I think I see piping - so either chocolate or royal icing.
You can use candy melts and they would work nicely. That way you can print out the letters and just trace over them.
How do you get the letters to stand up if they are made of candy melts?
I use gumpaste. Measure and put bamboo skewers into the gumpaste letters (thick enough to hide the skewer) while they are still wet. You have to turn the letters a couple of times to dry both sides. You want the skewers to go deep enough into the cake to hold the letters in place, or put coffee stirrers (skinny straws) into the cake and the skewers into those. If you only have regular straws you can put chocolate into those and then they will hold the skewers
Yep, what they ^^^^ said