Most people don’t know what Web3 is. But this new iteration of the internet can open up a lot of doors for brands and consumers alike.
By now, the odds are you have already heard of Web3 in some shape or form. If you don’t know what it is, the Web3 Foundation defines Web3 as “a decentralized and fair internet where users control their own data, identity and destiny.”
While Web3 business models aren’t yet dominating the mainstream, there is a lot of excitement about its potential to displace the existing centralized Web 2.0 model for many if not all internet applications.
What does this all mean for marketing professionals?
A Fourth Dimension: Brand Extension and Expansion
First, it’s a reminder that change is the only constant — that we can’t sit idly by and trust that the way things have always been done will continue to be good enough tomorrow. It’s also a reminder that there are some fundamental truths about the brand-consumer relationship that act as north stars even as new technologies emerge and we look for the best way to leverage these new opportunities.
When discussing the current use-cases of Web3, the metaverse is commonly what people think of. It presents a key opportunity for brands and consumers to interact directly within virtual worlds. Various luxury and apparel brands have already begun exploring these lands, including Nike and Gucci.
In the metaverse, brands can open virtual stores, and users can purchase virtual goods and services using cryptocurrencies or fiat (i.e., government-backed) currencies. These new engagement opportunities open up new revenue streams and strengthen brand relationships with increasingly online consumers.
Not everyone is ready to join this next iteration of social commerce — at least not yet. Very few brands have the resources and risk appetite to jump on every trend from the start and define the future. But brands also can’t resist change, especially when those changes present incredible opportunities to reimagine the brand-consumer relationship.
Related Article: How Will Web3 Improve the Customer Experience?
Off to New Places: Be a Teacher and a Hype Man, Not Just a Salesman
One challenge for Web3 marketers is that outside of a core group of enthusiastic first adopters, most people really don’t understand what Web3 is, never mind how to actually engage with Web3 technologies. In fact, an informal LinkedIn survey from Harvard Business Review showed that 70% of respondents didn’t know what Web3 was.
Web3 marketers have to be educators. This means understanding the reason they are participating in the trend and having the internal expertise to make it easy for consumers to participate. Of course, this is consistent with what we know to be true about marketing any sort of product or service. Without education — clear and concise communication about the value to the customer — there’s no reason for them to buy from you. Without energy and passion for the value you provide, there’s no reason for the customer to get on board.
As your brand continues to innovate, either with new technology or through new products or services, your customers need to be guided and helped along to realize the full value of that offering. It’s the other side of the coin of innovation, and you need both to succeed.
Community Building: Consumers Want to Engage and Participate
While “customer-first” has become a major buzzword, the concept of a community-focused approach that puts consumers in the driver’s seat is central to Web3’s value. Earning community participation requires more from brands in a decentralized paradigm, and we’re seeing brands offer incentives to get it.
For example, some are offering branded NFTs (non-fungible tokens) for customers to learn more about a product or participate in a Web3 initiative. They’re quite literally getting ownership of the products and services they utilize. The more customers that benefit from participating in a brand’s ecosystem, the more valuable the rewards become, and it gets easier to attract more customers or users.
The lesson for marketers in other areas is that it’s going to be increasingly important to deepen engagement with customers and provide them a greater say in the company-customer dynamic. That particular use-case is still emerging, but several such projects already exist in B2C, such as:
- Sports teams already offer fans the opportunity to purchase “fan tokens” in exchange for opportunities that make them feel like they are part of the game, like choosing a member of the starting line-up or jersey designs.
- AMC Theaters offered a limited number of NFTs to customers who purchased opening day tickets to the most recent Spider-Man movie.
Transparency Into Governance: A True and Open Web
Finally, it’s clear that privacy and transparency have become a priority for marketers, business leaders and politicians over the past few years. Now, they have also turned into another opportunity for marketers.
Blockchain-based applications are nimble enough to deliver on promises of both privacy and transparency. This gives those who value either one — or both — a platform to build upon in Web3. Regardless of which camp a consumer or a company is in, everyone has a full view of every single transaction. And when we say everyone, we mean everyone. Personally identifiable information is encrypted, but a blockchain is truly a living, breathing ledger of transactions for anyone to peruse safely.
This also sets up the perfect foundation for organizations to be transparent about corporate-decision making, supply chains, environmental, social and governance (ESG) decisions, hiring and other such areas valued in today’s society.
Another value-add for both brands and consumers is the advantages of user-generated content (UGC). UGC can increase brand trust by allowing consumers to engage with one another in a true peer-to-peer way. With any two sets of users having access to each other’s ledgers, consumers can see which brands also have consumers with similar personal philosophies about corporate governance and ethics. This can make them more likely to support that brand.
In turn, brands can vet UGC and possibly strike deals with users or influencers with similar values and content in a way that is verifiable and built on trust, not on a sales pitch. Ultimately, transparency leads to stronger relationships, which leads to long-term loyalty.
Related Article: How Is Web3 Decentralized?
Class Dismissed: Is Web3 a Fad or the Future?
As you can see, there are a lot of opportunities as well as lessons to be learned from Web3 — and not only for those at Web3 companies.
There is tremendous potential for brands and consumers to communicate more effectively based on the evergreen lessons Web3 is pushing to the forefront. But getting it right may require a lot of changes for both brands and consumers. Consumers, however, will quickly learn to love the benefits of these models.
So, even though not every company will become a web3 company, every marketer needs to consider how their approach to innovation, education, community and transparency will influence their ability to properly engage with consumers long term.