We are seeing the early days of Web3, which has enormous disruption potential attributed to the inherent properties of blockchain like decentralization, immutability, security and transparency. Today, Web3-enabled enterprise use cases exist across supply chains, payments, loyalty programs and IoT.
However, use cases relating to the management of personal data (e.g., marketing, managing patient records, etc.) have not yet hit a critical mass of adoption. As blockchain's peer-to-peer transmission model gains adoption, it can enable frictionless value exchange to reduce the economic power and influence of intermediaries as consumers own and control their personal data. All of this can have a profound impact on marketing and its Web3-enabled future.
Web 2.0 transactions have costs associated with them; credit card companies can charge merchants fees of 2% to 3%, while marketplaces charge listing, advertising and transaction fees. These transaction costs and intermediary-imposed fees are passed to the consumer, increasing the cost of products. Blockchain's disruptive potential can help reduce these fees to a small fraction of what they are today.
Many marketers pay third parties like Facebook to access customer data, but blockchain could allow brands, advertisers and enterprises to leverage micropayments as a tool to access personal information directly from consumers. Online stores or brands could incentivize consumers to install apps, claim NFTs and enable location tracking for browsing or purchasing through loyalty rewards. They can also push hyper-personalized deals and offers directly to the wallet or NFT owner automatically via smart contracts as they consume targeted ads or click commercial emails.
The past decade has created powerful intermediaries like Google and Facebook that dominated the internet and controlled the underlying economics. Web3 and blockchain can be used with website ads to compensate consumers for watching ads and views.
Ads and pop-ups contaminate the user experience through intrusive means, driving many users to install ad blockers. In the U.S., 40% of internet users use ad blockers, which adversely affects the industry. Web3 can help marketers recapture some of this leaked and lost revenue. The adoption of Web3 could dethrone Google and Facebook as the rulers of internet marketing.
Traditional keyword-based search will likely coexist with ChatGPT and blockchain-driven business models but will lose its prominence, splitting the share with more equitable models where consumers and users are empowered.
Web3 can reduce spam by intruding in fraud verification, which could drastically lower the number of mass phishing scams. Spam and phishing are the major inhibitors of marketing effectiveness—according to Harvard Business Review, 135 billion spam emails are sent every day (48% of all emails). Introducing blockchain can add several benefits to the entire marketing ecosystem.
• Spammers can be dissuaded due to the high cost of execution.
• Companies can make marketing funnels efficient by identifying consumers willing to engage with them directly.
• Consumers can pay small payments (e.g., one-cent equivalent) to read articles, defeating DDoS attacks.
• Blockchain can make it difficult for bots to fake social media accounts to drive fake news or misleading content.
According to Statista, $81 billion was lost to ad fraud in 2022. This number is projected to reach $100 billion in 2023. Web3 can track, trace, automate and attribute the flow of dollars transparently.
Web3 is becoming synonymous with the ownership economy, as it can enable content owners to own, track, protect and monetize their content. This also applies to companies, as they enhance copyright protection, improve quality and reduce IP theft. Other than leaked revenue and expensive lawsuits, creators do not have many options to counter ownership problems today. As Web3 proliferates and gets adopted, companies and creators can instantly receive payments for clicks and views via smart contracts.
Even where the collection of data or content is a necessity, micropayments can help defeat the purpose of ad-blocking software, and individuals can control what data gets shared, how much of it gets shared and with whom they share it. Users and creators can be rewarded directly for sharing their data in return for their attention to click or watch ads. New tools like Brave browser and Opera have embedded this in their default versions, allowing users to be paid in Basic Attention Tokens (BAT).
Web3 can benefit brands, enterprises and consumers as they adapt their behaviors and business models. Individuals can control how they share and monetize their personal information and which ads they will interact with. Introducing micropayments and loyalty rewards in exchange for attention and engagement will also increase the cost of spam, making it unsustainable.
The reduction of intermediary spending and spam reduction will result in higher-quality traffic and data about consumer behavior for companies. Smart contracts can automatically assign higher or lower values to customers based on their relevance.
Companies such as Starbucks, Nike and Gucci have invested in Web3 initiatives with dedicated staff. Chief digital officers and chief marketing officers must work together to enable a better and transformed internet through Web3 by unlocking new layers of transparency and trust. The reinvention of Web3-enabled trust can be embedded into digital products and services directly connected with their consumers.
Web3 has the potential to remove frictions from payments and lower the cost of transactions, which could diminish the power of all intermediaries on the internet. CMOs can recapture revenue lost to opacity and intrusion (ad blockers) by incentivizing consumers directly, establishing relationships with them and exchanging value (e.g., wallets and smart contracts).
Web3 can also solve two big existing problems plaguing digital advertising today—attribution and ad fraud. Other favorable outcomes for Web3 and marketing include reduced spam, improved social media identity verification, monetizing digital content and preventing denial of service attacks. Blockchain and Web3 should unleash a trusted, transparent and cheaper method of internet marketing.
(Copyright：Forbes Transforming Enterprise Marketing With Web3 (forbes.com)