Agencies and DAOs

Headshot of Max Lenderman next to the words "Into The Metaverse"

As DAOs continue their ascendancy in web3, agencies should assign a portion of their messaging prowess and digital chops to servicing these highly capitalized communities.

NFTs and the metaverse get most of the attention in adland. But perhaps the most fertile area for marketers to explore are decentralized autonomous organizations (DAOs). 

This year, brands and agencies are bound to get engrossed in the emerging worlds of DAOs. 

NFTs may seem less complicated than DAOs. There’s a big difference between working with one creator and a DAO that has hundreds — if not thousands — of stakeholders who control the organization. Instead of working within one NFT marketplace like OpenSea, marketers must now navigate a much more diverse and desultory DAO ecosystem.

I recently spoke at ETH Denver’s DAO conference to a group of current and future DAO founders. It became clear how many hurdles there are between cultures and ethos for agencies and brands to begin the lucrative work in engaging with DAOs.

The first is most obvious: agencies are intrinsically hierarchical, while DAOs are decentralized. The practically primal need for titles and org charts is at a refreshing minimum in DAOs. In fact, many DAO members choose to be anonymous, using colorful pseudonyms — which presents challenges for cultures that like LinkedIn connections and email exchanges. 

While agencies and brands predominantly create messages, DAOS create conversations. This is a difference in ethos. Brands also tend to extract value from their customers, while DAOs try to create accretive value for theirs — another quintessential disconnect.

Marketers love scale — the more impressions, the better. For DAOs, quality matters more than quantity. A DAO with 500 highly specialized, skilled and motivated members can become a multi-million dollar endeavor within months (Friends With Benefits, anyone?). Brands also like to control their IP; DAOs share it freely. Brands are, for the most part, risk-averse; DAOs are run by people who want to blow up the status quo.

Agencies need to fundamentally understand these differences if they want to engage effectively with DAOs. These disconnects are not unbridgeable — but they do require guides.

Agencies can start by hiring web3 natives, or working with consultants, to upskill their people on the world of DAOs. Strategists and creatives should join DAOs themselves to understand the community-building mechanics within them.

Brands should gauge their engagement with DAOs through a lens of shared values and audiences. Instead of approaching DAOs with a sponsorship mindset, instead ask how you could add value beyond monetary support. How can a brand help the community thrive? How can it support the mission? How can they co-create and take on shared risk to try new things?

Agencies and web3 are converging before our eyes. VaynerMedia launched VaynerNFT to much success (it helps if the founder is a massive evangelist). WPP’s Hogarth launched The Metaverse Foundry, 700 creatives globally available to its agencies and clients. Experiential agency Invisible North has a stable of web3 clients like Ledger, Coinbase, FTX and Metaplex. These are URL-based clients that will need to create IRL experiences for their communities and attract new members. 

Experiential agencies, it seems, are best positioned to service DAOs, because a major component is a thriving community that can meet URL and IRL. DAOs do a great job coalescing members on Discord or Telegram, but are a lot less adept at live events and conferences. Experiential agencies can produce IRL events as well as activate and reward fan bases, communities and influencers through shareable experiences. Experiential agencies can engender the kind of “vibes” that DAO communities respond to best.

As DAOs continue their ascendancy in web3, agencies should make room to service these highly capitalized communities. This means going beyond quick-hit tactics like NFT drops or buying real estate in the metaverse. DAOs require rigorous strategy and management, with a hefty dose of IRL activation. If done right, the relationship between agencies and DAOs could unlock massive revenue potential and expand the horizons of creativity.

Friends with benefits, indeed.

Max Lenderman is CEO of Mudfarm Ventures and a teacher at Denver Ad School and University of Colorado, Boulder.

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