Web 3.0 and the future of modern marketing

Renowned management theorist Peter Drucker once said: “The best way to predict the future is to create it.” If we look back at some of the technological advances, geopolitical, societal and cultural shifts, and the environmental and economic shocks that surfaced and permeated the public discourse in 2022, a picture begins to emerge about how a combination of these elements will inevitably shape the future of marketing.

Modern marketing is inexorably shaped by these factors as well as by how these factors influence the behaviours, needs and preferences of our customers. Marketing in 2023 will become even more personalised and customised than before as businesses use data and technology to better understand and meet the needs of individual customers.

Marketing will also continue to become more omnichannel, meaning that marketers will need to consider the full customer journey and the different channels and touchpoints that our customers use to interact with us, across the various stages of their customer life cycle.

Looking at the disruptive technologies that have emerged over the past few years, there are a few that are most likely to influence what marketing looks like in 2023:

1. Artificial intelligence (AI) and machine learning will play an increasingly central role, helping marketers analyse customer data and behaviour, improve targeting, automate tasks and deliver personalised experiences to customers in real time. For example, AI can be used to generate personalised recommendations or to optimise ad targeting based on the discernment of individual preferences.
2. The internet of Things (IoT) enables the interconnectedness between everyday objects, from the smart appliances and wearable devices we buy to the packaging our items are delivered in. Marketers can use the wealth of data generated by IoT to better understand customers’ preferences, behaviour and usage context, and then to create targeted campaigns and post-purchase communications based on this information.
3. Virtual reality and augmented reality technologies are also becoming more important for marketers, as the technology improves and brands find innovative new ways to use these technologies to create fully immersive and interactive experiences for their customers.
4. Influencer marketing on social media channels will continue growing in effectiveness, enabling brands to reach and engage with customers, and will continue to stimulate the rapid growth of social commerce.

Web 3.0

Web 3.0 is the next stage in the evolution of the internet, following on from Web 1.0 and Web 2.0. It’s a term that describes how the internet has expanded into a more interactive, intelligent and interconnected network.

Web 1.0, which grew out of the US defence department’s military communications network in the 1960s, through academic and scientific user communities in the 1970s and 1980s, to more generalised business and commercial applications in the 1990s, was originally designed with a spirit of openness and inclusiveness and made available to anyone who wanted to build on top of it. Commercial applications grew exponentially with Tim Berners-Lee’s invention of the world wide web, which gave anyone anywhere the ability to build their businesses on top of Web 1.0’s open protocols and standards.

Web 2.0, which emerged in the early 2000s, ushered in the meteoric rise of social media platforms, user-generated content, and interactive web applications, which, while still being built on the internet, were also characterised by the move away from the open protocols and standards of Web 1.0 to closed, proprietary and centralised venture capital-funded business models. A handful of these have since become some of the most valuable companies in human history: Google, Apple, Amazon and Meta (Facebook). These tech giants of Web 2.0 have, in most cases, become the de facto intermediaries and gatekeepers of trust on the internet.

The latest evolution of the internet, or Web 3.0, is an emerging set of technologies that include concepts such as decentralisation, blockchain technologies and token-based economics. Web 3.0 is built on top of the open protocols of Web 1.0 while using the building blocks of cryptography, the branch of maths and computer science that studies how to make data tamper proof and therefore fully “trustworthy”.

The true game-changer in this evolution is that Web 3.0 technologies have the potential to “programme trust”, thereby obviating the need for traditional intermediaries and gatekeepers across many industries. In other words, Web 3.0 technologies are designed to build “trustless” applications that don’t require human intervention and that therefore enable human co-operation and commerce at an unprecedented scale.

Web 3.0 has the potential to transform the way businesses operate and interact with customers. As marketers we need to understand this because it represents a significant shift in the way our customers will use the internet. By being early adopters of Web 3.0 technologies, marketers can improve both the effectiveness and efficiency of their marketing efforts and build stronger relationships with customers.

The value of decentralisation

Decentralised systems are the foundation of Web 3.0 technologies. A bitcoin white paper published in 2008 introduced the concept of the “blockchain” — a secure database, distributed across thousands of computers worldwide, which requires no single “authority” to control the database or to verify the authenticity of the data.

But while the first use case for this innovation was a “peer-to-peer” digital payments system that could offer fully secure and transparent transactions without needing banks to intermediate them, the underlying blockchain technology gave the world two unique capabilities:

• A way to agree on the contents of a database without anyone being “in charge” of the database; and
• A way of rewarding people for helping make that database more valuable, without them having to be employees or shareholders of a commercial enterprise that owns the database.

In 2014, ethereum expanded the capability of the blockchain beyond just being a database for digital money into what can best be described as a decentralised, collectively owned, global computer with independent programmes running on top of it.

Once committed to the blockchain, these programmes execute themselves and run without anybody controlling them. They act as secure, enforceable agreements or “smart contracts” between complete strangers, that are tamper proof and therefore don’t require an external authority to oversee the action they initiate, and they don’t even need to know the identities of the individual contracting parties.

For the first time this introduced the ability to programme trust. It has also paved the way for the development of commercially viable, open protocol-based applications that have now been replicated and expanded upon in thousands of new systems.

How Web 3.0 technologies will add value to business

In enabling the execution of “trustless” interactions, there are a number of value drivers that Web 3.0 technologies bring to business:

1. Supply chain transparency: The blockchain can be used to create a transparent and completely traceable supply chain, which, among other more obvious business benefits, allows marketers to demonstrate the origin and authenticity of their products to customers. This can be especially valuable for companies that sell environmentally or socially responsible products, as it allows them to provide customers with greater transparency and reassurance.
2. Increased security and data privacy: One of the main benefits of using decentralised technologies is that they offer vastly improved data security and privacy capabilities compared with traditional centralised systems, which have proved to be more vulnerable to data hacks. This can be particularly important for businesses that handle sensitive customer data, such as personal information or payment details. The blockchain can be used to securely store and manage customer data, helping marketers comply with data protection regulations.
3. Greater trust through transparency: Decentralised technologies can introduce more transparency, thereby increasing trust in marketing activities — be it by verifying the authenticity of customer reviews or by tracking and validating the authenticity of micro-influencer reach and interactions, giving brands more confidence in investing in influencer marketing campaigns.
4. New opportunities for engagement and loyalty: Because of their built-in incentive mechanism, decentralised technologies are ideal tools to enrich traditional loyalty and rewards programmes. They can help track customer interactions, create more transparent and trustworthy brand experiences, and recognise and reward customers with tokens or other digital assets based on their levels of engagement and loyalty.

Two of the most accessible Web 3.0 applications that marketers have explored over the past year are nonfungible tokens (NFTs) and the metaverse.

NFTs

NFTs are tokens that represent unique, one-of-a-kind digital assets. The opposite of an NFT is a fungible token like a R100 note, which represents the identical monetary and utility value, and is therefore fully exchangeable for any other R100 note. NFTs are in fact smart contracts that govern the ownership and copyright of a nonfungible asset and so can be used to authenticate and verify the provenance of digital assets such as art, music, and collectibles.

NFTs can be used in marketing in a number of ways, including:

1. Authenticity and scarcity: NFTs can be used to create a sense of scarcity and exclusivity in campaigns, which can be very attractive to consumers.
2. Personalisation: They can also be used to create personalised and unique digital assets or experiences for customers, such as custom artworks or digital collectibles.
3. Engagement: They can incentivise customers to participate in interactive and immersive brand experiences and engage more fully with marketing campaigns.
4. Customer data: NFTs can be used to gather data on customer behaviour and preferences, enriching campaign targeting as a result.

The metaverse

The second type of Web 3.0 technology that marketers have been exploring is the metaverse, a range of immersive virtual world environments that can deliver:

1. Virtual events and experiences: Many businesses and organisations are using the metaverse to host virtual events and brand experiences such as concerts, conferences, and trade shows. These events offer a unique and immersive way for businesses to engage with their customers and showcase their products or services.
2. Virtual storefronts: Certain metaverse environments allow businesses to create virtual storefronts or branded showrooms, where customers can browse and purchase products or services in a virtual environment.
3. Advertising and branding: In other virtual worlds or gaming environments, businesses can create branded virtual spaces or branded objects that users can interact with in the 3D world, or they can place brand advertising in high-traffic areas within the metaverse.
4. Customer engagement: Brands can create interactive games, competitions or challenges that users can participate in within the metaverse, or they can offer personalised experiences or recommendations based on user behaviour.

Overall, the metaverse offers a number of opportunities for marketers to engage with customers and showcase their products or services in a unique and immersive way.

So what’s the bottom line?

It can be difficult to quantify the return on investment (ROI) of decentralised systems, as it will depend on your specific business objectives. Some potential ways for ROI to be generated from decentralised systems include:

1. Cost savings: Over the long term decentralised systems can help businesses reduce costs by eliminating the need for intermediaries and reducing the overheads associated with maintaining centralised systems.
2. Increased efficiency: They can also increase efficiency by automating certain processes and reducing the time and resources required to complete tasks.
3. New revenue streams: Decentralised systems can create new revenue streams for businesses by offering value-adding services to other businesses or to individuals engaging with them.
4. Improved customer experience as a result of lower cost and more efficient value delivery can also lead to increased revenue and ROI. Decentralised systems can help improve customers’ overall perception and willingness to do business with your brand by offering increased security, transparency, and personalised experiences.

It’s still early

The opportunities for using Web 3.0 technologies in marketing are still in their infancy, but certain brands are showing substantial returns for becoming early adopters in this space. It’s becoming increasingly important for marketers to stay ahead of the curve and take advantage of the opportunities that these technologies offer.

The one thing we can be certain of as we enter 2023 is that the year ahead will be filled with challenges on many fronts — many of which will be outside our control. Web 3.0 gives us a set of tools we can employ to improve the effectiveness and efficiency of our marketing efforts and build stronger, more long-lasting relationships with customers. That has to be worth exploring.

The big takeout: The opportunities for using Web 3.0 technologies in marketing are still in their infancy but are worth exploring.

Luisa Mazinter is chair emeritus of marketing trade association, MMA and a member of the MMA’s EMEA board. She is chief growth officer of Mesh.Trade. She is a former chief marketing officer of TymeBank.