As we continue to progress into the digital age, a new era of the internet is emerging: web3.
Much of what is (and can be) is up in the air but one question we can try to answer now is what it means for marketers.
Let's break down what web3 is, when it will launch and how it could impact marketers in the short- and long-term.
What is Web3?
Web three, or the third-generation of the internet, is a vision of a more decentralized web that places the power in the hands of users instead of large tech companies like Google, Amazon, and Netflix. It’s built on blockchains using existing infrastructure with the goal to make the internet more accessible, private, and secure for users.
To understand what it is, let’s take a trip down memory lane.
In the late ‘90s, the world was introduced to the first version of the internet. It wasn’t nearly as complex as it is today, with just basic fonts, gray buttons and blue hyperlinks. Very reminiscent of how a website would load today stripped to HTML.
Then, it evolved to Web 2 around 2005, a phase in which consumers could consume content like never before on blogs, and later, social media.
However, as the internet evolved, so did the methods businesses leveraged to market to consumers online. This has led to growing privacy concerns among consumers who are struggling to trust their data in the hands of brands.
Although the FTC has created some guardrails surrounding data privacy, there’s still a lot that leaves consumers wary.
Just look at the evolution of Amazon. What was once an online bookstore has now transformed into a tech conglomerate with its hands in ecommerce, digital streaming, cloud computing, and artificial intelligence.
In a deep dive into the business, comedian Hasan Minaj argued on his Netflix show "The Patriot Act" that Amazon has control over the most important 21st-century commodity: data.
"Data about how we spend our money and what parts of the internet we’re using," he says.
For many, that’s a scary realization. That’s where Web3 comes in.
The goal is that this new iteration of the internet will empower consumers to own and operate tech platforms themselves instead of sacrificing their data by relying on big tech companies.
How would that actually work? Through cryptocurrencies (also known as tokens) and blockchains.
Essentially, when you own a token, you own a piece of the network known as the blockchain. The more tokens you have, the more control you have over the network and the direction it’s headed in.
On a day-to-day basis, tokens would play a role in most, if not all, digital interactions from social media and gaming to digital art and events.
Critics of this approach say it would only be a veiled attempt at decentralization, as the power would still be in the hands of the few with the most money.
When will Web3 launch?
The short answer: We don't know. There have been talks surrounding web3 for years now, but it's still very much in its infancy.
A lot of the infrastructure needed to make it a reality is still being built and there's no set timeline for when it will be completed.
So why the sudden buzz? Well, cryptocurrency is booming right now. In fact, venture capitalists invested over $27 billion in crypto-related projects in 2021, according to an article by The New York Times.
So, this idea of an internet built around it has everyone talking.
How Web3 Could Impact Marketers
1. Limited Access to User Data
In the short term, web3 could mean more data privacy for users.
Currently, companies make money based on the data they collect from users. Either by using it to feed their marketing strategies or by selling it to third parties.
Proponents of web3 believe that a consumer should play a more active role in how their data is used and who they share it with, given the immense value it holds.
Would it make it harder for marketers to collect consumer data? Possibly. It would force marketers to be more transparent with data collection and usage while finding new creative ways to reach their target audience.
2. A More Community-Focused Approach
Web3 is all about redistributing power to the average consumer.
The idea is that consumers will decide and promote the ideas they’re most interested in, instead of being in the passenger seat. With this shift, marketers will have to lean more on building a strong community.
As distrust of brands and how they use data grows, community is more important than ever.
3. More Reliance on Content Creators
Currently, many content creators feel at the mercy of the platforms they publish on with strict guidelines on what they can post to limited earning potential. Web3 would arm them with full autonomy.
In a CMS Wire article, Charlie Neer at MIQ, a leading programmatic media partner, explained this shift.
"Currently, when an individual downloads a song, the creator gets a fraction of the total revenue and the host (think Spotify or Apple Music) makes out like a bandit," said the chief revenue officer. "The same goes for creators on YouTube, Twitch, etc. This is going to rapidly change with the Web3.0 revenue model, and the content creators will be the ones in control."
Of course, we're still a long way off from web3 becoming a reality. However, it's something that marketers need to be aware of and keep an eye on.