Advertising and marketing are at the center of the economy — but more often than not, existing practices can end up being grossly inefficient.
We speak to Alex Busarov, the co-founder and CEO at Taeltech and Wabi, about how their crypto-focused approach is transforming the way big brands perform marketing.
One platform that is using cryptocurrencies to deliver better results for big brands is Wabi. Here, co-founder and CEO Alex Busarov explains how its approach compares with traditional forms of marketing… and how consumers benefit.
- Hello! Can you tell us briefly what Wabi does?
Wabi is a unit of value exchange between brands and consumers, and it works like a supercharged loyalty point.
Consumers participating in our ecosystem get incentives in Wabi points, while brands get valuable understanding of consumers and the latest trends, making their marketing campaigns a lot more efficient. Consumers can then spend Wabi points on any of the thousands of products available through our ecosystem, ranging from Nestle infant formula to L'Oreal cosmetics and Shiseido skincare.
Effectively, Wabi taps into the $2 trillion a year that consumer brands spend on marketing.
- What's the tokenomics in that?
Currently, everyone in business is trying to mine consumer data without giving much back to the people. Sure, big tech companies often provide "free products" to consumers. But the ultimate purpose of these is to get consumer data that is later repackaged and resold for ad targeting at much higher premiums.
With Wabi, we are aiming to allow consumers to share in this data generation economy. We enable brands to engage consumers directly to generate various custom datasets with complete consent. This eliminates a lot of data intermediaries, making the system more efficient and transparent.
The tokenomics of the system is actually very simple. To generate new datasets, or incentivize consumers in any other way, brands acquire Wabi from the open market. Consumers redeem Wabi points against an ever-growing list of goods and services in our marketplace. Given that the number of consumers rises and that consumers never spend everything they receive at once, the total number of Wabi in circulation decreases — effectively making Wabi a deflationary token. And yes, the total number of Wabis available is fixed.
So far, over three million Wabi points are already being held by consumers. These are not crypto traders but people who use and engage with the ecosystem. Actually, it is about 80% women in over 500 cities.
- You recently announced your work with Japan's Ministry of Agriculture. Can you tell us more about that?
China is an exceedingly important market for Japanese manufacturers. Before COVID, a significant chunk of Japanese exports was actually done through Chinese tourists traveling to Japan en masse. With the COVID restrictions in place, a lot of small manufacturers in Japan have been severely hit. As a result, Japanese government is very active in looking for new export markets.
This particular project with the Ministry of Agriculture aims at establishing a cold-chain logistics channel for Japanese sake manufacturers. Sake sales have been booming in China for the past several years. Now the government is attempting to create a "sake culture" enabling the best produce to be shipped at a constant temperature, preserving original taste and texture.
This is a challenging project from technical and business perspectives. So there is actually an entire consortium of companies working to make it happen. Our role as a consortium member is consumer marketing, product feedback collection, consumer incentivization — essentially utilizing the entire Wabi infrastructure.
- Any other collaborations you'd like to mention?
We've done quite a lot! Participation in Walmart food safety innovation finals and the Mitsubishi UFJ Group bank accelerator gave us great exposure and valuable business contacts.
In parallel, we became one of three platforms that Rakuten sells through in China (JD.com and Kaola are the other two). That was a testimony to our model and opened many doors to Japanese brands in our early days.
Then even bigger things started to happen. Our partnership with the Odakyu department store (one of the biggest in Tokyo) is a fascinating one. Our ecosystem is effectively an extension of Odakyu experience for Chinese tourists to keep shopping after returning to China. Millions of Chinese tourists visit Japan every year so we expect the Odakyu partnership to be a major growth engine for the Wabi ecosystem when the COVID situation eases.
It is actually because of our established position with Japanese companies that we could get into the government-led consortium. Trust is slow to gain in Japan, but a lot of doors start to open once it is there.
More recently, we partnered with Exelprint (Australia). They print QR codes and other labels for a long list of prominent clients and this partnership enables us to add our Open consumer platform product into the mix. This is potential for step-change growth right there as these labels are typically printed well in the millions.
One of the most memorable involvements, though, was when we personally presented our early tech to China's Prime Minister Li Keqiang. It later helped us to get some grant financing from the government as well.
- How is Wabi different from other blockchain-focused supply chain solutions?
There is one major difference: Wabi is not a supply chain coin. We've become known in the crypto community with our NFC anti-counterfeiting solution, which led many people to think of us as a supply chain project.
From the outset, Wabi was created as an incentivization token to generate consumer participation. We needed enough people to authenticate the products because the early version of our anti-counterfeiting system required dynamic code change. Gradually, we realized that since we can incentivize people to scan, we can incentivize them to do a lot of other things. Given that we worked with larger corporations from the start, we could see a clear demand for custom-made datasets and rapid marketing research.
To be very honest, we have always been skeptical about supply chain coin tokenomics. They tend to go for corporations' IT budgets which are incomparable to marketing budgets that can reach up to 40% of sales.
Moreover, with Wabi, the openness of the system is required by design — in other words, the more brands participate in the ecosystem, the more ways people have to spend their points, the more willing they are to participate.
When it comes to supply chain management, we see that companies tend to prefer private systems that are much easier to deploy and manage.
- What impact does Wabi’s rewards program have on customer behavior?
It drastically increases consumer participation in all sorts of feedback generation activities, which is essential for agile marketing. Like the Basic Attention Token used by the Brave browser (which I’m personally a big fan of,) Wabi rewards participation in the ecosystem and sharing of data that helps brands make better products.
The fact the Wabi points value fluctuates gets consumers to log into our apps more often, again generating better engagement and participation.
In a grand scheme of things, Wabi enables thousands of people, most of whom know very little about blockchain or crypto, to benefit from the technology and have exposure to the market without ever dealing with private keys or Know Your Customer procedures. This point is extremely important, as these users are an overwhelming majority compared with still relatively small crypto communities. If we win this market, we'll win it big.
- How does Wabi's approach compare with traditional forms of marketing?
Let me just tell you when we go "facepalm" talking to corporate marketing teams:
Facepalm 1: "Based on my 30 years’ experience, consumers will do A."
At Taeltech (Wabi’s mother company), we focus on data. Experience becomes irrelevant in areas like consumer behavior way too quickly.
Facepalm 2: "We need six months to run a survey or a focus group."
Our approach is to iterate quickly: when we need to test marketing hypotheses with consumers (who are rewarded with Wabi points, of course), we launch it within a day, get results within 24 hours, then launch further/deeper questions to a subset of users. Because of this we can test a lot more ideas a lot faster, enabling our clients to beat their competitors to market.
Facepalm 3: "Our previous marketing campaigns generated x millions of impressions, and that is $$$ of value of impressions!"
Our approach is to look at sales impact, that's normally the real value generated. For example, some marketeers just throw money at key opinion leaders and then brag about the number of impressions that, when you look at the data, generate a negligible sales impact. We use our data tools to choose the right KOLs for the right brands, and track value generated properly.
Frankly, we understand why those facepalm situations happen.
On the one hand, large corporates do manage huge marketing budgets. On the other, their field of vision is limited by tools and instruments that they have at their disposal.
For example, one of the most popular tools used by corporates is a "focus group."
With this setup, several "target consumers" are gathered in a room with a one-way mirror where an invigilator leads them through a series of exercises intended to induce "typical behavior" whence company executives sit behind the mirror eating popcorn and taking notes. The whole setup is extremely unnatural for the consumers who more often than not engage in groupthink and occasionally exhibit totally opposite behavior to what they declared.
Wabi tokens and the ecosystem allow us to run genuine experiments to observe and measure stimulus-response dynamics as consumers engage in normal behaviour, making our insights much more reliable.
We use a similar approach for e-commerce and social media data extractions. Most marketing companies are content with measuring metadata such as the number of "likes" or "impressions." At Wabi, we invested a lot in building a powerful Natural Language Processing capability. This allows us to collect and process massive corpora of user comments that leads to an unprecedented understanding of what is going on in the minds of the consumers.
- What are the brands available to consumers through Wabi's platform?
There are over 2,000 products available to consumers for purchase with Wabi points, from all over the world. Most notable are probably products by Nestle, Danone, L'Oreal, Shiseido, SK-II, Blackmores, Hipp, Fancl, and many others.