By Erick Sigmond + Monty Lack
Judging by the headlines about AI, it would appear that adland has moved on from Web3, last year’s shiny toy. We sure don’t deny the importance of AI, but marketers should not take their eyes off Web3. It remains a vital frontier for brands that want to be on the forefront of culture. Brands that were only in Web3 for the hype moment are now exposed as such, while those with commitment to the community have a more interesting opportunity. But there’s another reason the less determined brands moved on: Web3 marketing is hard.
Even marketers who are champing at the bit to activate in the world of Web3 have to overcome obstacles to get executive and legal teams comfortable enough to move beyond the initial activation and into the execution of a long-term Web3 strategy. Here are some of the main areas of difficulty, and how we think about them.
For brands to truly maintain a connection with a Web3 audience, they not only need to understand the community, but they also need to make meaningful contributions to it. There is an important difference between owning the community and enabling the community. To create cultural resonance within the Web3 space, we must rewire our marketing brains away from trying to create ownable communities to enabling communities that share in our success.
Enabling the community can come in many forms, but the key questions to ask ourselves as marketers trying to make an impact with this audience is, “What value will this provide to our audience?” And, “Will this value last longer than just a brief moment in time?” Whether it’s a wearables release, digital collectibles drop, or interactive experience—providing lasting value is imperative to maintaining a connection with this audience.
If executed correctly, your first Web3 activation can and should lay the foundation for a long-term strategy to continually interact with a highly engaged audience in an innovative way. The tech that is powering this space has the potential to change the way brands view customer loyalty and consumer engagement as a whole, because it has the ability to foster ongoing relationships with consumers that are rewarding for them.
Perhaps one of the biggest challenges brands face in maintaining a connection with a Web3 audience is the community itself. The vision for the next iteration of the internet is one that takes power and control of consumer data out of the hands of big tech and corporations and places it back with the user—giving them autonomy and control of what is rightfully theirs. Sure, brands need to work closely alongside the Web3 community to ensure they are developing activations that resonate with them, but they also need to be cautious about what they’re asking from users in return.
The allure of Web3 for many in the community is that it is decentralized and that there isn’t a singular governing body. Rather, it is fueled by those who use it, those who want to push the technology forward, and those who believe in a more transparent, open, and inclusive internet. It is not uncommon for users to use aliases or multiple wallet addresses to conceal their IRL identities or keep certain aspects of their lives off of the internet completely.
For these reasons, approaching the Web3 audience should be about fostering a relationship with them, even if the individual is only identifiable by their wallet address. The inclination to look at Web3 as an opportunity to build upon existing first party data must be resisted.
The decentralized nature of Web3 means that the individual identity has control over their data—including where it’s stored and how brands can use it. In fact, shifting control of the data exchanged over the internet from big technology companies to those who use it was part of the vision for Web3, and a key part of its appeal. The Web3 audience is anti-data collection and storage.
The centralized nature of Web2, on the other hand, means that an organization manages consumer data on their behalf with the expectation that the organization clearly discloses how that data is being collected and how it will be used. Moreover, many countries have laws requiring that an organization grant on-demand access to how their data is being used, and also the ability to “forget” them if the consumer asks to be removed from their system. Failure to comply can result in hefty penalties and fines directed at the organization. These laws designed to protect the consumers right to their data in the Web2 world are also currently applicable to the Web3 world.
While we, as individuals, love the idea of being able to take back our data and decide who can monetize from it, we’re also clinging to our expectation of brands to provide us personalized, relevant and meaningful content and experiences, which requires brands to know their end-user i.e. capture personalized data.
How to resolve this tension? Outside of major law, technology and industry changes, we’re going to be required to find a middle ground between the two worlds—a Web2.5, if you will, which at a high level operates on the following:
- Clear disclosure about why an organization is capturing consumer data
- Consumer consent to capture, collect, and use data is required
- Tools and resources for the consumer to manage their data are easily and readily available
- Organizations follow a hybrid model of decentralizing the consumer’s preferences and centralizing the consumer’s data to conform with Web3 expectation and privacy laws
TO BE CONTINUED
In Part 2 of this series we will tackle more regulatory issues, including smart contract enforcement, regulating tokens as securities, and interoperability.
Erick Sigmond is Sr. Director of Brand Experience Strategy at TMA. Monty Lack is Sr. Director of Interactive Activation. Both are based in Dallas.