Does Web3 effectively solve the problems in Web2 marketing?

Written by: Lucian Urbach Compiled by: Deep Tide TechFlow

The most common terms associated with Web3 include Blockchain, Bitcoin, Ethereum, DeFi, and NFT. For some, these terms remain uncharted territory, while for others they are commonplace norms.

Over the past decade, an entire industry has been established that is currently challenging and transforming many aspects of our daily lives. One thing that both newcomers and industry experts have in common is Web3 marketing.

Without getting into the details though, marketing and advertising in Web3 has been around for a while, but has recently reached a stage where it has created a whole new industry beyond Web3. In this article, we’ll dig into why this is the case, and how it (facilitating the next wave of adoption) can help founders boost user acquisition.

From the current state of marketing, Web2 marketing has become such an integral part of today's business landscape that it's hard to imagine what it would be like without it.

However, the traditional Web2 marketing model has lost its effectiveness for a number of reasons. These reasons include fierce competition, ad blindness, ad blocking, algorithms, and closed ecosystems (i.e. data silos). Because of these issues, founders have trouble engaging and motivating their target audience.

In contrast, Web3 marketing takes a different approach to address the issues facing Web2 marketing.

Web3 marketing is no longer just about the mass market, it puts the user at the center. It leverages entire ecosystems rather than single data silos, enabling shared ownership and value, and delivering unique experiences.

Companies, founders, and marketers are now better able to understand their target audience, thanks to the support of underlying technology. Through two-way interaction, they are able to engage more deeply with users, resulting in cost-effective business growth and improved customer retention.

What is Web2 Marketing?

Web 2.0 marketing refers to the use of interactive web-based platforms and social media to promote a product or service online. Common Web2 marketing strategies include creating compelling social media content, building an online community around a brand, leveraging influencers, leveraging user-generated content, and leveraging targeted online advertising.

Overall, Web2 marketing is focused on building a strong online presence, driving customer engagement, and having valuable interactions with customers that drive business growth.

How is Web3 marketing different?

A good way to understand the difference between Web2 and Web3 marketing is to compare their marketing mix.

• Web2 marketing is not user-centric, but mass-oriented, lacking incentives to engage users.
• On the other hand, Web3 marketing is user-centered, aiming to establish customer relationship and interaction, and realize the creation of mutual value. This relationship is fostered through shared ownership, uniqueness, culture and incentives.

One of the reasons for the above differences is the technical limitations of Web2. Web2 can be categorized as one-way engagement, where customers are mostly limited to receiving information, whereas Web3 enables customers to interact with their brand.

How does Web3 marketing solve the problems of Web2 marketing?

Web3 marketing offers many exciting opportunities that can differentiate businesses, founders and marketers from traditional Web2 marketing approaches. Here are some of the biggest opportunities:

• Decentralization: Web3 is built on decentralized technology, which can provide greater transparency and security in marketing activities. This is especially important in areas such as data privacy, ad fraud prevention, and consumer trust.
• Immersive experiences: Web3 technologies such as virtual reality and augmented reality can provide consumers with more immersive and engaging experiences, enabling businesses to create more memorable and impactful marketing campaigns.
• Micropayments: Web3 technologies can facilitate micropayments and micropayment-based revenue models such as pay-per-action or pay-per-view. This can provide businesses with greater revenue opportunities, while also giving consumers greater control over the content they consume and the revenue they earn through microtransactions.
• User Ownership: Web3 enables user ownership, allowing consumers to own their data, identities and online properties. This can create new marketing opportunities for businesses that focus on user empowerment and motivation.
• Community building: Web3 technologies such as decentralized social networks can create more active and engaged communities around products and brands, enabling businesses to build deeper relationships with customers.
• Analysis: Due to the transparency and data availability of blockchain technology, data analysis can be applied to the entire ecosystem. Marketers are no longer confined to corporate data centers, but have access to all data.

Overall, the biggest opportunities for Web3 marketing center on the unique capabilities and benefits of decentralized technologies, such as transparency, personalization, and user empowerment. Web3 marketing addresses some of the pain points that Web2 marketing faces, particularly around customer engagement, loyalty, analytics, ownership, and data availability.

What else can be done?

As mentioned above, Web3 marketing addresses various pain points of Web2 marketing. The list continues below with some use cases and companies that have already implemented this technology.

Loyalty Program

• Personalized Rewards: In Web3, a user's wallet-based login verifies the user's identity and establishes proof of their loyalty through a brand-issued NFT. They then share the information in exchange for offers such as early access or invitations to launch events.
• Liquidity and value accumulation, i.e. if a loyalty program is good then it will have intrinsic value and can be monetized/sold.
• On-chain analysis insight: On-chain analysis provides detailed and real-time analysis data. Marketers can get accurate metrics on campaign performance, conversion rates, user engagement and customer behavior. Since the data is recorded directly on the blockchain and cannot be easily tampered with or diverged, the data is highly reliable. These insights enable marketers to optimize strategies and make data-driven decisions.
• Measuring engagement not sales: Since there is no interchangeability between Web3 loyalty program members, each member has unique behavioral and spending attributes, activity levels and redemption data. Research shows that highly engaged loyalty program members spend 25% more than inactive members. Measuring granular engagement data through Web3 technologies can provide more insight into active and inactive users than just traditional metrics like spend and membership numbers.

Customer Engagement

• CaaS (Community as a Service): A new service aimed at building and managing communities of other companies. For example, Tribally provides Axie.infinity with community services ranging from roadmaps to day-to-day operations such as Discord and Telegram.

Physical Empowerment: Digital Twin of Physical Products

• Gift vouchers redeemable for real products;
• NFT driven secondary product market.

Social Empowerment

• NFT as membership card or event invitation

Digital Empowerment

• Wearable devices of a single brand; *Multiple or cross-brand collaboration wearables.

in conclusion

Web3 marketing can solve many of the problems that Web2 marketing faces. Centralization, closed ecosystems, data privacy concerns, generic ads, lengthy onboarding processes, data overflow, and degraded user experience have made Web2 obsolete in many areas. Many companies have recognized this issue and are starting to incorporate Web3 technologies into their product portfolios to maintain a competitive advantage. Institutional demand is expected to grow as non-Web3 users now have easy access to Web3 marketing tools. However, adoption won't happen suddenly, it will take time and support from those already involved with Web3.

This is a market in itself, known as Web2.5, where marketing is just getting started and will help attract the next billion users.