Digital marketers are keeping a close eye on the latest developments in Web 3.0, commonly referred to as Web3, the blockchain-based internet that could revolutionize online experiences in the name of user empowerment.
Proponents of Web3 say it could address the loss of privacy and over-centralization they believe currently plague the internet, with a Web3 marketing experience providing users with more control over their own data and preferences as they go about their digital lives, including online shopping.
Here’s more about what Web 3.0 is, how it works, and what Web3 marketing strategies may entail.
What is Web 3.0?
Web 3.0 is still in its infancy, but it could become the next-generation World Wide Web, characterized by the complex concepts of decentralized networks and blockchain technology. For users, this means more privacy, improved control over their own content creation and consumption, and ownership over their data. For example, in Web3, consumers interact directly with brands versus communicating through third parties, such as social media platforms.
From the perspective of digital marketing efforts, Web3 has the potential to foster more trusting relationships between consumers and brands. In addition to supporting direct-to-consumer interactions, Web3 favors permission-based marketing models (in which consumers willingly share their data in exchange for brand-generated value) over invasive data collection.
If it continues to evolve, Web3 could radically alter how people interact and transact business on the internet. Digital marketing services will have to adapt to new opportunities and new revenue streams, such as the buying and selling of non-fungible tokens (NFTs). And as Web3 gains traction in the mainstream, decentralized autonomous organizations (DAOs) may be necessary to securely govern these digital transactions.
Web2 vs. Web3
The internet, which has changed dramatically since its inception, is currently between Web 2.0 and Web 3.0 in its evolution. Web2 was characterized by the centralization of social media platforms such as Facebook, Twitter, and Instagram—giant social media groups that sold targeted ads and user data to the highest bidder. Meanwhile, Web3 focuses on a decentralized web in which users are no longer the product and are in control over their online data.
In Web3, digital marketing will continue to displace traditional advertising and media relations strategies, although marketers will likely still leverage paid search and search engine optimization (SEO) to improve the organic search performance of their content.
Pillars of Web 3.0
While Web 3.0 has yet to arrive in full force, it stands upon certain pillars that will only continue to grow in importance:
Decentralization
In Web3, the internet disseminates data across an entire network of computers, loosening the stranglehold of big companies over users’ data. Not only does this decentralized nature make it harder for governments and corporations to censor content, it also minimizes the risk of server failure since there is less of a reliance on centralized servers.
Blockchain technology
The backbone of Web3 is blockchain technology, a decentralized digital ledger that records information across the many computers in a way that maintains security and transparency for all users. Blockchain records are write-only, meaning you can’t change or delete them. Blockchain technology underpins popular cryptocurrencies like Bitcoin, and ecommerce companies now leverage it to improve the security of customer data, create supply chain transparency, and facilitate direct transactions with consumers using cryptocurrency.
User ownership
In Web 2.0, users and their data became products. Social media companies and other platforms tracked their users’ interests and behaviors and then sold this data to advertisers. Web3 aims to change that by granting users control over who they want to share their data with, meaning you can choose to directly monetize your behavioral data—or not.
Interoperability
One of Web3’s aspirations is to enable blockchain networks to securely communicate and share data. This would allow a seamless flow of data, assets, and actions across networks and apps. Smart contracts, which are self-executing agreements based on specific conditions, can currently trigger digital transactions or actions within a blockchain network, and the goal is for smart contracts to work across networks.
Artificial intelligence
Artificial intelligence (AI) has a prominent place in Web3, leveraging data collection, cognitive computing, and natural language processing (NLP) technology for problem solving and the automation of routine tasks. AI also fuels the Semantic Web, an extension of the current web that fuels machines’ ability to process data in more human-like ways. When an AI-enabled computer develops a deep understanding of information, it can respond to user requests with better accuracy.
What is Web3 marketing?
Web3 marketing refers to marketing strategies that align with Web3’s pillars and demonstrate an understanding of user behaviors on the decentralized web. It recognizes the importance of keeping the audience engaged with insightful content and tokenized rewards, while maintaining a higher level of data privacy for users.
Web3 marketing strategies
- Community building
- Token-gated commerce
- Metaverse integration
- Bounty campaigns
- Decentralized ad networks
A good Web3 marketing strategy utilizes diverse content formats, similar to how a Web 2.0 omnichannel marketing approach leverages multiple social media channels. Web3 is creating new and unique opportunities for marketers to connect with customers in the following ways:
Community building
Unlike traditional Web2 marketing, where interactions often occur through centralized platforms of communication like social media channels, Web3 enables direct, peer-to-peer engagement. To build a Web3 community and cultivate engagement, you need to create a branded, Web3-enabled platform where Web3 users can convene.
For example, Nike’s .SWOOSH platform is a home for Nike’s Web3 audience. There, members can access Nike’s virtual collection and buy digital shoes and apparel for gaming. Community members can also collaborate on virtual products and potentially earn a revenue share on their co-creations.
Token-gated commerce
With token-gated commerce, brands can incentivize customer loyalty with direct offers like tokenized rewards or loyalty programs without collecting or sharing personal data. Essentially, merchants award customers tokens when they buy something or complete a certain action. Those tokens can be redeemed for rewards like exclusive discounts, special products, and access to live events or private digital communities.
The Starbucks Odyssey loyalty program is a good example of a modern Web3 loyalty program that’s built into existing journeys and real-world experiences. Odyssey members earn stamps (non-fungible tokens) that can be used to get exclusive rewards, like invitations to real and virtual events. They can also be traded on NFT marketplaces.
Tokenization also creates unique opportunities for partnerships among brands whose audiences overlap. Brands can team up and offer exclusive rewards to each other’s token-holders, facilitating an audience exchange.
Metaverse integration
The metaverse is a decentralized immersive virtual world in which users can interact with your brand, your products, and one another in real time. If and when the metaverse goes mainstream, marketers will be able to generate virtual reality (VR) or augmented reality (AR) brand experiences for their target audience.
The metaverse is an entirely new surface area for influencer collaborations, which can build your credibility and reach. For example, you might propose that influencers collaborate with you on an AirDrop campaign—a campaign that distributes the influencers’ decentralized digital assets to a target audience on a selected channel, using a smart contract or digital wallet.
Adidas's Into the Metaverse was a groundbreaking collaboration with prominent NFT brands like Bored Ape Yacht Club and PUNKS Comic, bridging the gap between traditional fashion and the digital realm. The initial NFT drop provided exclusive access to physical merchandise, setting a precedent for future collaborations and digital-physical experiences. By venturing into the metaverse, Adidas not only expanded its brand reach but also established itself as a leader in the world of digital fashion and collectibles.
Bounty campaigns
Bounty campaigns offer incentives to community members for completing specific tasks, fostering user engagement. To launch a bounty campaign, clearly define your campaign goals, rewards, and requirements. Choose suitable platforms and maintain open communication with your participants. Distribute rewards transparently and encourage participants to share your content with others to expand your reach. Analyze your campaign results to identify its strengths and areas for improvement.
Decentralized ad networks
Decentralized advertising is a new digital marketing strategy that leverages blockchain technology for greater transparency, control, and efficiency for users, advertisers, and publishers. These new ad platforms cut out the middlemen (like Google and Meta), giving users more agency over their data and the ads they see, while also giving advertisers agency over where their ads appear.
With a decentralized ad network like Adshares, advertisers can see exactly where automations are placing ads and how the ads are performing. Web3 browser Brave offers its own ad product, which allows users to opt in or out of seeing ads, and compensates them with a crypto token for viewing ads if they opt in.
The elimination of traditional ad exchanges and ad servers cuts costs for the brands, while this lack of an intermediary means users’ personal data doesn’t need to be collected or shared with advertisers.
Web3 marketing FAQ
How can you prepare your brand for Web3 marketing?
First, learn the key concepts and Web3 technologies involved, such as blockchain, cryptocurrencies, and smart contracts. Participate in Web3 communities to keep up on the latest trends and opportunities. Analyze similar use cases to your own where brands have applied Web3 marketing strategies.
What is Web3 in marketing?
Web3 in marketing refers to strategies that use blockchain technology, tokenized rewards, and decentralized networks to reach target audiences in more personalized ways on social networks and in the metaverse.
Why would people use Web3?
People use Web3 to increase privacy and control over their own data and to engage more freely with a decentralized digital economy without intermediaries.
