Web3 — Adding a 3rd dimension to Brand Activation
Unlocking the community flywheel for brands
When it comes to defining the web3 frontier for brands, a lot of focus tends to go towards building a presence in the emerging and immersive metaverse, with large brands starting to commit significant money and resources to it. In many instances, early innovators look to extend real-world or digital properties and campaigns into the new virtual world. The metaverse is potentially the next iteration of how consumers use the internet to connect, interact and transact, so companies large and small are keen to capitalise on these new and always-on possibilities of engaging their customers. From building a virtual venue, hosting virtual events, creating virtual goods, endorsing virtual influencers or even building their own metaverses, these initial experiments tend to extend and transpose existing real-life and digital propositions into this new immersive and persistent 3D reality.
Yet, I would argue that a lot of this seems to be about churning old school marketing recipes to promote products, services and brands. The most obvious example is buying ad spaces in metaverse worlds and venues, just as you would do in the real world. Or recreating virtual versions of real-life products, and promoting or even transacting these in recreated virtual retail venues. Targeting virtual avatars as a new consumer segment to sell complementary virtual goods and services may sound like a no-brainer, but is this the true paradigm shift web3 has in store for brand activation and value creation?
While I wouldn’t discount the incremental opportunity of investing in metaverse projects, the real transformative or even disruptive shift will come from brands fundamentally rethinking their activation and value principles along the lines of the community and ownership economy. Going beyond isolated initiatives to create durable brand value and sustainable brand activation by realigning incentives and collapsing different stakeholder categories into a single shared-purpose community. Web3 represents the rejection of centralised, value-extracting entities that force you in one-directional lock-in relationships. So why would brands escape this fundamental undercurrent that increasingly shapes user and consumer behaviour?
Young consumers do not simply want to buy what your brand is selling, they want to join you. Gen Z is increasingly looking to brands to represent who they are and what they stand for, and are eager to connect with the tribe a brand can create. They want brand communities, not advertising, with belonging and participation being the new expectation.
The best brands are the ones that build belonging by tapping into and building community. Thinking beyond customers and transactions, the real next frontier for brands isn’t so much the new 3D reality or metaverse, but addressing the market opportunity and real cultural need for fostering connection, creating belonging and serving communities. And that doesn’t mean one has to start with implementing blockchain tech, create NFTs or mint social tokens. It starts with rethinking how to build belonging around shared values and beliefs, standing for something and walking the talk, enable group identification and individual self-expression, incentivise participation, and gradually handing over the keys to the community. Rather than adding a third dimension to existing marketing recipes, this is about creating a new fabric of digital engagement, with direct connection, community empowerment, collective ownership and value redistribution being the core ingredients.
The new fabric forces brands and companies to reorient their growth strategies from customer acquisition to community acquisition and empowerment. Brands can look to engage existing communities that share common values or passion points. By figuring out how online communities are forming, where they’re building and where they’re moving to, what their values and needs are, brands can become enabling and supportive partners by providing the products and services these communities need.
The real opportunity however is for brands to build their own community, where the brand is the hero and customers aggregate around a common purpose to forge meaningful connections and experiences. Turning customers into advocates and ambassadors, treating them as fans and cultivating the same notion of affective attachment, is what makes brands true lovemarks. When customers become true believers, brands and products transcend the functional and become cultural status symbols and experiential tokens. Economically, socially, or culturally, in terms of loyalty and devotion there is nothing quite like true fans. Their emotional connection and commitment to the brand is not only reflected through a disproportionate share of purchases and advocacy, but their “tribal” loyalty also contributes to shaping the brand and building stronger brand value.
And now these “brand patrons” can be recognized and rewarded for their contributions. By aligning incentives across investors, employees and consumers, tokenised brand communities can maximise both brand and stakeholder value. The value proposition for brand fans changes from one of consumption and promotion to that of ownership. For consumers, this becomes not only a matter of spending, but also investing in brands. When you like a brand or product, you can buy tokens (fungible and non-fungible) or earn them by contributing to the community. These tokens in turn would entitle holders to vote on certain brand decisions, serve as an engagement and reward vehicle, turn fans into brand advocates, or be redeemed for member-only merchandise and privileges. Once we have the opportunity to own a part of the brands we enjoy and admire, some the key levers of building and activating brands will be transitioning over to the community. There’s nothing more authentic and effective than helping sell something you genuinely love and own.
Take this one step further and at its most transformative level, brands could become fully decentralised and permissionless. It’s the potential to redefine the core anatomy of a brand itself, the ability for brand community members to create value however and whenever they feel without permission, living up to the principles of the ownership economy to distribute a brand between an entire community that owns it. Ultimately, it means letting go of the idea that a brand is centrally controlled. The concept of brand is, by design, a manifestation of the community which adopts it into their lifestyle. It means seeing the dissolution between brand and community, where brand is community, and community is brand.
So yes, Web3 is about adding a third dimension to brand building and activation, but it’s one that is both about connecting the physical world with a new virtual dimension, as much as it is about building intimate relationships with your communities, and in the process giving up some control and ownership to the benefit of the growing ecosystem of committed stakeholders.