You’ve probably heard a lot about Web3 and related terms such as NFTs, blockchain, and crypto. What are they? Web3 is still emerging but basically is a decentralized version of the world wide web. Web3 is being built on blockchain technology, cryptocurrencies, and NFTs making the Internet more assessable, secure, and private. The image below by Cointelegraph describes the evolution from Web 1.0 to Web 2.0 and Web3.
Blockchain is a distributed database that maintains a secure decentralized record of transactions. Cryptocurrency is a virtual currency secured by blockchain. Non-Fungible Tokens (NFTs) are assets based on a blockchain with unique identification codes. NFTs can represent physical assets like artwork, real estate, or a ticket to an in person event. They can also be used to represent digital artwork, in-game items, or access to special privileges.
How does all this impact digital and social marketing communications? Web3 will give users more ownership of their data and how it is used. This means marketers will have less access to data from consumers and will need more creative strategies to reach their target audiences. They’ll need to be more transparent about their data practices and will need to provide incentives to collect data from consumers.
HubSpot predicts that as Web3 takes hold there will be a shift from large social media platforms earning profits from content creators to content creators owning and controlling their own content and profits. This means marketers may need to shift from purchasing ads on platforms like Facebook and YouTube to forming more relationships with with content creators.
Cryptocurrency and NFTs offer new forms of incentives for brands, their customers, and their audience. Brands could create their own crypto and unique digital assets such as NFTs to reward consumers for sharing their data, spending time on the brand website, responding to surveys, or helping to create new products and services.
Web3 opens up creative possibilities way beyond traditional rewards programs. Gamification rises to new levels when rewards can come via brand tokens based on crypto. As we head into a cookie-less future this may be the new way to collect consumer digital data. It can also help marketers plan for the third-party cookie phaseout.
A cookie is the data generated by a website and saved by your web browser to remember information about you. For years cookies have meant that consumers don’t have to reenter information when visiting websites and they can receive more customized communications and offers. It has also enabled marketers to collect enormous amounts of data about consumers which makes targeting more effective and efficient.
Yet growing concern over Internet privacy and the emergence of Web3 is leading to a phase out of third-party cookies. For example, Google announced a phaseout of its third-party cookies in late 2023. Safari has blocked third-party cookies by default since 2020. In June 2022, Firefox rolled out total cookie protection by default on all its browsers signaling the shift from third-party to first-party data.
Experts say marketers will have to increase their first-party data strategy by enhancing data collection and management. This includes more transparent communication with customers and making a case for the value and personalization they will receive for sharing their data with the brand. Salesforce has recently announced a product that may make this easier. NFT Cloud will enable Salesforce’s customers to mint NFTs using their CMR and offer them as rewards or sell them on current brand eCommerce websites.
Another option is to turn to new emerging identity solutions like Unified ID and IdRamp. They allow advertisers to reach people who have opted-in to tracking. Yet, marketers will need to make the case to users why they should opt-in. What value will they receive in exchange?
Even then, there may be a sizable part of the population who will simply decide they don’t want to be tracked on the Internet anymore. Marketers also need to prepare strategies to reach people without tracking them. Melinda Han Williams, Chief Data Scientist at Dstillery says, “The good news is you don’t need to know who someone is to know whether they’d be receptive to your message. Today’s artificial intelligence (AI) enables marketers to choose best impressions rather than the best users.” We don’t need to know everything about a user to target customers effectively.
Some examples of brands leveraging Web3 are Nike, the NBA, and Chipotle. Nike purchased RTFKT Studios in 2021 and began making NFT sneakers. Their first collection called CryotoKicks Dunk Genesis sold 600 pairs in 6 minutes for a total of $3.1 million. Once brand fans own them, they can customize them using skin vials, created by different designers that add special effects and patterns.
The NBA created virtual trading card NFTs featuring brief highlight reels of top players. The cards can be bought and sold online building the NBA brand community around collecting and trading cards of fan favorite teams and players.
Chipotle offered rewards for the first 30,000 fans that visited their metaverse restaurant in Roblox. They were given vouchers for burritos at real-life Chipotle restaurants.
How will your brand shift your digital and social strategies to prepare for Web3?