The do’s and don’ts of maintaining your brand in Web3
Web3 is the brave new frontier for audience engagement, offering exciting opportunities to reach customers where they are (or where they’ll soon be). Getting in early could mean staking a claim on the very future of the internet, with all the potential benefits that entails.
But the market’s relative lack of regulation and decentralized nature make Web3 a complex landscape to navigate while maintaining the sanctity of your brand. This guide will help you chart a course to success in Web3 while safeguarding your brand identity.
What is the current state of Web3?
There are two main tenets of Web3: the metaverse and the blockchain. The metaverse can take a number of shapes, but all of those shapes include some form of virtual reality. Prominent examples include Roblox and Fortnite, a pair of virtual environments in which users can play games, attend concerts, and otherwise hang out and socialize. Bringing your brand into these spaces can get you access to a wealth of potential Gen Z customers, endearing you to the next generation of consumers.
Blockchain technology, on the other hand, simply refers to a shareable, immutable ledger that records transactions, most typically associated with cryptocurrencies and non-fungible tokens (NFTs). Cryptocurrency and NFTs can bring users in, increasing their emotional and financial stake in your brand and its success. The reselling of those digital assets on secondary markets can then contribute additional revenue in the form of loyalty payments.
These two tenets of Web3 can occasionally interact — think digital clothing that can be worn in a space like Roblox while also being minted on the blockchain as an NFT — but there are discrete considerations to be made for each.
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How to enter the metaverse safely
Risks
In the case of the metaverse, you have no control over what other brands or individuals may interact with your brand. The decentralized nature of the metaverse means that there are fewer platform holders that can make things right if they go awry. For example, when purchasing land in the metaverse with Decentraland or The Sandbox, you could end up with a plot abutting some other brand or individual with which you’d rather not associate. That could mean a children’s toy brand next to your fine liquor or it could mean a direct competitor taking up space in your virtual neighborhood. Either way, it’s a suboptimal outcome for your Web3 endeavor.
In Fortnite and Roblox, brands more frequently collaborate with the platform holder (Epic Games and Roblox Corporation, respectively) to create limited-time in-game cosmetics or installations. In both cases, how users conduct themselves near your brand’s digital representation can be hard to predict. When TIME Studios tried to bring civil rights history to life with its March Through Time Fortnite event, it ran up against players dressed as cartoon characters doing irreverent dances in front of MLK’s “I Have a Dream” speech, creating a tonal dissonance that undercut the history on display and made what was supposed to be a serious history lesson into a farce. Without careful consideration, your brand could be the one undercut, or, if you opt to create a wearable outfit for players, the one doing the undercutting.
It’s also important to consider where in the metaverse you’ll find the audience for your specific product or service. Roblox, for example, skews very young. Fortnite skews young and male, primarily from late childhood to young adulthood. Decentraland and other metaverse land sellers tend toward the same demographic but slightly older. Placing your brand strategically can help it meet only those users who should see it and are most likely to turn into customers.
Solutions
Whether you’re moving into the metaverse via virtual land, in-game installation, or collectible digital cosmetic, the first thing to consider is the length of your engagement. In most cases, you can minimize the risk of negative interactions with your brand by making your Web3 play a limited-time activation. This can also serve the purpose of building additional excitement among users.
Where platform holders exist in Web3, their influence can be hugely beneficial. Epic Games, for example, has the power to limit the actions players can take in Fortnite for special events. With March Through Time, it prevented players from shooting each other during the event. While that measure proved insufficient to completely avoid tonal dissonance, it is nonetheless an illustration that platform holders can apply rules to their platforms to further protect your brand.
If you decide to take a more permanent position in the metaverse — especially in the case of digital real estate — it can be useful to enlist the help of a virtual real estate investor or developer such as Everyrealm. These experts can help you find the right platform for your brand, and they can even help you lease the virtual land before you buy to ensure you have a way out should you need it.
It’s also vital to do your demographic research on whatever platform you choose to pursue, both to ensure the effectiveness of your presence there and to make sure your brand isn’t being appropriated by anyone who shouldn’t be able to do so.
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Getting on the blockchain
Risks
The marketing potential of the blockchain is substantial, but it’s not without risk. Cryptocurrencies, which are decentralized digital currencies that use the blockchain as proof of ownership, have highly volatile values. The exchanges on which they’re traded are all relatively new startups, and can run into serious financial troubles as a result of the lack of crypto regulation.
The blockchain also serves as the basis for NFTs, which allow for scarcity in the digital world by proving authenticity and ownership of digital assets. NFTs are a major opportunity for businesses, but the market is full of phishing scams targeting the wallets in which NFTs and cryptocurrencies are kept. There have also been several plagiarism scandals in which artists had their work minted and sold as NFTs without their consent or remuneration and bad actors have impersonated major brands to sell NFTs.
Solutions
As with the metaverse, moving into cryptocurrency and NFTs can be made significantly easier and safer through partnership with an established player. There are plenty of well-known crypto exchanges and NFT marketplaces in good standing, and they’re eager to partner with brands looking to dip their toes into the space. Such a partnership can ease anxiety around having to invest in new technology (they can handle that side of things), put in place safeguards around ownership, and ensure everything is done above board. Just be sure to do your due diligence before inking any agreements — Web3 moves fast and you’ll want to make sure you’re hitched to the right wagon.
To avoid bad actors misrepresenting your brand, you’ll likely want to file for expanded trademark rights to cover virtual goods and NFTs. Being proactive can also help here — if you establish your brand in a virtual space, it may stop scammers from bothering with impersonation.
Web3 also allows NFT creators to deploy what are called smart contracts (programs stored on a blockchain that run when predetermined conditions are met, without any intermediary or time loss), which can place further limits on what can be done with digital assets. These provide even more security, keeping your brand airtight.
Web3 is a wellspring of opportunities for brands willing to take the risk of getting in on the ground floor. With these best practices in mind, you can keep that risk to your brand minimal while still capitalizing on all Web3 has to offer.
