Newsletter: Brands in Web3 & Web3 in Brands

Welcome to Edition #14 of “Brands in Web3 & Web3 in brands“, your regular dose of the latest news from the blockchain, crypto, and Web3 space, curated to provide unique marketing and brand strategy insights with a pinch of spice.

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Newsletter: Brands in Web3 & Web3 in Brands

This week: I examine how leading layer-1 brands differentiate from other protocols in their messaging, critique the effectiveness of mega sponsorship deals in the Web3 space, and reminisce about 10 years of Crypto Valley.

Inacta Global Protocols Report

I was very pleased to be asked recently to contribute to the Inacta Global Protocols Report on the subject of branding in the layer-1 landscape. The report provides a comprehensive look at the current status of the layer-1 space in terms of concepts, regulatory status, valuation metrics, and technological maturity, as well as fact sheets on over 70 protocols.

With much of the focus on tech, I was happy to bring a fresh perspective to the report by analyzing the brand consistency of the top 10 layer-1 protocols. Our analysis is based on the second part of a series of brand studies that we have been doing on different segments of the Web3 space, including centralized crypto exchanges, layer-1s and crypto banks. We’ve been working on this for months, so it was quite exciting to get the opportunity to share some of the results publicly for the first time.

But why did we decide to do this research in the first place? Well, as a branding specialist in Web3, I noticed something that bothered me: the Web3 sector isn’t performing well when it comes to brand consistency. It seems that everyone is trying to be everything to everyone, all the time.

This is a problem, because brand consistency is crucial for building trust, loyalty, and differentiation in any industry, especially in one as new and complex as Web3. Without a clear and coherent brand identity, layer-1s risk confusing, alienating, or even losing potential users and developers.

To illustrate this point, let me give you an example from our report: Cosmos. If you visit their website, you’ll see a big headline that says they are the “most trusted” layer-1 for building value. Wow, that sounds impressive, right? But how do they back it up?

When you hear the word “trust” in a Web3 context, you might think they would show you some evidence of their security features, like how they test their code, how they reward bug hunters, or how they compare to other layer-1s in terms of fault tolerance. Or maybe they would show you some testimonials from satisfied customers, or some logos of their prestigious partners.

But no, they don’t do any of that. Instead, they throw lots of other numbers and messages at you, like how they are innovative, cheap, fast, and green. Some of these numbers are impressive, but they are not underpinning the headline message of trust. They fill the space in a website template, but don’t tell a consistent, convincing story. And they don’t position Cosmos in a unique branding space. As a result, it is not clear to users why they should choose Cosmos over competing protocols.

But the idea here is not to pick on Cosmos. Bear in mind that this is just one example of many in the layer-1 space and it is purely a critique of the consistency of messaging, not the underlying protocol. More important is the tendency across the layer-1 space to “throw the kitchen sink” at marketing and messaging, making every possible claim, rather than crafting a firmer, more memorable brand.

So, what’s the takeaway from all this? Well, it’s that layer-1s need to find their sweet spot in the Web3 universe. They need to balance their vision and innovation with their relevance and differentiation. They need to tell a story that resonates with their target audience and showcases their unique value proposition. And they need to create a brand that stands out from the crowd and stays in the minds of consumers.

That’s what I call finding the “Goldilocks Zone” for a layer-1 brand. Not too hot, not too cold, but just right. Read a full summary or our findings on page 78 of the Inacta Global Protocols Report.

Bitpanda and Bayern Munich: the carpet bomb approach to crypto marketing

On Sunday, some of the biggest names in the music business were in attendance as Trevor Noah presented the 66th annual Grammy Awards which saw SZA and Killer Mike coming away with the most awards. The location? The Arena in Los Angeles, the venue previously known as the Staples Center. According to an ESPN report at the time, a person with knowledge of the deal said that it cost $700 million to secure the naming rights to the venue over a 20-year period. This is part of a repeated pattern: in a recent blog, we discussed how Tezos reportedly spent an eye-popping £20 million ($27 million) per year to ink a similar deal with Manchester United, while sources claimed OKX splashed out £55 million ($70 million) over 3 years to partner with their local rivals Manchester City. These types of sponsorship deals are totemic of the classic tactics that large Web3 firms use to attract eyeballs and gain name recognition: massive spending to reach a huge, undifferentiated audience and almost no way to quantify success.

It is in this light that I view the new Bitpanda sponsorship deal with Bayern Munich. Although no exact numbers have leaked out, Bitpanda have become platinum sponsors of the Bundesliga champions, the highest level of partnership. The headline benefit of this type of partnership is to gain TV exposure, and appear on billboards and signs in and around the stadium including a large banner near the corner flag. Broad, untargeted advertising in other words.

I sometimes compare this type of “carpet bomb” approach to people trying to sell me cat food. I have lived on this earth for a number of decades. At this stage, I have probably been exposed to multiple hours of cat food advertising in total. Yet, despite knowing brands like Whiskas and Felix and finding some of the ads good, I have never made a purchase. Why? Well, I have nothing against them, but I don’t have a cat. This is the problem with this type of deal. The vast majority of the people who encounter your brand in a football stadium “don’t have a cat” — they are not interested in crypto and don’t know what it’s for — and repeatedly showing them your logo is probably not going to change their minds.

Although they generally involve a lot of waste, these big sponsorship deals still offer some interesting opportunities. Well designed brand activation campaigns could give new users their first taste of crypto in creative ways. For example, rather than just trading cards and digital collectibles, more interactive experiences like metaverse stadium tours or fan clubs could bridge the gap between newbies and crypto.

But these types of integrated brand and marketing partnerships need to be backed up with resources long after the initial press release. For example, the much touted Manchester City metaverse, OKX Collective, still prominently features İlkay Gündoğan, a player who left the club for Barcelona seven months ago. Furthermore, despite OKX being the "official crypto exchange" of Manchester City, a mere 3% of the $CITY fan token trading volume actually takes place on the exchange. This is likely due to the fact that the fan token was launched through a separate partnership with Socios, which suggests they are not working closely enough with OKX to cross promote the brands.

Crypto Valley turns 10

I had the pleasure of attending the 10th anniversary celebration of Crypto Valley last Monday. My journey in Switzerland’s Web3 space spans over a decade. I’ve had the privilege of contributing as a board member to the Swiss Bitcoin Association and as a co-founder of the Digital Finance and Compliance Association. I’ve been fortunate to work alongside many influential figures in the field, including Niklas Nikolajsen, co-founder of Bitcoin Suisse, and Vitalik Buterin, among others. Over that time, I have known Crypto Valley to be a tremendous hub of ideas, collaboration, talent and investment. What was clear from our discussions on the night was that despite the sometimes fierce competition between Crypto Valley firms, we all share a similar belief in the power of blockchain to inject more transparency and individual freedom into finance and business. I want to thank all the speakers and organizers for a great night and I look forward to the next decade of Web3 innovation in Switzerland.

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