Eye on AI - June 24th, 2022
Welcome to Aigora's "Eye on AI" series, where we round up exciting news at the intersection of consumer science and artificial intelligence!
This week, we’ll be looking at the importance of Web3 and why right now may be the best time for marketers to incorporate Web3 into their marketing strategies.
How Businesses Can Incorporate Web3 Into Their Marketing Strategy
With crypto in the midst of a cooling period, some industry experts believe now is the best time for marketers and business owners to adopt Web3 marketing strategies and enter the space in earnest. This may seem counterintuitive. Yet according to the article “How to incorporate Web3 into your marketing strategy,” the same trends we’re experiencing today were seen just before a similar period in the early 2000s: the transition from Web1, or read-only web, to Web2, or the platform-based web.
“... many of us who had a hand in building Web 2.0 marketing and navigated the origins of that massive paradigm shift, when the tools were still new, are recognizing the early seismic activity of Web3 for what it is: the next inflection point,” writes Medium contributor Jonathan Sadlowe. “Where those who seek to shape the frontier of Web3 marketing will have to develop a new strategic framework, and adapt to new tactics and tools that will bring our fundamental understanding of marketing to bear in wildly new ways.”
To understand these common trends, it’s important to first understand the differences between Web1 and Web2. Simply put, Web1 was the first version of the internet, where web pages were read-only and advertising was largely done through print or television (there were no digitally targeted ads). Web2, by contrast, is the current version of the internet, its second iteration, and is reading and writing based (i.e I can read content, but I can also create my own and engage with others). Web2 was created on the backbone of platforms like Facebook, Amazon, Apple, LinkedIn, etc., which users must engage with (and share their data with) to read/write content. Looking at the global ad spend chart in Sadlow’s article (click on the article and scroll down a bit), you may notice how print advertising spend peaked just before the recession, with television advertising spend peeking around 2012 when many Web2 platforms were just beginning to utilize their data for ad targeting as they went public. You can see also in the chart how social media’s advertising spend rose as television/print advertising fell.
However, print and television advertising spend haven’t gone away. And platform-based marketing (especially search marketing) isn’t likely to go away any time soon, either. What has changed our recognition of the value of our personal data, and when Web2 platforms abuse it. Social media platforms, for example, are hemorrhaging users (Facebook is set to lose over 1.4M users this year), with younger generations more attune to the value of their personal data already seeking out decentralized platforms to maintain their anonymity. It is within that environment that Web3 is beginning to take shape.
“Web3 is a new iteration of the Internet built around blockchain technology — an ecosystem that includes pillars like Cryptocurrencies, NFTs, DAOs, DeFi, DApps, and the Metaverse,” continues Sadlowe. “These pillars leverage concepts like peer-to-peer networks, decentralization, wallets, smart contracts, open-source development, and token-based economics. That might be a lot of new vocabulary for some, but suffice it to say that a new suite of technologies are restructuring digital ownership away from centralized middlemen like Facebook and to the individual.”
Sadlowe’s theory is that marketers who leverage this cultural shift now will be rewarded in the future with more direct and valuable relationships with their customers and communities. That means moving away from the Web2 middlemen onto Web3 platforms that promote individual data ownership, community governance, and privacy.
The New Tools of Web3, and the 4 Phases of Web3 Marketing Success
If you’re still a bit confused, generally speaking, Web3 refers to the ecosystem of new, fast-growing technologies that are being used to build Web3. Cryptocurrency, NFTs, the metaverse, blockchain, Decentralized Autonomous Organizations (DAOs), and Decentralized Applications (DApps) are all a part of it.
“The common thread of these technologies is the ability to restructure ownership, provide new incentives for participation, and enable communities to organize and flourish,” continues Sadlowe.
From a marketing perspective, you don’t need to engage with all of these technologies to participate in Web3. You can begin by working with those that make the most sense for your brand. And for heaven’s sake, don’t abandon your Web2 strategy! Web2 and Web3 marketing aren’t mutually exclusive – print and television ads are still around, and Web2 digital ads will remain for the foreseeable future. The Web3 shift is more community-based, where users share their data with those brands that give them value. For marketers looking to create these types of communities, Sadlow believes strategy should be broken down into four phases:
Creators (or brands) leverage storytelling to set an inspirational vision
Incentivize participation (financial, experiential, or social)
Facilitate the alignment of community values using Discord, participating in IRL events, or through bottom-up emergent leaders (and memes) within the community
Reward community members for participation to propel community growth
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