DAOs and Gen Z: marketing strategies for brand loyalty using Web3 and crypto – AdAge.com

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A new report on consumer perceptions toward brands builds a strong case for decentralized autonomous organizations (DAOs) as a marketing tool. The report, conducted by creative consultancy Long Dash, found that a majority of Gen Z and millennial consumers (63%) want more influence over how brands make their decisions.
In fact, 60% of this cohort said they would be interested in using company-issued crypto tokens in order to vote on decisions—a key component of DAOs. A DAO is a group that uses blockchain technology to deploy funds in an organized way. Members vote using governance tokens, which are typically cryptocurrencies native to that organization and accrue value over time, giving members a direct share in the group’s profits. 
Marketers have already begun to incorporate DAOs into their marketing in a variety of ways. Bud Light has partnered with and joined a DAO in order to expose its consumers to the Web3 environment, while L’Oréal’s NYX Professional Makeup created its own DAO for creators behind beauty-focused virtual avatars.
Long Dash’s report, which was derived from a survey conducted in May 2022 among 1,300 participants, may give brands more reason to experiment with DAOs since young consumers appear to be interested in the opportunities they afford. The findings herald the emergence of a concept Long Dash calls “consensus commerce,” in which brands invite consumers to take part in business decisions and earn rewards for their participation as co-owners.
Consensus commerce, according to Long Dash, follows the community-based model of commerce that is popular on social media platforms, wherein consumers engage with products via branded content, driving them to purchase. With consensus commerce, consumers can use the DAO structure to make decisions as a community for actual product creation—hence the emphasis on “consensus.”
“There is especially strong power and community where consumers actually feel like they have a stake in the product and in the brand, and if they do, they will engage,” said Kate Watts, CEO of Long Dash.
Blockchain technology plays a central role in DAOs, enabling secure voting procedures, transparent operations and trustworthy reward distribution. Gen Z and millennial consumers have shown serious interest in blockchains through the crypto space; the demographic accounts for 94% of all crypto buyers, per data from fintech company Stilt.
Older consumers appear to not be as interested in DAO tools. Just 34% of respondents ages 42-76 want more influence over brand decision-making, and 40% of this cohort expressed interest in using crypto-based governance tokens, according to Long Dash. Curiously, data from Stilt shows that Gen X spends more on crypto than any other generation, despite accounting for only 4.9% of all buyers.
Participating in a like-minded community is another area that young consumers desire, and could inform how brands integrate DAO tools into their loyalty programs.
Nearly three-quarters (71%) of Gen Zers and millennials want to feel more connected to communities that are related to their favorite companies. The most popular reason for this is a desire to interact with people over a shared interest. Perhaps most notable is that this craving even outweighs that for special benefits and deals that come with being a member of a company’s community (56% to 52%, respectively). 
The finding suggests that brands should consider taking their loyalty programs beyond mere gift-giving. Consumers may appreciate special promos, but their interest in connecting with other consumers working together to influence their favorite brands should not go overlooked.
“If you are a brand right now that is just creating a loyalty membership program that is only interested in building points to buy more, then you’re missing the boat. You’re missing the early signs,” said Watts.
In this article:
Asa Hiken is a technology reporter covering digital marketing, social media platforms and innovation. A graduate of Northwestern University, he joined Ad Age after writing for Marketing Dive, where he focused on the alcohol space and digital privacy.

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