How Web3 is Unlocking Billions in New Revenue for Clubs & Brands

[upbeat music] Let's get started.

So I'm thrilled to have all of you here for today's session on the future of fan engagement, a topic that's rapidly evolving with teams, brands, leagues, experimenting, building pilots, building solutions that create actual revenue.

And today we're gonna explore what's being built with an amazing panel. I'm gonna introduce you shortly and look at, more importantly, how do those new solutions drive revenue for sport clubs and brands?

This is an interactive session, not just a panel discussion. We are streaming live on Zoom and on social media. For those of you who joined on Zoom, you'll find at the bottom of Zoom, um, a tab called Q&A.

Feel free to ask questions. Other participants will see your questions. They can upvote those questions, and at the end we'll do a Q&A where we talk about all those questions with, with the panelists.

We'll also have polls. That's another tab that you see at the bottom of Zoom. We'll launch a couple of polls. The first poll will be who are you?

And that helps us a lot to tailor our answers to the audience, and you'll see the first poll popping up now. Just vote, it's going on now, and we'll see the result, results shortly. So I'm incredibly honored

for this panel today with an all-star, all-star lineup, Michael Chalk from Smart Media Technologies, a leading on-chain activation company that works with top sport clubs and top brands. Mark Epps from the ATP Tour.

He's the Web3 and comms lead. You just did an amazing activation at the ATP finals last year, which we will be very excited to hear about. Then John Timony Gomes, he's the co-founder of UpTop.

UpTop built a next gen loyalty program with the Cleveland Cavaliers, an NBA team here in the US, and we'll be very, very interested to hear how you did that and what the results of that were.

We also have Robert Bryan, who will hopefully join any minute.

He's the founder of Karate Combat, a new professional sports league with millions of fans around the world that redefines fan participation and tokenized co-ownership with fans.

All right, so before we jump in, last thing from my side. Today's panel also coincides with the release of a new report on Web3 powered fan engagement that we're gonna release today.

All of you who attend, you will receive a copy just after this webinar with exclusive access, and we'll drop it soon to our full audience. All right, let's jump in.

We got 45 minutes packed with insights, case studies, and takeaways. Let's start with the speakers. Can you briefly introduce yourselves? Who are you? What are you doing in Web3? Mark first.

You were, you were first, first introduced. Great. Well, my name is Michael Chalk. I am the Chief Lu- Solutions Officer here at Smart Media Technology. We are a Web3 based loyalty and engagement company.

And what I personally love about this is I've spent my entire career in advertising, and Web3 brings the first opportunity to have opted-in, permission-based advertising for the s- brands and the sponsors that benefit the participants, the teams, the brands, all in an opt-in permission-based fashion.

We've seen absolutely phenomenal adoption across global entities, uh, in the banking sector, on global sports platforms like the IOC, and a lot of local sports teams as well, like, uh, across the NFL and FIFA.

So really excited to be here today, and thanks for having us. Hi, everyone, uh, I'm Mark Epps. I lead Web3 for the ATP Tour.

The ATP Tour is the global governing body of men's pro tennis, so 60 tournaments every year across 11 months and 30 countries, and, uh, all of your favorite tennis players from the world number one, right the way down through the rankings.

We started our Web3 journey two and a bit years ago now, really just identifying an opportunity to solve genuine business challenges with this technology.

The principal one that we are focused on is around fan identity, getting to know who our fan base is, what they like, how they consume the sport.

It underpins our entire business model, and to date we've been testing and learning. We've had a few drops. We've had some good successes, some learnings, and, uh, we've got very exciting things in the pipeline as well.

And, uh, hey, everyone, I'm John, one of the co-founders of UpTop. Uh, started the company three years ago after leaving PayPal, where I worked on launching a few of the digital asset products.

We saw a huge opportunity in branded wallets and kind of the ability to sort of capture value, store value, open up an environment for brands and fans to connect with one another directly.

And we found ourselves to the world of sports, where the opportunity is, is super large, very ripe and, and, you know, has the tailwinds of some of the most coveted intellectual property in the world, and just a lot of white space to build.

So really excited to be here. We can share more about how that's going. Thank you, all. Uh, that's an amazing lineup, and we'll jump into the use cases that you've built, uh, later on in the panel.

To open this, my first question, and we'll also highlight this in the report. Fan engagement is changing. Um, the future of sports is not just about what happens on the field, it what, what happens off the field.

It's about ca- capturing fan attention on every touch point. If I say sport teams and brands have relied on traditional loyalty programs, what are they getting wrong? What is your answer to that?

Maybe starting with Mark. What have you seen in your fan base, and how does, how did your fans change and, and what did you do to address that? I mean, starting, starting chunky here, Mark. Um,

I mean, I- I'm gonna start out by saying something maybe which this, this group will disagree with, but I actually think we should retire the term fan loyalty entirely.

For me, when you talk about loyalty, I always think of things that are fungible, you know? You need loyalty when you're talking about your supermarket or your gas station or your hotel, but for me, like,

the relationship that you have with your sport is not one that you can replace. You know, just 'cause you stop, you fall out of love with tennis doesn't mean you can replace it with a love for football. Like,

these things aren't fungible. So I would actually say let's retire the term loyalty, 'cause I don't think it quite applies. I don't have a better suggestion of what to call it.

Look, I, I think to, to zoom out, I think sports, the business model of sports has been very lucrative for a long time. We've seen, um, you know, broadcast media rights go up into the right for a long, long time.

The same as with sponsorships. And to a degree, I think sports haven't felt the need to disrupt themselves because business has been pretty good.

It's only really when you look 10 years out that you see some of the blind spots, potentially, and you see some of the ways in which verticals like gaming start eating our lunch. Because guess what?

They're actually better at knowing who their fans are and what they like.

You speak to most big sports, and I don't think this has been figured out really by most of them, and that's just me speaking frankly even about our, ourselves. Um, so we're learning.

You know, we're learning especially through this journey with Web3 that it's very much about firstly being honest where your shortfalls are from a fan experience point of view, and we know there are several in tennis.

But it's also about listening to what fans truly want.

Um, one of the things that we tapped into in The Drop, and we can talk about it more, more later, I always got the sense as a tennis fan that it's actually kind of a lonely experience, and that's very different to, like, following a sports team, right, where you're kind of part of a tribe.

When you're a tennis fan, you, you stay up till 2:00 in the morning to watch your favorite player, sometimes for years, and, you know, there's actually nothing that helps mark that moment and nothing that helps you feel connected with all the other millions of fans who are tuning in just at the same time as you.

That was just one little pocket of what I felt was lacking from the tennis fan experience that we plugged into on The Drop, and all I can say is that looking at the numbers and looking at the response we got from fans is we touched a nerve.

This is something that fans resonated with. So at a high level, I think sports are kinda guilty of n- not necessarily listening to their fans.

We talk a lot to them, but we don't, we don't often wait or hear what comes back from them. So, um, that's my broad view. And the good thing is it's, um, it's green space.

It's green space for us as brands to do some really cool things and engage fans in the same way that the tech companies do, the gaming companies do. That's, uh, that's what excites me.

I can add, you know, something there. It's, it is a shift, right? Like, we've, we've had so much data accumulation inside sophisticated companies that can, you know, really understand their customer.

You know, I think Mark is right. The appetite for sports has always kind of been a default, but the shift is starting.

There was data coming out where, you know, the Kings League was outperforming every other league besides the NFL on TikTok when they were in season.

So that means young people are watching honestly retired athletes and streamers, not the best athletes in the world, because they are just being met where they are.

You know, we've had conversations with sports teams that sort of believe they don't have a problem, right? Their season ticket holders renew every year. They have a lot of sponsor appetite.

But what happens when, you know, sponsors start asking questions about where their dollars are going, right? What, what, what is this marketing getting me? You know, how many impressions, how many conversions?

And oh, by the way, I can just go direct to a social media platform by advertising and actually see its performance.

And as these comp- these competitors come in who understand that, you could see sort of the cracks, right?

So, you know, I believe in the strongest IPs in the world, you know, traditional clubs, brands, cities, that have always supported their teams.

Uh, there's just a, a step they need to take to really start connecting digitally first with the long tail of fans that doesn't really feel as included as perhaps the, the season ticket holder.

100% agree with everything.

And, and, and digitally first, uh, not necessarily means that they start their social media channels, which they're widely successful, uh, by the way, so a lot of those sport clubs have hundreds of millions of fans on Instagram and, and Twitter and TikTok and all of that.

Uh, digitally means with, with other means, and we're, we're gonna talk about that later. Uh, Michael, you work with top sport brands. You also work with X Games.

What are some of the challenges those brands approach you with, and, and what do you solve for them? Yeah.

Uh, great question, and I, and I wanna just, uh, quickly touch on something that Mark said, because couldn't agree more, that loyalty is probably not the most fitting word for sports, because

you can't replace that, and I love the way that, that you phrased that. We think about these sports teams as not having a loyalty challenge, they have an engagement challenge.

'Cause you talk about these hundreds of millions of people on Instagram, but what does that actually mean? What is the value of that for a brand? What is the value of those for a sponsor?

And what we really focus on is saying, how do we actually bridge that connection through deeper engagement?

And we have a number of case studies that we're happy to share with anyone, feel free to DM me after, that show that throughout, uh, the journey of bringing deeper engagement, we see higher returns in spend.

And, you know, s- even a simple stat, like a, a consumer is so much more likely to tune into a live sporting event if they follow and have engaged with, uh, one of the professional athletes.

So seeing how consumption behavior has changed massively is where I think a lot of the big sports teams are missing it, because it is no longer a linear model where you s, you know, log on to ABC or you turn on ABC and it's on all day.

Consumers are engaging and consuming sports in much more smaller snippets than they have historically, and they don't have to stay up till 2:00 AM to watch that game because they can watch all the replays without,

um, you know, they can have a tailored menu of what they wanna eat anytime throughout the day.

So it's important that the technology helps facilitate that interaction and gives them those abilities to engage directly there.

Now, Mark, to, to answer your question around what some of the big brands are coming to us, and those big sports teams are coming, is saying, how do we help answer the question that, John, you brought up?

CMOs are investing millions and millions and millions of dollars into these sports sponsorships and saying, how do we start actually showing monetization back in a direct one-to-one digital ecosystem where they expect a dollar into Meta is $5 out in revenue?

How do they start measuring that in a sports sponsorship? And that is a big challenge that we bring for a lot of our brands.

Um, we partnered with the IOC over the last Olympic Games, and we were able to show for some of the, the sponsors the incredible ability to integrate AI solutions to customize a badge for the consumer's favorite sport and brand and build them an AI-powered badge that a consumer could take back as a memorabilia from that moment.

So Mark, exactly what you said there about, right, how do you kind of own that time and you build that deeper engagement within it? So those are some of the, the big challenges. Yeah. It's really cool.

And o- of course, we just talked about it. I- I mean, some of those clubs have hundreds of millions of fans.

What's being said a lot is that if they just monetize those fans, if they just had access to, instead of 1% that go to those live events or 5% who they have the emails of, to 50% of those fans and can interact with them and start engaging them.

Yeah. So that's the obvious big revenue opportunity. My question to you, all of you is, do you see that as well? Is that true? And if yes, how did you achieve that w- with your activations? What was...

What were the KPIs you focused on, and what were, what's the revenue that you drove for those brands you worked with? Yeah.

If I can just jump in off the top of that, I think there is a direct relationship here between two emerging trends we're seeing.

So the first is ownership of consumer data, and this has become a really, really large thing, especially within the current US political ecosystem in that Meta is owning all of this fandom data, and the brands don't necessarily have access to their fans' declared information.

So that is one big problem that we're seeing both, again, on, on for the big brands are coming to say, "Hey, I don't actually... You don't actually own NFL, all of your NFL fans on, that are on Instagram."

So our solution here is saying, how do we build that relationship directly between the brand and the fan or the NFL team and the club and the fan so that they can start participating in the monetization of, to your point, 1% more, 2% more of those Instagram fans that may or may not ever see a post from, um, their favorite club.

So bringing that connection more closely and doing it in an opt-in way, which is one of the great things that, you know, Web3 provides is this consent framework for this, for a consumer to say, "I am such a big fan.

I am happy to share all of this personalized information with this club so that I can potentially get access to tickets a day before the general populace." Yeah, spot on.

I think, I think you, you mentioned it a couple times, this opt-in nature, like that really is critical, right? Like use- users are savvy now.

Like you, you cruise the internet and you know there's, there's no reason to give up your data unless you're getting something in return. Like 20% of people accept cookies. The other 80% either say no or ignore them.

That's, that's the reason. So I think you're ac- absolutely spot on on that.

To, to your point about revenue growth, I mean, you know, we, we know, we know as a sport that we're far behind, especially some of the big American sports when it comes to monetization.

These, these numbers are maybe a couple of years old, but when we last looked at it, the NFL does something like $18 of revenue per fan in annual revenue. Golf is around $3. Tennis is less than $1.

So it shows us that even within the sports landscape, we have a long, long way to grow. Um, for us, our sort of journey in Web3 has never been about direct monetization.

We, we think there are more important things to tackle first. I've talked about Fan ID. That's really what we are laser focused on. We're not here to, you know, cash big checks or extract money from our users.

We believe that comes, and it comes for all the reasons we've talked about, like if we can turn around to our 15 commercial partners and say like the quality of the data that we have

pr- has a provable ROI for your sponsorship spend, we believe like we'll benefit from that financially further down the line. For us, it's never been about, uh, the here and now. It's, it's longer term. Yeah.

And, and c- can you expand on that a bit, Mark? Uh, what, what does, what, what do you mean by Fan Idea, ID, and what do you mean by chasing data? How, how, how did you do that?

And maybe you can explain a little bit how you launched the momentum activation at the- Yeah... ATP finals last year. So I, I, I always say that like when we talk about, when we talk about Fan ID,

sports really has to get the basics right. And I'm talking even at the simplest level as like what is a fan's email address?

Like for you work in tech, you work in gaming, you think, oh, this, this was new like 20 years ago. Like for sports, this is still, this is still the foundation.

So we launched this proof of concept in November last year called Momentum with a principal focus... Sorry, guys. Give me two seconds. All right. Happy, happy to jump in- Yeah... while he's, uh,

while he's dealing with that. Uh, y- yeah, so, so,

um, I think, you know, what Michael said is basically what we believe at UpTop, which is that the future sort of fandom is, and, and marketing is direct to wallet, right? And that means a lot of things.

It means identity. It means sort of transactability. Store of funds can be in a wallet. Your identity can be in wallet and your data, right? So back to Mark for that for finishing up the data point.

Sor- sorry for bailing. I had a, a crying baby. It sounded like something important. No, so Momentum, this was a, this was a project we launched in November last year. It was an eight-day proof of concept. Very simple.

It was matchday collectibles, 24-hour time-gated, basically a receipt that you showed up.

And we wanted to prove can we onboard fans, can we engage them, and at the end of it, could we see if they had a higher propensity to buy product than if they hadn't been through it?

I'm happy to say that the project went super well. You know, we onboarded 75,000 fans in, uh, in eight days. We saw three-quarters of a million NFTs claimed in that time.

And at the end of it all, I was able to turn around internally and say, "Hey, we grew our known addressable database," so this is the database of fans we have emails of [laughs], "by 25% in eight days.

And, uh, we did so using NFTs." So that raised a lot of, raised a lot of eyebrows. It showed the, the scalability of this, of this tech, the ability that it has to engage fans. Um,

and in terms of Fan ID, like we have this, we have this very fragmented ecosystem, right? Like tennis itself is very broad. There's different stakeholders.

There's the majors, there's the two tours, then you have this whole cohort of other IP, right? You have, gosh, 300, 400 different commercial brands across those entities.

You then have the players and all of their brands. There is no reason that tech like this shouldn't enable really rich experiences in that ecosystem.

Why should I as a diehard tennis fan who's watched 100 matches this year not show up to lacoste.com and be seen and recognized for it? Could be anything, right? It could be a discount. It could be a special product.

It could be I go to emirates.com and I get my loyalty matched. Whatever. Like, there's value in that, right?

There's value for these brands in being able to look at this whole space of tennis fans, identify who's core, how they inter- engage with the sport.

So that's what I talk about when I mean Fan ID, a persistent identity that you take with you, it's basically your wallet, that tracks everything that you do as a tennis fan.

And why do the, do fans invite us to track them? Because it gives them something in return, to the point earlier. And just to follow up on that, Mark, how valuable is that data for your partners?

I think it's hugely valuable. Um, I, I sometimes, I sometimes laugh when I see the, um, the sponsorship valuation reports that are k- that are standard in the industry.

You know, you get these giant figures based on basically logo signage on a court and how many minutes and how many eyeballs, and the, the number ends up being in the trillions 'cause it's, it's quite an interesting way to, to calculate that.

I think it is interesting, but I also think it will become more relevant for these brands. Um, as I, as I was alluding to earlier, sport still has this halo effect, you know?

There are still brands out there who want to be associated with tennis or sport because it's glamorous or it's their favorite sport or they love it or it's a passion point.

Sometimes we're not the most numbers-driven industry, and that's a really good position to be in, right?

'Cause we've got the halo effect that many brands want, but we lack some of the sort of more scientific data-led stuff. So it's becoming, it's becoming more important, I would say.

Uh, and I think in five years from now, like not being able to deliver a brand this kind of data, it's, it's gonna become a must-have, not a nice-to-have. That's my view.

So let's jump in, into what you built, Charm, with the Cleveland Cavaliers. That's a very interesting case study because you also published some of the KPIs, and they're very good.

What did you do with the Cleveland Cavaliers? What was the problem you solved, and what, what was the result you got from that? Yeah.

So if you look at the kind of the most performant loyalty programs in industry today, right, they're, they're usually transaction based, right? So picture like a, an airline co-branded credit card.

And they're also, uh, I wouldn't say open loop in the Web3 sense, but they're open loop in the sense that over many, many years they've built a lot of integrated partnerships, right?

So what, what that means is if I am someone who flies on Delta, I may use their loyalty program. I may be able to learn miles with the airline, but also with a partner like, I think they just switched from Lyft to Uber.

That was in the news. So you can earn, you know, miles there. You can earn miles at Starbucks. These are all bilateral integrations that are built out over many months, if not years, of partnership with brands.

And what that can do is it creates a really nice, a really nice set of affinity opportunities that go beyond your direct interaction with the, with the airline, but it also, it's a profit engine.

So airlines are able to, for example, issue miles at close to one cent a mile and, and, and then monetize them at two cents, right?

So it's, it's actually the most profitable thing that they do and accounts for, uh, the entire market cap, if not more, of the business. Um,

you know, the Cleveland Cavaliers were l- were studying the best loyalty models in industry, and so they, they were looking at, you know, companies like Delta, like Starbucks, like Sephora, that manage to really enhance customer relationships.

And then they poked around what, what existed for, for, for fandom, for, for sports specifically, and there wasn't much, right? Uh, the options that they saw were typically discounting driven.

So, you know, you have a fan, they show up. If they're a season ticket holder, maybe they get a discount or a freebie. And that just, first of all, it doesn't capture the long tail.

It really focuses on a small cohort of fans, but it also struggles to sort of provide attribution, right?

They didn't actually know if those fans that showed up would've bought a jersey anyway or would've, you know, consumed concessions, right?

So why discount for the sake of discounting, especially among your most engaged au- audience? So we had been building loyalty programs across industries and, and really understood this model.

So we, you know, we had the opportunity to talk to them. They were looking for something like this that could engage- You know, their fans, but also their sponsors. So we built a wallet essentially to support that.

So we're one of the only open loops wallets in professional sports where sponsors are already integrated. So there are 12, uh,

partners today, and we're adding, you know, many more throughout the, the year, that are Cavs points earning locations, and that's on top of the venue, on top of the concessions operation, on top of the team shop.

You earn, as a Cavs fan, Cavs points with spend with the organa- organization, but also spend at partners. So that basically makes loyalty and rewards a sponsorable opportunity that gives direct attribution for spend.

And we're seeing some really, really interesting data. The Cavs have a grocery partner. It's an exclusive grocery partner.

We're seeing double-digit percentage increase in spend at that grocery store among enrolled fans, and that's because they've literally dropped every third visit that they went to Costco or Trader Joe's to go to the, to the, the partner location.

So that's how powerful fandom is, and, uh, we're seeing the results.

It's a little bit of a different take than Mark collecting what I would call golden records, like, you know, real identity-based things like your email or, or your age, um, throughout the kind of sign-up processes.

We're also directly monetizing today, so we're selling, um, this as a sponsorable asset to brands. Um, so that's what we've built and, and we're growing it.

Who knew that, uh, demand for groceries was, was elastic like that? So kudos to you guys. You're doing something right. Yeah. It... We were, we were genuinely surprised. It's... I think it's a substitution effect, right?

If you went to two grocery stores for specific things and now you're getting rewarded in this way. Gas stations have co-brand credit cards that, that do this.

But we're, we're taking an approach that looks more like some of what Michael was saying.

And, and, you know, Mark, it's not your direct purview as, you know, tennis is split between the majors and the ATP, but the presale access that's done today for the US Open here in New York, um, you know, depends on what credit card you have.

So it's a, it's a, it's a huge marketing opportunity for Amex, and I know people who are huge fans, that they will use an Amex because of this tent-pole moment, right? The, the US Open.

So we are sort of recreating that for every fan. We're making the wallet very easy to onboard to so it doesn't require a specific spend method. It doesn't require a digital asset private key.

Um, we just make it seamlessly accessible, social auth, and, uh, and you're in.

Uh, unless I'm misquoting you, uh, I mean, I think when you guys, when we spoke like 18 months ago, one of the things, and I, I don't think you explicitly mentioned it, but, like, your program requires a fan to link their credit card, and that's it, right?

Like, you go, like you go around and you spend as normal and it accrues Cavs points. Right. Yeah. Like the first time you told me that, I, I thought you were lying. So, like, that sounds... [laughs] That's incredible.

Um- Yeah. It's working well. Um, it's, it's very easy. You know, the industry's maturing both Web 2.0 open banking solutions and Web 3.0 digital asset support. Um, that's both...

We use both technologies in, in, uh, Cavs rewards. And yeah, it's, it's, it's working really nicely. So that, that partner integration is around data, right? And data consents is, is super important. Yeah.

I love something, John, that you said that I think is one of the big foundations that's driving adoption for across our platform as well is this frictionless experience.

The consumers today have such ease of access to whatever they want that if there's an extra click, they might choose a different solution.

We've spent a huge amount of time saying, "How can we create the most frictionless experience so that a user can onboard, you know, from a social media ad, from a QR code scan that is potentially, you know, behind an athlete when they're, uh, when they're playing tennis, scan that, bring it on, and then rather seeing that Mercedes logo, they're now brought into the tennis wallet and they can have a custom Mercedes moment?

Right. But then beyond all of this is saying how do we actually not lock a fan into one specific payout so that they're earning a, you know, a potentially

branded token that can be redeemed across anyone in the ecosystem? And that's really the future that we're looking for, is that what we see as one of the big failures is people don't spend within their loyalty programs.

The redemption rate is very low on, hey, how many points do I have at, or from airlines at my local city market? That doesn't really influence my buying behavior.

But if I knew that the dollars that I spent at that local supermarket could help me get a better opportunity to maybe be on the field with an athlete because of these, you know, co-loyalty programs and this open token, that's, uh, that's really the future that we're pushing for.

Yeah. We've, we've fis- fulfilled 750, uh, things like that since the start of the season. So fans who've directed their spend, you know, have been able to watch warm-ups courtside. They've had meet and greets.

You know, we have things like, um, you know, a dinner with Cavs legends. So really, really unique experiences.

Money can't buy that kind of stuff, and it's fully branded and white labeled Cavs so that way it's not really in your face marketing, right?

You know, nothing takes you out of, out of the game, so to speak, like, you know, all the plastering of, of advertisements and logos in your face.

This is a, this is like a passive behavioral shift that we're driving for brands, and it's really about your affinity to the club. Absolutely.

And, and that open ecosystem is also possible because you use blockchain, you use wallets. You, you mentioned it before, wallets. Maybe some people don't, don't know this term, but it doesn't matter here.

But what matters is what's the data you get on those wallets, and why does that make it possible that you can suddenly integrate all those partners on one platform?

Yeah, so today we're, we're just doing badging, similar to what Mark and Michael do. But it, you know, it's tied to basically your status and y- and y- and your proof of engagement.

So it's really like a proof of fandom point, and that's what, what's creating a, a fan graph essentially. We, we have a fan graph.

It's, it's, it's something that could be essentially leveraged by brand partners, by the organization itself in a way that doesn't require tech integration. I think, you know, people love these teams.

They see them as, as forward-thinking, but much like, uh, you know, Mark was sharing, there are a lot of basics that need to be done, uh, in these rights holder businesses, right? They aren't tech companies first.

They're rights owners first. Um, so, you know, being able to do this on behalf of an IP is, is something that's very welcome, right?

And there's a lot of zero to one work that needs to be done to basically deliver this, this direct-to-fan sort of connectivity. It all hearkens back to what Michael was saying about meta.

You're at the mercy of an algorithm which isn't your algorithm. I, I've nothing against the algo, right? Like, you know, data science is a very powerful tool, some call it AI now.

But at the end of the day, if it's not yours, you know, you can't really control the outcomes. So you could make a social post for Sprite, and it's not gonna rank, right, that day. Yeah.

I'm cur- I'm curious to know from, from both of you actually, like you obviously work on the o- you're, you're on the tech side, I'm on the IP side. But like,

what have been, what have been the success factors in you guys winning those collaborations and winning those partnerships? Was it an internal champion who was very important? Was it an education process?

I'd love to know, like, what led to the, what led to the suc- success that you've enjoyed with these, with these IPs? Yeah, I mean, I can, I can jump in there first.

I think one of the big trends driving this is the, the hope for monetization and the understanding of the rapidly shifting consumer understanding of how valuable their data is.

So a lot of the organizations that we work with, uh, you know, one of our large CPG clients, every company that they acquire has a completely different infrastructure, and they don't know if someone eats this chip, drinks this drink.

And the ability for a platform like ours to come in and unify all those golden records so that now we c- start seeing those cross affinities and can create personalization for that consumer.

So I'd say that is definitely one of the biggest factors. And the second is a seamless ecosystem for engagement, that right now are you messaging them on Facebook? Are you emailing them? Are you texting them? How...

Like, is there so many fractured ways to engage with consumer?

How do we provide one singular way that is owned by the brand, that is brand safe, that they can fully control, and that rewards people for directly engaging rather than doing it through a third party like Meta?

Yeah, I think that's totally right. You know, just echoing that, you know, technology complexity note. When I was

at PayPal, I was in the Venmo business unit for some time, and interoperability between Venmo and PayPal was a big goal. You know, how do you move balances between one and the other?

But it was a company that had been acquired, so it actually just never got off the ground. It was a very technically complex thing to solve.

The first time you could move money from PayPal to Venmo was actually when PayPal launched the US dollar stablecoin, PYUSD. So they leveraged a digital asset to just get around their own way, right?

Get out of their own way, and leverage kind of, you know, this open platform. So yeah, I mean, but in terms of your question, Mark E., I think you have to make the pie bigger, right? So we're a startup. We need to grow.

We need to convince people that our vision of the future matters, right? So the easiest way to do that is to show an incentive mechanism that will sort of manifest in new value, right?

So we, we, we could com- try and compete with the legacy vendors in the space on, oh, we do this, we do that, we do that other thing. We have all the bells and whistles, but that's really never gonna work, right?

They're entrenched. Uh, you require a change in behavior. You require a break in relationships, right? Who knows who, you know, what kind of relationship there is between any vendor and their, and their customer.

So the, the easiest way to do that is to make the pie bigger, and that's our proposition in, in sports sponsorships is there's a channel that you're not using, it's direct to wallet, and we can bring it to you, and we can monetize it in year one.

All right. We, we only have a couple of minutes left before we jump to the Q&A, and I would like to ask you all the, the last question.

Before we do that, the second poll, that's about the challenges that you see and the technologies that you're most excited about, you'll see it popping up now. So my last question,

if you were advising sport brands, entertainment brands today, either as an IP leader or as a solution provider, what were some of your biggest learnings that you had over the past couple of years?

You've all been in the space for a while now. You, you've been building those solutions for a while. You, you, you, uh, created projects and pilots.

What were y- your biggest learnings or what did you do wrong and, and can you expand a little bit on that?

I'm happy to, to lead this off as well because I think it, it applies a- across a lot of, I'm guessing it's gonna be echoed across, uh, the panel. But one of the big things was Web3 can't be the why.

Web3 for us had to be the how, and that was a big learning for us because it was especially during, you know, the rise of the NFT and all the craze.

We're like, "We can do this, and we can do that," and realizing, one, how antagonistic even the term NFT can still be within marketing firms and sports, and saying, "Hey, you know what?

Most people don't understand how your data's even being processed within Meta. Most people don't understand what those algos look like. We need to be able to provide a seamless outcome."

The Web3 can be the why that does this, that allows for permission opted in, that allows for the transfer of data and the easy integrations, but it doesn't have to be the surface level of, um, why we're doing it.

So I'd say that was one of our big learnings. Like that. Fully agree. Gosh, there's been a lot of learnings.

I mean, we're, we're a few drops in, and I'm happy to say we had a, we've had a couple of very big successes, and we had one in the middle there that definitely wasn't. So we've seen, we've seen the failures as well.

Uh, my, my advice is not gonna be particularly novel or profound. Number one thing I always come back to is just simplicity. Simplicity of execution, simplicity of comms, simplicity of concept,

simplicity of even the stakeholders you work with. You know, pro- projects in this space tend to involve a lot of different parties, IPs, tech, creative houses. Like,

try, try your level best to just simplify everything at every stage. That has only ever served me.

Um, the second one, which is, which is really fun actually, is I think the space requires you to build in a slightly different way.

Especially big IPs, big brands, you know, you sit in a room, you hypothesize, you build a product, you put it out there.

You end up building these kind of monolithic, it could be anything, a fantasy product, whatever, but, like, th- they're built with very little community feedback.

And actually, that's what we had a lot of fun with on our previous drop. Like, in the weeks and months leading up to it, we were on Reddit, kind of covert,

you know, sharing our designs, sharing our concept, and getting real-time community feedback and, and iterating off that.

And that is the number one thing we're gonna focus on going forward is, like, involve the fans in building this thing. I mean, tech companies do it all the time. For sports, it's very, very alien. It's very,

um, I would say uncomfortable because we're not used to-- we see that as a big risk. Um, but definitely if, I think if you want to build a product that resonates with fans, you have to involve them in the building of it.

Um, so that was a big learning for me. Yeah, definitely. Listen to your customer, right? We can't be a solution in search of a problem. We just, you know, you know, and, uh, our company definitely went through that.

You know, I saw Josh popped in a question there, and, and I'm sure we'll get to some of these things.

We had some of the best, you know, self-service minting infrastructure, and we were a very engineering-forward team, and we were like, you know, we were telling brands,

you know, "Use us because we have the best technology," right? Um, and that was just a, a very poor sort of posture to take. It didn't focus on, on problems.

And there were crazy things happening when we started our company.

We're-- we, we knew that this was going to be a technology that mattered, but we saw a lot of crazy speculative behavior happening in NFTs and, and tokens. And we were like, "No, this is about data.

This is about connectivity. This is about reach. This is about value." But we still weren't solving a problem at the time. We were- we- we- we were just building great tech.

Um, and then we started to listen more than, than speak, and we arrived at solutions that really enhance value for our customers. So that's what we're, we're excited about. It, it- Yeah...

it's just massively unifying and energizing when you find, when you find that problem that is core to basically everybody at your business. Like,

last year when I turned around and I say, "Hey, we're launching this thing in November that's gonna help us know our fans better," that helps me. It helps the commercial team, digital, social.

I mean, there's no, there's no organization, there's no department at ATP that this doesn't benefit.

And as a result, like, the groundswell of support internally and, like, hands on deck that we had because of that was incredible.

Very different if you turn around and say, "Oh, we're doing a cool digital innovation play using NFTs." So yeah, being, being a solution in search of a problem is, is not where you wanna be. Fully, uh- Yeah...

resonate with that. I definitely agree, and we also now see in the poll, um, a lot of people answered monetizing engagement is their biggest problem, almost 50%, uh, of the people.

Second one is finding the right tech stack. Um, so monetization is certainly, uh, uh, an issue, uh, or an opportunity. And new revenue streams, you, you said it at the beginning, Mark, uh, more data.

Um, that's also, uh, a big topic. And now before we, we end this webinar, I would like to jump into some of the questions we have from the audience.

That I highlighted here is from Maya Vucinovic, "How do you see interoperability playing a role in the future of fan engagement?

Will fans be able to use their rewards tokens or digital collectibles across multiple ecosystems?" And maybe that's one for you, John. Yeah. Yeah, totally. Mark mentioned one of the first use cases, right?

Which is, like, sort of wallet adaptive. You mentioned, I think, Lacoste. Why, you know, Lacoste is so entrenched in tennis as a sponsor. It's, it's, it's almost pervasive, right? If you're a tennis fan.

I think I'm probably a monetized tennis fan, Mark. Uh, just wanted to tell you that. Maybe I was owed a dollar a year. You know, that, I bet you if you search your database, you're not gonna find me, right?

Uh, so first is getting that data, then it's, like, having a brand, third-party brand like Lacoste being able to recognize that data in a sort of shareable consent-driven way. I should...

You know, the future of e-commerce is completely gonna adapt to the, to your identity and, and to your wallet. And so, you know, I think that will happen. And then, you know, direct-to-wallet marketing will also happen.

So, you know, this is something we've been saying since the beginning, we just didn't really know how to solve it in the, at, at the kind of inception of, of my company was, you know,

people are done reading their spam email. Like, that's just not gonna work, right? Years-- There's discounts sitting in your email right now.

There's really personalized offers based on all the history that, that, um, sort of a brand has with you, but it's just not a good consumer experience, right? It needs to be smart. It needs to surface at the right time.

So we have made a technology decision to always be tethered to the, the best interoperable stack, you know, at, at our, at our foundation. So that's what we do.

Yeah, and I would echo a lot of what, what John said here, is our goal is that we create a currency that is completely interoperable across anyone who's opted into the wallet so that we're meeting fans and consumers where they are.

Because, again, this idea of a frictionless environment and the power of choice of the consumer is so flash right now that it can be two-second focus here, two-second here, and giving consumers the ability to spend in the same way that they have their native behaviors is really our goal, that this becomes interoperable across anyone in the ecosystem.

All right. Uh, then we have another question from Josh Reed. Seems some brands and sport properties feel burned by the NFT craze and cash grab of '21, '22. Um, and, uh, uh, I, I would agree with that.

You know, at 51 we, we looked at all of those consumer projects and, and most of those projects didn't work.

Um, and now we see the first pilots, the first, um, activations coming out, uh, of the, uh, of the, of the lab and, and actually working. John, you have one. Michael, you're building on many. Mark, you just had one.

What do you think is still needed? L- let's say, uh, the discussion is over. We're not talking about NFTs anymore. We're not talking about Web3. We're talking about revenue data.

When is that future gonna be here when fans will all have their wallets and everything will be interoperable and rewards will be smart? How long is it gonna take, and what, what's needed to get there?

I, I- You guys are the technologists. You go for it. Okay. Yeah. I, I said I, I really think we're going to be very surprised in five years looking back, so that, that's what I would say.

It takes sort of almost, like, irrational persistence by, you know, builders who, who have faith. We, you know, as a company weathered a crazy up, a crazy down, uh, kind of just talking to, to, to customers.

And, um, when we realized that's what we needed to do, we started, you know, moving away from anything that was influenced by what the market is telling us today, right?

Because if we did what the market was telling us today, we'd completely get wrong what the world looks like in, in five years. So yeah, I mean, I think Josh's question, yeah, there was crazy activity. We, we, we even...

You know, I won't name names, but we even are in, in discussions with teams that had deals in place for digital asset-based solutions for tokens.

Whether or not, you know, a political landscape was appropriate for it or not, I don't think any of that really matters, right, uh, if you, if you can cut through and focus on problems.

So I don't think any of that had enduring utility for, for fans. Yeah. And so, um, we just, you know, almost put the blinders on to all of that and, you know, focused on the customer.

I have a slightly, slightly different approach in that we believe in... Like, we, we rode those same ups and downs, and everything in our marketing was Web3, Web3, NFTs, and saw how quickly that was not related.

I mean, the CEO of P&G said, "No NFT activations after, like, 2021." And there were these hard, fast rules in large organizations about how polarizing this is.

Across our 12, 13 million wallets that we have now, I'd say 90% of the wallet holders don't know that they are wallet holders. They are engaged into just a new mobile app that gives them a really seamless experience.

And this, uh, the next question was from the anonymous attendee where they asked about, you know, social channels and all of these dominant forms of consumption.

Our platform is built to be completely integrated into that.

So a user clicks on an Instagram ad, and they're driven out to our wallet solution that's fully branded, and the consumer may not know that they're actually signing up for a fully, um, enabled Web3 wallet.

It gives them the ability to drive right back to those social channels and really make sure that it meets them in their expectation of consumption habits.

And it's everything from, you know, bringing QR codes to out of home billboards that you're in Times Square, and there's a static billboard that you can scan a QR code, and now it's raining Cheetos in augmented reality all around you.

And the consumer's engaging in that experience in a Web3 wallet without knowing it. But they can take that Cheeto with them onto all of the other various activities that they're doing.

So really becomes merging consumers to where they are in their current behaviors and then giving them the ability to, you know, take their, their wallet and map it to their MetaMask wallet, and using that if there's a super Web3 loyalist.

All of that technology is there, giving the consumer the choice to engage in the Web3 if they want to, or they can sign in using their Google, like, their, you know, sign in with Google, sign in with Meta.

Just making the consumer or the technology easy for the consumer. Yeah. 100%. I, I think also these, these moments in time pass by without necessarily being, being recognized. Like,

what was the moment in time where, you know, phone calls stopped being your dominant way of reaching people, and actually you switched to, like, you know, WhatsApp calls? Was it... Like,

you don't remember it, but it j- it happened at some point, and now you don't even use your phone, right? Um, me, you know, I, uh- Yeah... I live in Portugal, very antiquated banking system here.

I send my m- I send myself money over crypto rails because it's five seconds instead of two days wait time. Like, I will never go back. And I just think, like, we're already on that path. Like, look at the numbers.

I mean, look at, look at Base, for example. I think they have 120 million odds active wallets already. Like, that's not an insignificant number. So, like, I would agree with you guys.

Like, I don't think it's as far away as we think. Once we reach that point, I don't think we'll notice it. And to your point, Michael, it's about adding real value and creating great experiences.

So long as we do that, I'm pretty confident this stuff is gonna be as integral to our world today as the internet currently is. That's my view. Right. That's, uh, that's a great ending word.

We're at, uh, the limit of our time here. Again, everyone who jo- joined and tuned in on all our channels, thank you for joining. A big, big thank you to the speakers, Mark, John, and Michael.

This was very, very informative. And then last thing, uh, if you wanna get the report, I just shared it in the chat. Subscribe for future report, and also, uh, download the current report here through the link.

You will receive an email after the event as well with a direct download button. And then also, um, a call-out to our partner and supporter who we work with very closely, Avalanche.

Uh, they built some top activations in the space. Thank you for making this possible. You will also find the link to reach out to their, to their team in the chat. All right. That's it.

Thanks again for joining, and, um, all the best in whatever you build and do. Thank you. Thank you. Thank you, Mark. Thank you, guys. Have a great day.