Last week, Porsche, entered the race of Web2 companies releasing non-fungible token (NFT) collections. However, the drop was slow off the line and spun off track in ways that fans of the luxury car brand did not anticipate.
TLDR:
In the days following Porsche’s drop, there have been innumerable analyses of Porsche’s brand strategy — or lack thereof.
Many attribute the collection’s outcomes to Porsche’s misunderstanding of the broader crypto landscape and confusion over reaching a user base that’s traditionally disconnected from Web3 sales channels. While this is broadly accurate, there are three specific elements that could have helped drive a successful drop for Porsche. According to Web3-native brands, creators and consultants, Porsche's strategy fell short in the areas of utility, community and communication.
Let's dive in a little deeper:
As NFT projects have burgeoned over the last few years, brands have had to get creative with instilling utility in collections. Utility can take many forms, including community perks, rewards, increased access to events and more. However, Porsche failed to clearly define the use cases behind its 911 NFT collection, other than the customizable digital image itself.
“Porsche works with incredible agencies, and the brand is so strong," says Alexa Lombardo, founder and head of strategy of Atomic Number 8, a creative studio working across Web2 and Web3. “But ultimately, if the main functionality of the NFT is the NFT, that carries no utility," she said. She also added that the price is often not the biggest issue, but rather the value associated with what people are paying for.
"I have no problem with the mint price," Lombardo said. "The problem was that they did not properly communicate the utility."
Another key element Porsche neglected to properly consider is community, a key expression of utility. Unlike other Web3 drops, such as Nike.Swoosh, which gradually built its Web3-community and following over a few years, Porsche moved hastily with growing its Web3 presence and user base only six months before the mint.
“Other brands have entered the space and have taken so much time to build community beforehand”, says Christian Reza, Web3 go-to-market advisor and strategist at the Web3 agency and marketing DAO, Myosin. "You look at Nike, and they've really taken their time over the last few years. With Porsche, they mistook audience for community and assumed they would sell out."
You look at Nike, and they've really taken their time over the last few years. With Porsche, they mistook audience for community and assumed they would sell out.
To this end, it appears Porsche followed a false assumption that a strong brand value would translate into eager collectors. But consumer connectedness to a product is distinct from the desire to own a collectible. Unfortunately, the company missed essential persona development and market research to understand its users’ motivations, pain points and what they (the community) wanted out of NFT ownership.
Additionally, the company needed to consider its users' readiness to embrace the project from a technology standpoint. Unlike buying a physical Porsche 911 — with its speed, gears and drive-ability — an NFT requires a crypto wallet, something not many car enthusiasts necessarily have. Not to mention, owning an NFT requires a level of Web3 onboarding. Brands have the responsibility to educate their user base, to ensure customers can readily access and enjoy loyalty programs and perks associated with the drop.
Additionally, Porsche struggled to clearly communicate its collection’s purpose and goals to its user base. Without clearly defined goals, customers were left to infer value and derive meaning for themselves – a predicament which inevitably precipitated in an undersubscribed collection and the negative press Porsche is seeing today.
“I’m left really curious what Porsche’s goals were for this project”, laments Lombardo. “Did they want to test something out? What was the problem they were trying to solve? Were they trying to get people to connect to the brand?"
With haphazardly defined objectives, Porsche struggled to drive enough intrigue to fund the project. While at the surface, most deem this a failure, Christian Reza sees Porsche’s collection as more of a misstep and a launching pad for the company. “I don't believe that Porsche’s NFT drop was necessarily a failure. I think they do have an opportunity. It's not a done deal. It's just a blunder for now. Everyone defines success in a different way”, he says.
In fact, floor price is only one determiner of success in an NFT drop, and what defines success depends on the brand and what its goals are. However, when brands fail to define their goals, it is incredibly difficult to judge one’s failure from another’s success.
Among other pain points and learnings, Porsche’s collection reveals a massive opportunity for Web3 brand consultants to partner with Web2 companies. As Web2 companies increasingly grip onto the alternative customer acquisition pools and products afforded by blockchains technology, so too will they increasingly rely on Web3 natives to guide successful strategy. A number of Web3-literate creators have already begun to discuss a need for better advisors for legacy brands interested in entering the space.
The nuances of branding and marketing in Web3 are multifaceted and complex. It is therefore reductive to suggest that Porsche’s NFT drop was nothing but a complete flop. Instead, this particular trial provides important insight into distinct indicators of collection success, the need to communicate effectively across the brand cycle and the importance of brand-consumer alignment and goal-setting.
“[Porsche] has an opportunity to do this again, go back to the drawing board and actually conduct the persona-development stage," says Reza. "This isn't over and I'm really excited to see what happens. Hopefully they run with it."
Isabel Doonan is the CEO and cofounder of Girls Gotta Eth and Sacreage, a Web3 startup working to expand tooling for crypto philanthropy. With a background in Fintech and ESG, she is deeply passionate about the intersection of blockchain and climate funding, as she works to build a better, more equitable future in which everyone can participate in philanthropy.
This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.
