Beyond the hype: How will Web3 impact marketing?
4 November 2022
Web3 is still making headlines even if we could say that the NFT hype is buried and the crypto winter cast a shadow over digital currencies. I strongly recommend reading the Wikipedia entry, to have a better understanding of realities and overpromises of the much praised evolution of the Web (after Web 1.0 and 2.0) so that we can get the balance right and separate the hype from the might-bes.
As a disclaimer, Good Rebels doesn’t sell specific services about Web3, though we are expected to give clients our point of view about risks and benefits and a hype-free outlook on what to expect from these technologies.
The content creator economy.
One of the exciting promises of Web3 revolves around decentralisation and content creators working without intermediaries and gaining control from Big Tech services like YouTube or TikTok. Decentralised Autonomous Organisations (DAOs) could regulate monetary transactions by fan communities, even letting these participate in future profits made by the artists.
Of course, the theory sounds good but remains to be proved. And most probably, new intermediaries will be created. Take Niche, a social media platform created by ex Facebook and Tinder employees and “built with NEAR, a layer one blockchain technology that allows Niche to issue ownership tokens to people who join a specific community. It also allows creators, such as artists or writers or musicians, to issue NFTs representing their work, which group members can buy and resell. Since a DAO is a smart contract, the financial tokens created and exchanged on the platform can be structured so that Niche takes a small cut of sales.”
NFTs and tokens to generate awareness, desire and loyalty.
When I wrote about blockchain and marketing in 2018, NFTs weren’t around but some loyalty programs had already experimented with tokens as loyalty points. Today, the Metaverse hype and the NFTs craze have made clear that combining more hours spent online by users with the ability to identify as unique one —or a set of— digital asset like a song, a piece of digital art, or a limited number of virtual sneakers to wear in a video game could help brands generate awareness, engagement, sense of exclusivity and, why not, loyalty.
Prada launched Timecapsule NFT Collection, a limited-edition physical item and a gifted NFT that is presented on the first Thursday of each month, available for 24 hours on OpenSea (a NFT ecommerce site). A similar project has been launched by YSL Beauty. And in Brazil, Campari has just announced the Campari blockchain, a set of exclusive NFTs that combine experiences (travelling business class to Italy for a cocktail masterclass), with exclusive membership to a community and access to digital art.
Removing the technical complexity of creating NFTs and letting the fans buy without the associated fuss of the crypto world is the promise that startups like Dime.io are making to brands.
The rise of the community, again.
Decentralisation goes in parallel with network and … community. Every crypto project (with or without ICO) taps into a community of fans that embrace, promote and give value to its tokens. The rise of Web 2.0 and social media made community management mainstream inside organisations. Web3 would further encourage brands to create and nurture communities.
Starbucks has just announced Starbucks Odyssey, a project to integrate NFTs with its industry-leading loyalty program at scale. It will allow members to engage in a series of activities, such as interactive games and challenges to deepen their knowledge of coffee and the company itself. A journey stamp (NFT) will be rewarded after completion and limited-edition stamps will be sold. And these stamps could be exchanged and traded by members of the Odyssey community.
Zero Knowledge Advertising: will privacy concerns change online advertising?
Privacy concerns still make headlines, even though we still don’t read fine prints and are ready to give away our data for free. One of the promises of Web3 is to protect “anonymity” (or “pseudonymity”) and make zero knowledge interactions (like a transaction in Bitcoins). Zero knowledge proof is “a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true while the prover avoids conveying any additional information apart from the fact that the statement is indeed true”.
Startups like Profila are trying to apply zero knowledge protocols to advertising exchanges, using blockchain technology to create consensus and proof that users are who they say they are, without giving away their identity. They define themselves as a “Web3 data and relationships platform, delivering value to people and brands, through a private data and content channel.” They’ve already completed a first round sale of their token, the ZEKE, that will compensate internet users who participate in this decentralised ad-delivery system for helping each other keep their identities anonymous, while also reducing ad fraud and the misuse of personal data online by businesses. I recommend watching the video explanation because these are systems that would compete with more well-known attempts in the industry in a cookieless world like Google FLoC or Topics.
Profila incentivises users to see and consume content while earning tokens for it similar to what Brave, a Web3 browser, promotes through its BAT (Basic Attention Token). These browsers are designed to interact with Web3 services and help spread its use removing the crypto hassle for users.
With the promise to do measurement and attribution in Web3, Spindl has just announced its 7 MM $ seed funding. The idea of tracking on a blockchain all the user activity at the top end of the funnel and precisely attributing a final sale to different ad platforms or content creators sounds like magic —near to impossible. Time will tell.
Transparency is the new marketing.
In a paper published two years ago, Deutsche Bank stated that “corporations still struggle to establish trust with consumers, in part because consumers do not perceive them to be transparent. Product development, manufacturing, supply chains, and distribution practices typically remain hidden from consumers.” And they mention companies already using blockchain in their supply chains like Airbus, Carrefour, De Beers, Ford, Nestlé, SAP, Subway, Tyson, Unilever, and Walmart”. Blockchain technologies could help companies in their journey to become more Human-Centred.
And on the user side, projects like Revain avoid fraud in a very sensitive area. A blockchain based review platform with the “ultimate goal to provide high-quality and authentic user feedback on all global products, services and companies”.
Should we start experimenting?
Many of the startups or projects I linked to in this article won’t be around in the near future. Web3 is still a promise and the field of marketing has too many priorities on the table. Private blockchains (like Starbucks Odissey) may make no sense and energy consumption is still an issue. In September 2022, Ethereum migrated from Proof of Work to Proof of Stake to create consensus, claiming to reduce the need of computational power by 99%. But it’s early days and still, why use something as complex as decentralised ledgers for something that it’s private and controlled by a single company?
But experimentation is a must for marketers and some Web3 startups are streamlining the use of these technologies. You may remain sceptical about the crypto revolution, the harbingers of the Metaverse or the real value of a NFT, … but staying put might not be an option either.