Why brands are just scratching the surface of web3
Use cases should infiltrate every part of a business, but they don't. Yet.
Starbucks, Gucci, Hasbro, Star Trek: lots of brands and IP have entered web3 over the past few years. Some with loyalty programs (Starbucks), some with PFPs (Rugrats, Forbes, Nike), a couple with branded collabs (Ambush x Azuki, Hennessy x FWB).
Lots of these were experimental, the kind of thing that happens when an exec says, "I keep hearing about this NFT stuff," and a team is tasked to "figure it out." 🤞🏻 And in many cases, the entries in the space used playbooks that were familiar to them. And in the process they left one of the most powerful, integrated fan experiences on the boardroom floor. For now.
Web3—or the promise of on-chain ecosystems—presents an opportunity for brands and IP that is so comprehensive and far-reaching that most companies aren't even structured correctly to tackle it. When I work with brands, I urge them to at least be mindful of where, ultimately, web3 can power experiences across their fandom: retail, marketing, IRL spaces/events, ecommerce, media, gaming, and more. That's a big pill to swallow for companies where teams have had narrow and well defined tasks for years, and a single, persistent "program" needs to find owners and a holistic strategy cross-functionally.
For this reason, here's what a lot of the early branded web3 experiments looked like, and it often followed a traditional licensing model:
The brand's licensing dept talks with the merchant (i.e. the NFT agency, marketplace, etc.) 🖼
If everyone agrees on the creatives and commercial terms, the merchant pays the brand a minimum guarantee (MG) – lots of upfront money 💰
The merchant also pays royalties on all primary and secondary sales 💰💰
The brand normally does little to no marketing on its channels/socials 📣
The brand may do more than one activation — a fragmented approach that works well for merch (two different t-shirt makers with different distributions and price points), but not so well for NFTs. 🤷🏽♀️
This "slapping a sticker on a lunchbox" 🍱 approach as I call it can work really well for merch, but it doesn't work as well (or at least leaves a lot on the table) when it comes to web3. It's high risk for both parties, and weaker in benefits. For example, the lack of unified marketing does a disservice in a number of ways:
Reach: Where a t-shirt merchandiser has its own retail or ecommerce presence, web3 upstarts have limited reach, and even less access to the core fanbase of the brand, meaning the collections or experience may not even reach those they're most likely to delight. This is where we get speculators, not fans. 📉
Authenticity: Consumers expect brands to be hands-on and engaged; they want to join an ecosystem driven by the brand, not buy a thing blessed by the brand. ☯️
To reiterate, I'm not saying these early branded experiences are wrong or bad, especially given how fragmented the company's approach likely is given normal corporate structures. But they are unfulfilled relative to the possibilities, and many consumers have felt burned by them in the short term.
Let's create an example with a major IP holder like a Disney. Not that this is likely anytime soon; they of all companies are especially siloed in the different parts of the org. But this illustrates where brands can and should go in thinking about a comprehensive and holistic strategy that serves the company at its core and its audience wherever they are.
Imagine Disney launches a Mandalorian NFT collection. A single Star Wars NFT has wildly varied use cases, and for an uber Star Wars fan like me, I'd want to engage in all of it:
Marketing: The NFT is a dynamic, collectible ad for the upcoming Mandalorian season that changes with the airing of each episode 🗣
Ecommerce: The item can redeem a physical collectible toy from the Mando website, which also teases more about the new season 🛒
Retail: It gets the holder 15% off a single purchase at any Disney retail store, bringing foot traffic that otherwise wouldn't happen 🛍
Parks: Skip to the front of the line for the Star Wars: Rise of the Resistance ride, an incentive to head down to Disney World and buy a parks pass 🏰
Community: Opportunity to vote on a content decision for an episode, embedding me more deeply into the ecosystem and doubly ensuring I watch to see what unfolds 📹
Gaming: The asset maps to a special in-game character in an EA Star Wars title, getting me to buy the game and reward Disney and its games licensee 🎮
Streaming: A month off a premium Disney+ sub, getting me to upgrade my access 📺
And so on. A single collectible suddenly integrated into every facet of the company, reinforcing my spending on and affinity for their products, but meeting me as a fan regardless of how much I'm able to engage with in any given moment.
While the corporate challenges of this kind of strategy are steep, the technical ones are ultimately not, with some work. The benefits of web3 mean that even a siloed company—with different tech powering checkout at retail, pass scanning at parks, streaming account logins, let alone partner ecosystems like EA's—can recognize my NFT anywhere I take it and reward me for it.
Even for blockchain skeptics, the efficiency effects of web3's tech are obvious. But the real value is when business/tech benefits and consumer happiness intersect, and that's something we'll be increasingly noticing as more sophisticated branded web3 worlds get integrated.
For now, I think it's vital for brands to at least get these broader implementations on the radar across teams, even if the initial launch experience is limited. And while no one likes a vague roadmap and timeline, it's also important to message to consumers that there is a long term game plan, one that is fundamental to the company and how it wants to treat its fans.