, Web 3.0, is that it's giving power to those who participate. Just like Web 2.0 gave power to those who created content, now we're seeing the power shifting in terms of economics. Is that a helpful metaphor?
Matt: It is. The thing that jumps to my mind is we want to be self-sovereign, we want to be free to move around, how do we do that? It seems like that creator coin is that how. Right?
Jeremiah: Yes. It is a way to do that. There are other methods, too. Some people have their Substack direct newsletters and there's Patreon as well. Creators should have multiple streams of revenue, not just be dependent on one. That's kind of the theme is this independence. So, creator coins as well. Let me give an example.
A few months ago, I was on Clubhouse and I had a brand that wanted to sponsor my rooms. I have a very large Club with many followers. I was able to use my coin to pay influencers to show up and participate with me. Also, the brand was able to use the coin and I could share it with the fans directly in there without using the monetization features from Clubhouse, because I could just drop a link or I could verbally say, "You can receive this coin from this location." The next day, I could go to Facebook and say, "I'm going to do a coin drop. I'm going to share my coin with you here. Also, you can purchase my coin, here's the link, and you can access my services," which could be attending a podcast or speaking at an event, or I could do a shout out, or I could rapidly respond to you, or maybe I could write an article if it's in my wheelhouse of coverage area. The next day, I could go to YouTube and say, "I'm launching an NFT," just like the NFL players are going to do, "You can purchase it with my creator coin." So, I have this option and this freedom to do those monetization methods anywhere I want.
You're probably wondering why don't you just use US Dollars and PayPal? Yes, those are options. But the amount of paperwork to complete that would slow down the transaction. When you use the Rally.io website, it can be very quick to use once you get the hang of it. Also, there are benefits to the coin holders, my fans.
What happens is every week, if the coin is doing well (and Ann's coin is doing fantastic, it's growing right now), there are rewards that are issued to those that own the coin. Those rewards grow in value and can be redeemed for other things as well. So, the fans are also winning as well. It's a very different economic model where the creators and the fans are growing at the same time and earning at the same time. Does that make sense?
Matt: It does. You mentioned a coin drop a few minutes ago. I'm curious if you could tell us what a coin drop is.
Jeremiah: Sure. A coin drop is when I would share my coin with a group of fans or a community so they could receive it for free. It's a giveaway. It's really to entice them to say you can access this and maybe if you'd like to purchase more to receive some of my products or services, or access my premium website or my premium livestreams or my premium Discord server, you can actually use the coin to access those things. Does that make sense?
Matt: It does. Can we think of these coins as we could buying a stock? Could I sell a coin and get a dollar value back at any point in time? How does the economy around that work?
Jeremiah: These are called utility tokens because you can access them for goods or services. That's really important that we differentiate it is not security.
For example, one of the music artists called Portugal the Man, you certainly know their songs if you don't know the name, they have their own private Discord server where community members and fans can go in, but it's coin-gated, you have to own around five of their coins. There's a software check, it goes through the Rally website and says, "Does Matt own these five coins? If so, allow him in." It's all done through the software. Once you arrive to that Discord server, you are in the backstage area hanging out with the other fans. You can access cool files, other music, sometimes the group comes in and does a jam or drops in extra files.
It's like the new fan club. That's all done if you own coin. In many ways, it's kind of like loyalty points that are accessing a premium. Think about the American Express lounges. You have to have a card, "membership has its perks." In many ways, we're seeing musicians, athletes, and others using these tools.
Matt: I buy these five coins. I'm very excited because I have this backstage experience, I can interact with the fans and maybe with Portugal the Man the band at different times. Five years from now or three years from now, whatever, a year from now, as I'm fickle and my music tastes change, I realize I'm past this and this music doesn't appeal to me anymore. I still hold those coins. Are they of any value to me? What do I do with those? Maybe I'm not interested in Ann Handley's writing anymore.
Jeremiah: Oh no. Don't say that.
Matt: Maybe I'm past the phase where Jeremiah's content is appealing to me. What happens at that point? Do they disappear, is there a degradation that happens, or how does that work?
Jeremiah: The price of the coin does change, and you have liquidity. You can change them out and swap them for the Rally token, which is real currency and you could export that to your coin based account, so it is truly currency. That is your option, you can do that at any time.
Matt: If I say I want to get rid of my Portugal the Man coins and I want to put more into Jeremiah's coins, is that an easy transfer to make happen?
Jeremiah: It sure is. It's called swap. You can swap that Portugal the Man coin into the master coin, which is called the Rally Token, and then from there you can swap into other creator coins. Maybe there's an NFL athlete or a UCLA basketball player that are doing this. Yes, you could swap it out.
Matt: Okay. The burning question that's on my mind is as a content creator, you, or me, or Ann, or Portugal the Man, or whoever it is, what is the value to you of having your own creator coin?
Jeremiah: The value is it's a new form of monetization that I can have. I have seen the price of my coin increase, which has been fantastic. I can take some of that and export it. It's called a bridge out, and I treat it as earned income through taxes. Because my coin value has grown, as well, people are purchasing and using it to access my services. I am starting to sell NFTs, which are like products, digital products, so I'm finding new ways to monetize. It's a new form of revenue.
Some of the creators in the Rally organization are very successful. For example, the Twitch streamers, in-gamers. You're a gamer, you shared with me. They are making significant revenues. It could be $10,000 per week.
Matt: Outside of any monetization that's going on through other platforms, just through Rally?
Jeremiah: Absolutely. Just from Rally. Also, again, the fans benefit as well. They're getting unique experiences directly from them and also the value of the coin may increase from some of those creators, and they're also receiving the rewards every week if that coin is growing. All of them win together, a collective win.
Matt: So, there are rewards that occur on weekly basis just by virtue of holding someone's coins?
Jeremiah: That is correct.
Matt: How does that work?
Jeremiah: This is the caveat; only if the coin is positively growing that last week versus the last four weeks average. There's a whole formula. It has to be accelerating. The economic model would not work if it was degrading. It's called Rally Rewards.
Matt: Those are just by virtue of holding these creator coins, as long as the coins are doing well you will earn these Rally Rewards.
Jeremiah: That's right. Then you can take that creator coin and you can exchange it for a product or service from that creator, so you have options as a fan to use those.
Going back to marketers, most influencers in the near years will have their own creator coin. Influence marketing groups need to prepare to transact with creators using these social tokens.
Matt: Is this something that is geared solely toward the individual or do you see that brands will be jumping on board? I know we've talked about some big brands like the NFL and MLB, but is this something that B-to-B marketing brands can get involved in?
Jeremiah: Right now, the social tokens have been more geared towards individuals or groups of individuals that are creators. Big brands are unlikely to launch, at this time, their own social token, because there's probably regulatory questions because it could be in conflict with a publicly-traded stock.
However, I think we might see the evolution of the existing loyalty program points from Macy's, Home Depot, American Express, or airlines. We might see them turn into very similar models that can be freely exchanged and traded on blockchain. I think that will happen, but I think it's too premature to mention any case studies.
Matt: I really wonder does this make sense for an up-and-coming influencer or marketer to get involved in, or do you have to have an audience first before you even start this process?
Jeremiah: There is a criteria set in which there's a review group that is comprised of employees at Rally, creators, and third party developers that review all of the applications. There's a number of criteria. One is that they have consistent content creation. Also, they likely have a following of around 50,000 people in their community that are engaging. If they don't engage, that's not going to help anybody. The most important one is they have a clear business model to offer products and services. It doesn't work unless you have a transaction. There have been some TikTok minor celebrities with 5,000,000 that have applied, but when you look at their engagement rate, people are not clicking or commenting, you can't get them to transact, so it wasn't a fit for them and didn't go forward.
Matt: I need to pause there because you called folks with 5,000,000 followers minor.
Jeremiah: In TikTok.
Matt: I think as marketers a lot of us will kill to have that sort of following for our brand and what we're doing.
Jeremiah: Well, TikTok is inflated. How many of those are actual real people is a whole other discussion. 5,000,000 Twitter followers is a Fortune 500 company on Twitter.
Matt: TikTok is a whole different beast, for sure.
Jeremiah: Very different.
Matt: One of the things that I'm curious about is what this means for me personally as a marketer. I'm looking at this, I'm seeing what you're doing, I'm seeing what Ann is doing, and I'm seeing what these influencers are doing. You mentioned that this is something that we need to start jumping on board with and getting our heads around this because this is going to be the way that we transact. This is already happening now.
Jeremiah: Yes, it's now.
Matt: Do you see that we're going to hit an inflection point where this explodes, or is this going to be one of these slow burns that we're seeing, or what's your thinking on that?
Jeremiah: I think it's a linear growth. I don't expect to see a huge spike. I don't think there's any instance that will cause it to spike. I do think that NFTs, which are part of this movement, and each creator, like Ann can actually turn her book covers into NFTs and sell them as items. I think NFTs will hit the mainstream and cause a lot of adoption first, especially around this coming holiday and the fact that the NFL is doing it, Disney and Marvel are doing it, and DC Comics.
I think that's the first stepstone is these digital collectibles that will then pull in social tokens. They're tied together because the way that you purchase those NFTs are through cryptocurrencies in most cases.
Matt: With the holiday season coming up, are you guessing that there's going to be a lot of gifting happening here?
Matt: Or is just things are going to be on sale and it's going to be the time to buy?
Jeremiah: There are a couple of trends here. The pandemic, people are less likely to want to see their family for obvious reasons, people are staying at home, so these could be wonderful digital gifts and goods.
For example, Disney is opening up their licensor portfolio of 3D animated objects and they've launched a number of Marvel characters as well as some comics on a platform called VeVe. People are purchasing them now and collecting them, and they're trading them for increased value, and they're generating revenue. In the holiday season, they'll likely launch thousands of lower cost ones, just as they always do every holiday season in order to attract consumers.
I think we'll see this December a real boom in NFTs from brands. Could we see Hallmark come on board with digital NFT cards that people can purchase and share with each other that perhaps could be redeemed in-store for some discounts later or have other perks to unique experiences online? I think those are all plausible.
Matt: Is there a value to an NFT outside the dollar value that we're talking about? You're talking about folks buying them and reselling them as the price goes up. I guess is there the emotional attachment? If you send me a card or you give me a gift, I have some emotional attachment to that physical thing because I know that it came from you, you thought about it, you picked it out, you created it or you wrote the card, whatever that is. I feel like from a gifting standpoint we lose a lot of that when we're essentially, not to dumb it down but, sending a picture of something to someone. Right?
Jeremiah: Yes. But it could also be a video or a 3D animation, or it could be access to a premium experience. All of those things can be unlocked by NFTs. It's not just silly photos of cats, crypto punks, or apes. There are other functionality pieces.
For example, imagine your nephew loves Hot Wheels. You could send them a Mattel NFT Hot Wheel of an actual car that actually exists. If your sister loves Dolce & Gabbana, you could send her some of the art which they launched. I think it's pretty expensive. You might love her a tremendous amount.
Matt: Maybe not that much.
Jeremiah: Perhaps. Those all exist. If you have your high school buddy that is really into Spider-Man, you could send him an NFT because you know he loves it. Those are some examples of that happening.
Matt: I'm going to be very blunt with you. That's still hard for me to get my brain around this whole digital currency. That's the weirdest thing because, as we mentioned, I'm a gamer and I've played video games for years, so I'm used to trading digital content.
Jeremiah: That is an NFT.
Matt: Yes. I'm used to paying for that in-game because it has a value and it allows me to do something. This idea of a 3D hologram bust of a sports player or of a car is, for some reason, really hard for me to get my brain around.
Jeremiah: Do you ever look at those items in your games and say, "Wow, I have a great collection."
Matt: I do. Yes. That's the irony of all this.
Jeremiah: You're already an NFT collector. You're already doing it.
Matt: I guess it's the context is what it is. In-game the context makes sense to me. Out in my "real life," it's harder for me to wrap my brain around.
Jeremiah: What we're going to see is that those items in the game that you collected will actually be available on the open web, on the blockchain eventually, so they will be traded or viewable in galleries outside of the game. We're starting to see those items are connecting through blockchain, so that movement is already starting to happen as well.
All of this, by the way, leads up to the bigger meta trend, which is all of this is preparing brands, influencers, communities, and fans for the metaverse, which is the virtual reality. People are purchasing these items to prepare for the assets and the real estate in those lands. That's a whole other podcast you guys should interview an expert on. Which is not me, by the way.
Matt: I feel like Second Life came about a decade too soon for its time.
Jeremiah: Two decades too soon.
Matt: You're right, it's been almost 20 years. Okay. I want to jump back to creator coins really quickly before we wrap things up here. I'm wondering, you have a coin, Ann has a coin, folks have these coins. How does this coin change in value? A stock changes in value based on market conditions and performance of a company. How does a creator coin change in value?
Jeremiah: That's a really great question. The Rally team has hired economists and they have crypto experts. They actually hire some of the best crypto economists, ex-Wall-Street folks, to actually figure this out. There's a hundred-page whitepaper with economic analysis on this. The way it's done, we're going to get really technical here, is called a token bonding curve. Essentially, it means that when a quantity of coins are purchased the price point increases by a certain Y amount, and it's a known quantity.
For example, Ann's coin is doing fantastic. The more people that buy it, it naturally goes up in value. Her coin is one of the highest coins right now, no surprise. It's at $11 per coin. There have been 138,000 coins purchased of hers, and she personally owns a large chunk of that. That has been very good for her, I'm assuming.
Matt: That's interesting. I certainly have to dig more into this. There's a lot here.
Jeremiah: There's a lot here. When Web 2.0 came around, everybody had to become media fluent. Now that we are in Web 3.0, everybody is going to become economic experts. We have no choice, because the economics are shifting to the individuals. We're starting to build our own economies. That's really the big trend here, individual micro-economies.
Matt: I like that a lot. I'm glad earlier on you talked about Patreon and Substack. I have several Patreons that I help support and I'm really fans of those. I don't think I ever connected those two things, Patreon and creator coins, but really it is just different sides of the same coin. No pun intended. I can't believe I said that.
Jeremiah: Yes. That's right. This trend of independence and sovereignty and being able to monetize separately, that's the bigger trend when you look at all of those tools together, rather than relying on the big tech startups like Facebook, LinkedIn, or Twitter. People are trying to pull away from that because it hasn't been favorable to those content creators.
Matt: You can get pulled down or shut off or blacklisted for any reason under the sun. If any bit of an algorithm changes, that can have a huge impact on your revenue, on your following, and on everything.
Jeremiah: That's right. It's not just those big tech platforms. A UCLA basketball player launched his own coin on Rally two weeks ago. They were not allowed to monetize up until this year. We're seeing music artists launching their own coin rather than solely depend upon Spotify or music labels. There's a big trend here of the self-sovereignty for many professionals and now the technologies are here to enable that, just like social media around 10 years ago.
Matt: Marketers, there is absolutely space for each and every one of you to create, to create content, to monetize this. Jeremiah, thank you so much for your time today. What an awesome conversation. I learned a lot and I have a million more questions that I need to dig into after this. Thank you so much for your time.
Jeremiah: You're welcome, Matt. Thank you.
Matt: If folks want to learn more about you and what you're doing and what you're writing about, where can they find you?
Jeremiah: Sure. You can find me on Twitter @JOwyang. Also, what we're going to do is provide a link in the show notes to a coin drop. I'm going to make 100 opportunities for people to grab my coin at no cost for you so that you can experience it and understand what it's all about.
Matt: Wow. That's fantastic. That's a great offering. Thank you very much.
Folks, we will have that link in the show notes when this episode goes live. Before we leave here, I have one favor to ask of each and every one of you. If you could do me a favor, find one person, one marketer, one coworker, someone in the cubicle next to you, tell them that you just listened to this great podcast with Matt and Jeremiah, tell them they need to check out the Marketing Smarts Podcast. We don't need a five-star review, we don't need you to write anything big. Just tell one person about this podcast to help spread the word.
Thanks, my friends. Until next episode, we'll see you later.
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Published on October 21, 2021
Jeremiah Owyang, entrepreneur, speaker, and analyst, and founding partner of boutique research and advisory firm Kaleido Insights. For more information, visit Jeremiah's Web strategy blog, and follow him on Twitter at @jowyang.
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