Can digital currencies help brands stand out in a competitive market?

Some industry observers say marketers can explore the opportunity of using crypto coins to woo customers and generate brand engagement

e4m by Shantanu David
Published: Apr 25, 2022 8:50 AM  | 5 min read
digital currencies

The interest in cryptocurrencies continues to grow with each passing day as the digital asset market continues to be driven by these crypto coins. Taking into account the growing popularity of cryptocurrencies, brands are using existing digital currencies like Bitcoin, Ethereum and others or launching their own digital currencies in an effort to woo customers in an increasingly competitive and crowded marketplace.

Shashank Lanjekar, Chief Strategy Officer, Taproot Dentsu, says this strategy is essentially an act of infusing interest in brands by being in tune with the times of crypto. Lanjekar believes that if this is done meaningfully and memorably, it should definitely generate short-term brand engagement pretty much like loyalty programs and reward points did decades back.

Shrenik Gandhi, Co-Founder and CEO, White Rivers Media, agrees with this assessment, saying, “While some brands are banking upon cryptocurrency to establish a unique authority and awareness in the digital arena, the legacy names are adopting it to elevate their involvement and purpose in consumers’ lives.”

Considering the currently sky-high rates that digital currencies are trading at, it makes more sense for some companies to launch their own tokens as a means of attracting customers and also increase brand name recognition at the same time.

For instance, Gandhi notes Facebook’s upcoming digital token project ‘Libra’ aims to empower billions of users, with or without a bank account, helping users to transact on the platform with ease. At the same time, the Indian short-video app Chingari’s token $GARI is already in use and directly empowers creators in the ecosystem to monetise their content on the platform.

All of this is made possible by the growing adoption of blockchain technology, which has also spurred interest in NFTs and even Web 3.0, the shiniest new emerging tech that has techies and marketers equally excited.

For Akshae Golekar, Co-Founder, Optiminastic Media, it is evident that immersive technology adds to the brand value. He says, “Given that Web 3.0 is in its infancy in India, brands know that the sooner they use the blockchain technology it utilizes, the better, and are therefore leveraging it to build a currency of their own. The democratic use of these coins on Web 3 makes sense, and brands are cognizant of how powerful this can become if they get involved early and the coin becomes popular.”

What remains to be seen, however, is whether brands are just employing digital currencies as a tool for social commerce or are they actually pivoting to adopt it in earnest. As Lanjekar says, “It’s definitely a utility for social commerce and a conversation point among the digitally hyperactive audiences who see this as a convertible currency as well as a transactional one. Whether this converts a transaction into a repetitive behaviour in favour of brands is something that we will need to observe over this period before we can form an opinion.”

However, there are definitely earlier examples of new systems being adopted that have now become commonplace. Lanjekar refers to reward points from credit card brands, which started out as a one-off and now are part and parcel of credit card usage. So much so that hotels, airlines and now even e-commerce brands push for its usage over other methods of payment.

He says, “The objective is repeat engagement (what we often misinterpret as loyalty, because for me, loyalty is what the consumer does without a tactical push) and branded digital currencies will find it relatively harder to get repeat transactions versus just enticing the consumer for the first time with the emotional excitement of novelty and the rational benefit of value. So my take is that even if it stays, it may end up just as basic an aspect of a brand as the reward points and loyalty programs of the yesteryears are today.”

Gandhi, while stressing it is early days yet, believes the potential is still enormous, saying, “At present, branded cryptocurrencies transcend the purpose of utility; they are now a means to innovation in brand experience – an idea with immense marketing value, a medium that offers the gift of anonymity, a channel that alleviates the risks of fraud, and a shining line that sets a brand apart from its competitors.”

He cites the case of Brave as an example: A web 3.0 alternative to traditional browsers, such as Chrome, Safari, and Firefox, Brave began to reward its users with Basic Attention Tokens (BAT) whenever they opted to view privacy-preserving ads, called “Brave Ads” on the platform. By the end of 2021, the platform had crossed 50 million monthly active users – a testimonial to the fact that users of Web 3.0 are seeking alternatives to the surveillance economy.

Ultimately, marketers believe that the immense potential of Blockchain remains to be fully unlocked in each space. With a new generation of customers who seek to stay engaged with the rest of the world, both virtually and physically, all that marketers see now are untapped, and even unexpected, opportunities.

Gandhi observes, “The recent surge in branded digital currencies is only a glimpse of the rising sun at the horizon of the cryptocurrency industry. Their mainstream acceptance on traditional payment platforms has just begun. The rise of Central Bank Digital Currencies (CBDCs) such as RBI’s upcoming Digital Rupee in 2022-23 will only drive enterprises and brands further to subsume many such currencies into their applications.”

He concludes, “At this point, it becomes critical to repeat (even if it is at the risk of being redundant) that as lucrative as the idea of branding one’s own cryptocurrency may be, the idea is to first find usefulness and benefits for the stakeholders involved, and then ensure that the move is sustainable in the long run as well.”

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