In Web3, brands can view marketing opportunities like sponsoring, engaging with a community, or even running CPM based ad campaigns as investments with an ROI in cash instead of a cost center. By aligning with their investee’s values, contributing to a Web3 community in kind and sometimes also in cash, a brand can actually make money. The mechanism is in the community, DAO, membership tokens which have the potential for financial returns. Rather than being a cost center, brands can see it as allocating funds into a new community and ecosystem that could grow and create value for the brand. Here’s an example for how it could work:
A Clothing or Fashion Brand X finds a community aligned with their value which also has a fungible token. An example could be Animoca’s Green token (https://greentoken.org) or maybe a REDD+ Carbon project in Kenya. The brand invests the $50k it might invest in marketing, into the $GREEN or the $KENYAPROJECT (fictional, btw) token. To work, it’s got to be a TOKEN with some level of liquidity. Then the brand invests in kind to further the cause of the of the community (planting trees, sending girls to school, or beer making). This in kind investment could exposure of the community the the Brand’s customers or discounts or free product samples, or executive time to further the community’s goals. The community grows thanks to the involvement of the brand advertiser, liquidity in the token increases, and in the future, the brand can sell their $GREEN tokens and move on to their next project or marketing campaign. Ideally the value of the token goes up over time due to the brand’s involvement, but maybe it’s a break even proposition. However, even if the brand sells at 50% of the price they bought in at, then the advertising campaign was half the expected price.
Important notes in this model:
- This type of model was tried with large, liquid tokens like $SAND by large consumer brands like Nike, but the Specific ways brands could invest in and benefit from a DAO like CartagenaTurtles.com:
- Purchasing DAO membership tokens – These tokens may increase in value if the community grows andprovides more value. The brand benefits from being an early supporter.
- Funding challenges/bounties – This drives participation and awareness for the DAO’s mission, which could increase the value of its tokens. Brands reap PR benefits.
- Buying NFTs – These may rise in value, especially as the community grows. Brands hold assets with potential upside.
- Providing capital for initiatives – Supporting important DAO-proposed initiatives builds community goodwill. The DAO’s success and token value may increase.
- Participating in governance – Brands can potentially guide decisions to sustainably grow the community, which grows the value for all token holders.
The key is brands investing in and collaborating with the DAO community for mutual benefit. Done authentically, all stakeholders may profit – both financially and in social impact. Brands align with causes they care about while gaining exposure to a new model for marketing.
