The Evolution of Web3 and its Impact on Advertisers
E2 Marketing Solutions
January 18, 2024
The emergence of Web3 has sparked a new era of possibilities and opportunities. As Web3 continues to gain traction, it is imperative for businesses to stay ahead of the curve by implementing cutting-edge marketing strategies that resonate with the decentralized ecosystem. In this latest addition to The Beta Blog, we examine the development of Web3 and unveil strategies to help businesses adapt to this changing environment.
Understanding the Evolution of the Internet
Before diving into how the digital marketing landscape is bound to change, it is crucial to grasp the fundamentals of Web3 itself. Web3 represents the next evolution of the internet, characterized by decentralized technologies such as blockchain, smart contracts, and peer-to-peer interactions. Unlike its predecessors, Web3 aims to foster transparency, ownership, and autonomy by empowering users to take control of their data and assets.
The Darwinism of the Internet
Web 1.0
From the launch of the internet in the 1980’s to the early 2000s we encountered the Web 1.0 phase. Web1.0 consisted of read-only materials focused on disseminating information through static websites built on HTML servers. User personalization and customization was limited to nonexistent.
Web 2.0
From the mid-2000s to present day, technically we are still in the Web 2.0 phase, with Web 3.0 knocking on the door. Web 2.0 brought us read and write capabilities, user generated content (UGC), social media interactions, and greater enhanced user experiences. These new features led to a major increase in user contributions to internet ecosystems. However, Web 2.0 is dominated by centralized platforms such as Meta and Google who harvest and thrive on user data making it the most valuable asset on earth today.
Web 3.0
Still in the incorporation phase, Web 3.0 is emphasizing peer-to-peer interactions, decentralization, and personalized experiences through artificial intelligence (AI). With data transactions and interactions to be conducted by blockchain’s tamperproof technology. Its foundation is visioned on transparency, security, and fair compensation for creators and advertisers which could strip control away from Big Tech.
Defining Web 3.0 vs Web 2.0 Differences
What makes Web3 different from its predecessors? Here are the main foundational elements that you need to know:
Decentralization
Decentralization facilitates peer-to-peer interactions and transparent control by eliminating central authorities such as Meta and Google. Essentially this means no single entity would control data and applications putting users in control of their information. Users can use decentralized applications or (dApps) to achieve a decentralized experience. Imagine your own digital profile and wallet that is owned and controlled by only you.
Semantic Web & AI
An extension of the internet that interlinks information for enhanced comprehension by humans and machines. Technologies such as artificial intelligence (AI) and natural language processing (NLP), in theory, could bring great speed and efficiency to online experiences and have abilities to integrate in our daily lives. Think of your own online personal assistant that loves to lift heavy objects.
Blockchain Technology
A digital ledger that ensures secure, transparent, and immutable transactions across the internet. Data is stored in blocks linked together in a chain and cannot be deleted or modified. The technology is nearly impossible to hack, as we have seen most cryptocurrencies utilize it, however the usage of blockchain is not limited to crypto and its potential is vast. Imagine a major grocery store managing the flow of their inventory in one database. Now imagine that same grocer with separate databases (or chains) linked to each individual product, that’s the difference.
Smart Contracts
Self-executing agreements that eliminate intermediaries in digital transactions. These are powered by blockchain technologies and can greatly simplify business and trade between two parties and eliminate lag time. Imagine a gas pump, once you swipe your credit card and enter your zip code, the pump turns on. In the old days you may have needed to wait for the gas station attendant to turn the pump on. Smart Contracts self-execute once certain logics or terms are met.
Impact of Web3 on Digital Marketing
A shift in digital marketing is brewing, offering opportunities for brands to connect with their audiences in meaningful ways, enhanced security, and smarter automations. Here’s how Web3 could reshape the digital marketing landscape:
Enhanced Transparency
Traditional digital advertising requires the marketer to define their audience and targets as well as create buyer personas to segment their ad campaigns. With Web3 a more honest and transparent ecosystem is primed since users control their own profiles. This leads to more accurate targeting and audience segmentation and the elimination of fraud and bots.
User-Centric Experiences
By empowering users with data control and preference customization, their profiles will be more precise and richer with more demographic and sociographic information. With each user profile being more accurately defined, this enables brands to deliver more personalized experiences better tailored to meet individual needs.
Tokenized Loyalty Programs
With blockchain, crypto, and NFT integrations, leveraging utility tokens and assets becomes a possibility. Brands can incentivize audience engagements and create customer loyalty programs structured around tokenized rewards.
Amplified User-Generated Content
With content creation decentralized and users unbounded from any single social platform, brands can capitalize on user generated content (UGC) to amplify brand advocacy. Think about your favorite influencer and how they create separate feeds on Instagram, TikTok, Twitter, etc. Web3 has the potential to make UGC content extremely efficient.
Automation and Smart Contracts
Web3’s integration with smart contracts allows brands to streamline advertising campaigns through automation, reducing the need for intermediaries. Influencers and affiliate marketers for example could operate on a quicker payment mechanism. Digital campaign creation, placement, and tracking automations could also improve through smart contracts.
Strategies for Success in Web3 Marketing
The first strategy is to stay informed and continually seek knowledge on the subject. Join Web3 communities and news feeds, follow influencers and thought leaders, and attend learning events and tutorials.
Then, think like an end-user. Remember Web3 is built around the user instead of the centralized controls like Google. Users want more privacy while being entertained instead of ads thrown at them left and right. User generated content has exploded and is bound to continue its growth. Step in the shoes of your customer to frame your business around these trends.
You should be exploring changes to your business model and prepping for the Web3 future to come, and here’s how:
Community Building and Engagement
Online communities and how they are structured and function are expected to change with Web3. By fostering dialogue, sharing insights, and incentivizing participation, brands can establish themselves as trusted thought leaders within the decentralized ecosystem. Research and find the Web3 communities within dApps then get involved. Participate with these communities through education, content, and offering interactions with your product. Offer free samples, rewards, or loyalty programs in exchange for promotion of your brand. Practice social listening and respond to feedback and reviews, but also ask for feedback from the communities. Getting engaged creates powerful brand loyalty and buzz marketing plus you will have access to real time insights from your communities.
Search Engine Optimization (SEO)
The fundamentals of SEO will remain the same, but you will need to make some tweaks. Once you’ve acquired a presence within the decentralized communities, be sure to update your website backlinks and incorporate them. You’ve also learned a lot more from these new communities about your target customer and buyer personas. Update your keyword strategy, web content, headers, and descriptions using this new data.
Social Media Marketing & Influencers
As we discussed social media may shift to user centric structures that won’t be bound by singular companies. Find these communities and engage with them, start with the metaverse. Create new processes around your loyalty programs and offer tokenized rewards to users and influencers that reside within the decentralized web space. Use smart contracts to seamlessly execute payouts and keep your affiliates happy.
Pay-Per-Click (PPC) Advertising
Your PPC advertising strategies will also change. With more enhanced user data, you can update your ad goals and create more targeted campaigns. Your keywords will improve with more data and your team should lean towards keywords that target the interests of decentralized users. Decentralization is bound to improve PPC efficiency as well, moving advertisers away from sperate ad campaigns per search engine (Google, Bing, etc.) to a more holistic approach.
Programmatic & Paid Media
As user privacy becomes more restricted and the delivery counts shrink, the cost of running ads increases. This is a lose-lose situation. Rethink your programmatic strategies. Search for solutions that target users on decentralized ad exchanges and move away from traditional DSPs. Continuously focus on services that offer user-based targeting methods rather than platform based. Paid media will function similarly to social media, seek relationships with paid media platforms that use decentralized finance (DeFi) to pay their vendors and users.
Artificial Intelligence (AI)
To connect all the dots, you will want to research and deploy AI solutions to analyze the user behavior you obtain within the decentralized communities. AI can also analyze any blockchain data and processes you are implementing. This tech can lead to more efficient insights around content creation, user preferences, and product offerings to better plan your marketing campaigns.
Summing Up
The evolution into Web3 will not happen overnight. The transformation process is like a vine growing on a brick wall, slow, but it will eventually take up the entire space. Web 1.0 to Web 2.0 was a gradual adoption of new principles and technologies that ultimately encompassed the entire online ecosystem. We are in the early stages of growth with Web 3.0 and once it reaches full maturity it will fully replace what we know of the internet today. Like any new tech evolution, expect Web3 to be stronger, faster, more secure, and more efficient.
It is important for the marketer to stay up to date with new developments surrounding Web3. Start educating yourself and getting involved in new communities, put your stake in the ground. Start planning for changes now and prepare yourself for changes in your digital advertising methods. Working ahead could be a key differentiator that pushes your business well beyond your competition. When Web3 fully arrives, expect the control of the internet to have moved from the advertiser to the user, a change that is not necessarily bad for brands, as long as you adapt appropriately.
At E2 Marketing Solutions we are keeping our finger on the Web3 pulse amongst other emerging concepts and technologies. Look out for more updates as they happen in The Beta Blog on this subject.
E2 offers marketing consultation and specialty services for brands and agencies. If you are looking for information on how to prepare your business for Web3 and/or how to apply new digital advertising techniques, contact us today!