If you've been following the rapidly evolving digital marketplace, you've undoubtedly heard about the transformative potential of Web3. If you’re wondering what it is and how it can revolutionize your marketing strategy, here’s your primer!
What is Web3?
Web3, or the decentralized web, references the next-generation internet. Web2 is the version of the internet that we know and use today. Web3 is the next phase. The big difference? In Web2, control over transactions, content, and data is centralized with a few tech giants whereas in Web3, users have control over their information. Some say Web3 gives the power back to individuals.
This paradigm shift is driven by the convergence of several technologies including blockchain, artificial intelligence (AI), and the Internet of Things (IoT). These technologies offer the possibility of creating 'smart' digital contracts transacting directly between parties without intermediaries. Essentially, Web3 is an integration of futuristic technologies, aiming for a more secure, private, and efficient internet.
Web3 represents an exciting leap forward, likened to the shift from radio to television. With its promise for greater interaction, increased trust, and enhanced value exchange, it's not just a buzzword but an imminent reality that marketers must face.
What is Web3’s Significance in Marketing?
The implications of Web3 for marketers are enormous. Here's why:
- Consumer Trust and Transparency: The foundational technology of Web3, blockchain, enables unparalleled transparency. It’s like writing something with permanent ink; you can’t erase or alter it once it's there. With its immutable digital ledger (a digital record-keeping system), any transaction is traceable and reliable. This trait can elevate trust and customer loyalty in a world where consumers value brand transparency.
- Empowering Consumers: Web3 gives consumers control over their data, fostering a fair value exchange. It shifts away from surveillance marketing, enhancing consumer-brand relationships, and opening opportunities for consent-based marketing activities.
Jeremy Gilbertson, builder, futurist, and co-host of the emerging tech x culture podcast Thinking On Paper* sees it as an evolution of audience infrastructure. He says, “In the past, brands were broadcasters looking to engage their audience with content. Now we can begin to think about how meaningful, two-way relationships can start to take shape.”
- Innovation in Ad Models: In a Web3 environment, traditional ad models could be disrupted. New formats harnessing smart contracts and token economy (or tokenomics) can lead to unique campaigns where users are rewarded for participation and brands garner higher engagement.
According to Mark Fielding, writer and co-host of Thinking On Paper, the same technology that allows consumers to hide their identity also provides access to mountains of data and insight. “Blockchain technology supercharges KPIs. The clarity and precision of data - which digital products bought, when, and at what price; which brands a consumer likes; which communities they are part of - means brands can know customers better than they know themselves. The tech gives you the tools to forge deeper connections in more immersive environments, to offer tailored and unique products and experiences and turn brand fans into brand voices.”
How Are Brands Using Web3?
Forward-thinking brands are already exploring Web3's marketing potential.
For example, Nike acquired a virtual fashion company, RTFKT, positioning itself in the rapidly growing metaverse (a Web3 manifestation). This move allows Nike to sell virtual items, including clothing for avatars, and tap into an entirely new revenue stream. In 2022, Nike launched Cryptokicks IRL, the first native Web3 sneaker.
Fielding is particularly fond of Hublot’s collaboration with Japanese NFT artist Takashi Murakami as an example of the right pairing of a Web3 native, Murakami, with rarity, loyalty, and exclusive access. “Murakami has real legitimacy and respect in the space, not to mention a clear understanding of luxury, technology, and their intersection with art.”
In this series, we will discuss more examples of brands innovating in this space and provide practical tips for your Web3 marketing journey, including:
- Loyalty Programs
- Smart Contracts
- Tokenization of Products and Services
- Community Building
- Staffing for Web3
How Do I Get Started?
Given this technological shift, experimenting with Web3 and its applications in marketing is essential for staying competitive. However, this doesn't mean throwing everything at Web3 and hoping something sticks. It involves understanding its nuances, aligning it to your marketing strategy, and carefully designing pilots to generate insights.
We asked Fielding how marketers should prepare. “They should experiment, iterate, and test-and-learn. The only way to stay relevant in a rapidly changing landscape is to think, work, and experiment in that landscape. The best time to start is today.”
Fielding suggests attending conferences and joining Web3 marketing communities like the Web3 Marketing Association Discussion Forum on LinkedIn. You can also check out Thinking On Paper’s Web3 Brand Strategy Masterclass featuring former expert guests.
*Wripple is a paid sponsor of Thinking On Paper.
Read more from our series on Web3 applications in marketing.
The following posts have been published in this series: