Customer Generated Marketing And DAOs

The best way to market is to include your community/customers and allow them to be creative on your behalf.

Every Wednesday I write and publish an essay at the intersection of one or more of Web3, marketing, growth, storytelling, and brand strategy. This is essay number 5and you can find the others here.

In The Beginning (Sort Of)

In the 2000s Pepsi’s Doritos brand asked customers to produce ads to be featured in an advertisement slot at the Super Bowl, the result was…

This is an example of what Philip Kotler calls consumer-generated marketing, a phenomenon where the customers of a brand contribute their creative efforts to shape the brand’s marketing efforts. Pepsi’s experiment was an early example of a company bringing in customers and having them heavily involved in the crafting of the brand’s marketing effort.

With Reddit, we see perhaps the ultimate example of this in the Web2 world. Reddit has delegated so much power to its communities that it has to develop new products and features in conversation with the community to avoid drawing their anger. This can be seen clearly in the recent shutdown of Reddit by Reddit communities in protest over Reddit’s API changes.

These cases and experiences are not too common in the Web2 world but they happen now and again. Beyond just engaging customers, companies and brands are now actively letting customers shape their own experience of the brand. This can be anything from Starbucks asking their customers for product ideas and store changes to Reddit developing products and features in conversation with the community, to customer-generated advertisements by Heinz and Doritos. (I can easily imagine letting the community decide on a new logo or font and so on).

Where DAOs Come In

DAOs, however, are the ultimate example of this phenomenon right now. In a DAO the community literally decides the direction of the project down to the most minute of details. And it’s really the same thing because a DAO’s members can be thought of as customers in the sense that they buy (into) the DAOs vision and mission. They also typically stand to lose or gain depending on what happens to the project, i.e. just like customers, their investment in purchasing a particular product (contributing to a DAO in this case) has to justify itself or they move on to another product.

The main difference between Web2 and Web3 is really ownership. In Web2 you can do all the work for a brand/company (and maybe even get compensated) but you don’t own any part of it. In Web3, and in a DAO particularly, you own this thing in a tangible concrete way (usually through tokens.

Here’s a quote from Web3 investor Aleksija Vujicic:

“However, despite the fact that consumers were contributing value in the co-creation process, they didn’t receive any financial value in return; brands captured 100% of the economics. In short, successful web2 brands built on top of their communities, and ate the whole pie.

Successful web3 consumer brands will build alongside their communities, formalize the co-creation process, and reward their communities in turn — growing and sharing the pie together.”

In essence, the difference between Web2 and Web3 customer-generated marketing is that in Web3, everyone involves wins, whereas in Web2, most of the value (if not all of it) generally accrues to the brand.

NFTs, CC0s, And Customers Doing Marketing

One place to see this trend of customer-generated marketing on full display is NFTs going CC0. Putting the rights to an NFT project in the public domain means that anyone can use the NFTs in their own creative and marketing endeavours however they like but their success will always accrue back to the original NFT project as well.

Per Vala Ashfar & Mathew Sweezey:

“For example, the Bored Apes each own a unique Ape image. However, as other Apes create content, restaurants, brands, books, and TV shows (yes, all of these are real examples) with their Ape, they bring more visibility to the project, raising the value of all Apes in the process. The brand gave away its IP and allowed its customers to create their own products with it.”

Other NFT projects like NOUNs and Moonbirds also stand to benefit from this kind of widespread, individual marketing efforts because their projects are CC0 as well.

I’m very excited to see where the future of customer-generated marketing goes in Web3 as it becomes easier for community members to become ambassadors and marketers for their favourite brands and get rewarded for it even as the project benefits too.

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