web3 - What Is It and Why Should Marketers Care?

The Internet has come a long way since its inception. From browsing directories on Yahoo in web1 to Google, Facebook, and Twitter, letting you input your searches, whereabouts, opinions, etc., the only thing constant about the Internet is that it is constantly changing (for better and for worse).

The critical difference between web1/web3 and web2 is the nature of the technology is the open-source nature of the technology. Chris Dixon from a16z summarizes it best here:

What is Web3?

All web3 is is that it is the next generation of the Internet. It is built on the blockchain, allowing for secure, transparent, and decentralized user interactions. web3 is built on a decentralized network that users own and operate. This means that web3 applications are not owned or controlled by any single entity but rather by the community of users interacting with them (a stark contrast from our current web2 overlords).

Web3 is not just about cryptocurrencies and NFTs. It's a more comprehensive concept that includes decentralized applications (dApps), smart contracts, and decentralized finance (DeFi) protocols. These applications are built on decentralized networks and are not controlled by any central authority or company. Their architecture makes them more secure and transparent.

How does this affect the Marketing industry?

Web3 presents several opportunities and challenges for marketers. Here are some reasons why marketers should care about Web3:

The persona of the early web3 adopter

web3 is attracting a new audience of tech-savvy users who value privacy, security, and decentralization. These users may have different preferences, behaviors, and expectations than traditional users, and marketers need to understand what the brand stands for to engage them effectively.

New Revenue Streams

Web3 introduces new revenue models, such as tokenized commerce and micropayments. Marketers can help brands monetize their content, products, or services using these models and create new revenue streams for their businesses instead of being traditionally considered a cost center to the business.

New Challenges

• web3 is incredibly complicated to the average user: It is not straightforward how to get started with any project in web3 and leaves a lot to be desired from an education perspective. I expect companies like Coinbase, Ledger, and other web3-native companies to lead here.
• Lack of adoption on both the brand and user sides: The lack of “case studies” or platforms that credible institutions have vetted.
• Stay up-to-date with the latest developments, collaborate with experts, and experiment with different approaches to navigate these challenges.
• Lack of opt-ins by users - Giving more ownership to people with their identities (whether real or pseudonymous) might limit personalization that will allow marketers to further segment/effectively communicate to their audience.

Web3 is the future of the Internet, despite how many critics quickly judge and dismiss it. As more businesses, developers, and marketers embrace Web3 and experiment with new opportunities, they will reap the rewards and reshape marketing as we know it today.