Outlier Ventures What pain points does the Web3 marketing model solve?

What pain points does the Web3 marketing model solve?

Author | Lucian Urbach, Outlier Ventures

Translation | Cecilia, bfrenz DAO

When mentioning “Web3”, people often associate it with keywords such as blockchain, Bitcoin, Ethereum, DeFi, and NFT. Although there are still many people who are not familiar with this field, it has become commonplace for a group of people.

In the past decade, the entire industry has gradually established itself and is challenging and changing many aspects of our daily lives. Whether for beginners or industry experts, there is a common key point, which is Web3 marketing. Although not going into details, Web3 marketing and advertising have always existed, but recently it has reached a stage that opens up a brand new industry beyond Web3. In this article, we will delve into this situation and how to help projects acquire more users and promote the mass adoption of Web3 applications.

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By observing the current state of marketing, we can find that Web2 marketing has become an indispensable part of today’s business world, and it is difficult to imagine what it would be like without it. However, for various reasons, the current marketing model is gradually losing its effectiveness. Intense competition, ineffective advertising, ad blocking, algorithm gaming, and closed ecosystems (also known as “data islands”) make it difficult for founders to motivate and attract target audiences.

Web3 marketing takes a different approach and can solve the problems currently existing in the Web2 marketing model. Web3 marketing is not aimed at the general public, but adopts a “user-centric” approach, leveraging the entire ecosystem rather than just a small portion of users hijacked by algorithms, sharing ownership and output value, and providing a unique experience.

Thanks to the now increasingly complete infrastructure, project teams, founders, and marketing personnel can better understand their target audience (because Web3 marketing has bidirectional interaction), thus achieving cost-effectiveness and business growth, and helping to retain more customers.

This article is from the US Web3 VC Outlier Ventures, which introduces the differences between Web2 and Web3 marketing models and lists why the latter helps founders better grasp their customers.

What is the marketing model of Web2?

Web 2.0 marketing refers to the use of interactive web-based platforms and social media to promote products or services online. Common Web 2.0 marketing strategies include creating interesting social media content, building online communities around brands, using influencer marketing, utilizing user-generated content, and using targeted online advertising. Overall, Web 2.0 marketing focuses on building a strong online presence, promoting customer engagement, and having valuable interactions with customers to drive business growth.

How is Web3 marketing different?

To understand the difference between the two, the best way is to compare their marketing portfolios. Web2 marketing is not user-centric but widely targeted at the general public, lacking the motivation to attract user participation.

Web3 marketing is user-centric, aiming to establish sustainable customer relationships, increase interactions, and ultimately create mutually beneficial value. This relationship is achieved through shared ownership, uniqueness, culture, and incentives.

One reason for the above differences is the technological limitations of Web2. Web2 can be categorized as “one-way interaction,” with customers mostly limited to receiving information, while Web3 allows customers to interact with brands, forming “two-way interaction.” The following image once again reviews the differences between Web 1, 2, and 3.

Web3 marketing offers many exciting opportunities for businesses, founders, and marketers, differentiating them from traditional Web2 marketing models. We have listed some advantages, which are also opportunities:

– Decentralization: Web3 is built on decentralized technologies, providing greater transparency and security in marketing activities. This is particularly important in areas such as data privacy, preventing ad fraud, and consumer trust.

– Immersive experiences: Web3 technologies such as virtual reality and augmented reality can provide consumers with more immersive and engaging experiences, enabling projects to host more impressive and influential marketing campaigns.

– Micro payments: Web3 technologies can facilitate micro payments and revenue models based on micro payments, such as pay-per-action or pay-per-view. This provides businesses with greater revenue opportunities while giving consumers more control over the content they consume, and also allows them to earn income through small but frequent micro transactions.

– User ownership: The core concept of Web3 includes user ownership, allowing consumers to truly own their own data, identity, and online assets. This creates new marketing opportunities for companies that focus on user empowerment and incentives.

– Community building: Web3 technologies such as decentralized social networks can create more engaged and invested product and brand communities, enabling businesses to establish deeper relationships with customers.

– On-chain data analysis: Due to the transparency and availability of blockchain technology, data analysis can be conducted throughout the ecosystem. Marketers are no longer limited to the company’s database but can access all relevant data without identity issues. This instantly increases the amount of data available for user analysis.

In summary, the greatest opportunities of Web3 marketing are focused on the unique characteristics and advantages of decentralized technologies, such as transparency, personalization, and user empowerment. Web3 marketing addresses some pain points faced by Web2 marketing, particularly in customer engagement, loyalty, analysis, ownership, and data availability.

Marketing Insights Learned from Web3

As mentioned above, the Web3 marketing model solves various pain points of the Web2 marketing model. We will now list some specific use cases and examples of companies that have already implemented this technology.

01. Loyalty Programs

– Personalized Rewards: In Web3, users can confirm their identity by logging in with their wallet and demonstrate loyalty to a brand through a special token (NFT) issued by the brand. In return, they can share some information and receive special benefits, such as early access to products or invitations to new product launch events.

– Liquidity and Value Accumulation: If a loyalty program is well-designed, it will have inherent value that can be monetized or sold.

– Gaining Key Insights through On-chain Analytics: On-chain analytics provide detailed real-time analysis. Marketers can obtain accurate data on advertising campaign performance, conversion rates, user engagement, and customer behavior. These insights are highly reliable as they are recorded directly on the blockchain, unaffected by manipulation or discrepancies. These insights enable marketers to optimize strategies and make data-driven decisions.

– Measuring Engagement Instead of Sales Revenue: Web3 loyalty program users are unique individuals, each with distinct behaviors, consumption patterns, activity levels, and redemption data. Studies have shown that users who participate in such loyalty programs consume 25% more than those who do not. By measuring granular engagement data through Web3 technology, a deeper understanding of who is active and who is not can be gained compared to traditional metrics such as consumer and membership numbers. This approach is also applicable to traditional industries.

02. User Engagement Incentives

– CaaS (Community-as-a-Service): A new service that focuses on building and managing communities for other companies. For example, Tribally provides community services for Axie.infinity, including roadmap planning and day-to-day operations on platforms like Discord and Telegram.

03. Practical Utility: Digital Twins of Real Products

– Gift vouchers that can be exchanged for real products

– Secondary product markets based on proprietary NFT technology

04. Social Utility

– Using NFTs as membership cards or event invitations

05. Digital Utility

– Wearable devices for a single brand

– Wearable devices for multi-brand or cross-brand collaborations

Conclusion

Web3 marketing can solve many of the problems faced by Web2 marketing. The centralized, closed ecosystem, data privacy issues, generic advertising, lengthy onboarding processes, information overload, and declining user experience have rendered Web2 thinking outdated in many fields. Many companies (not limited to Web3 native companies) have recognized this issue and are incorporating Web3 technology into their product portfolios to maintain a competitive advantage.

As non-Web3 users can now easily use Web3 technologies, such as Web3 marketing models, the demand from traditional institutions will also increase. However, the mass adoption of applications will not happen overnight, and it will take time and support from early Web3 adopters.

Frankly speaking, the current market can be referred to as Web 2.5, and new marketing models based on Web3 technologies and concepts are just beginning to be applied, with the ultimate goal of attracting the next billion users.

Reference

Is Web3 effectively solving the problems in Web2 marketing? 

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