Is Web3 a Marketing Term or a Technical Term? It’s not that simple.
Bware Labs Team
Fake, a marketing hype, or a technical concept in its infancy? Web3 looks like a revolution against Big Tech and social media platforms, but it implies more.
We keep hearing over and over that web3 is “in its infancy “. It’s not exactly an overstatement since the term was coined in 2014.
Web3 is just 8 years old and needs to develop more before Web3 and crypto enthusiasts, in particular, can finally see the whole concept of a decentralized internet in full bloom.
While still a work in progress, Web3 remains a hot and highly debated topic in the tech-savvy communities. At the same time, the topic is also highly debated between marketers all over the world, who strive to keep up with the latest news and trends, so they would be able to adjust their marketing strategies accordingly. So, of course, they would jump on a trend such as Web3, capitalizing on the concept’s popularity regardless of its maturity.
So — is Web3 just a buzzword marketers push forward to attract audiences, or is it a technical term whose meaning only tech-savvy people can truly understand?
Let’s explore the topic a bit to find the answer.
An Overview of Web1 vs. Web2 vs. Web3
To better understand Web3 (in today’s form, at least), let’s have a quick recap of how the internet evolved over time.
Web1 (1989- 2004) — Or The Start of The World Wide Web
If you’re a Millennial, you probably remember the beginnings of the World Wide Web, which looked something like this:
Nothing fancy, and everything was static because the whole point of Web1 was for users to read the information on the computer screen, so web pages looked pretty much like the online version of a printed newspaper.
For example, here’s a look at what Google looked like when it was launched:
Web1 Marketing Tactics
Online ads weren’t allowed from the beginning; the first clickable digital ad banner was introduced in 1993.
Additionally, the internet wasn’t widely available, so marketers weren’t truly interested in leveraging the online space. Digital marketing was just starting to take its first steps.
Most efforts were directed towards having a company web page to publish content or the old trick of using your connections to have any content about your company posted on news websites.
Technology Used for Web1
Technology during Web1 simply covered web pages hosted on ISP-run web servers or free web hosting services. In terms of design, there were Server-Side Includes or Common Gateway Interfaces (CGI) and basic frames and tables to position and align the elements on a page.
Web2 (2004-present)- The Social Media Revolution
Web2 is also known as “the participative social web”. Due to the need for increased availability of the internet during Web1, centralized platforms naturally evolved to enable general internet adoption and usability.
It’s the YouTube and Google era and the time of the Social Media Revolution. Almost everything you experience in today’s online world is Web2, so unless you’ve lived under a rock so far, there’s no need for any description.
Web2 Marketing Tactics
Digital marketing flourished during the Web2 era, orienting towards performance and analytics — a major shift from Web1.
A key milestone in the world of digital marketing was the release of online cookies as a means to keep track of user preferences. An additional step up was the use of online data to create targeted marketing campaigns which brought concepts like the cost of customer acquisition (CAC), customer lifetime value (LTV), and more to digital marketing. The new generation of marketers could quantify business value across various verticals and industries easily.
Marketers create awareness for brands via social posts, videos, podcasts, email, blog content, Pay-Per-Click (PPC) advertising, and many other methods.
Highlights of Web2 marketing include:
- Targeted ads (demographic, psychographic, behavioral, geographic, and firmographic segmentation)
- Mobile ads
- Influencer marketing
- Advanced SEO strategies
- Sophisticated cross-channel communications (offline > online via QR codes, email > website, from in-store to e-commerce, social media to LP to store etc)
- DTC (ecommerce platforms like Shopify enable anyone with Wi-Fi to create a DTC ecommerce platform, thus eliminating retailers and wholesalers from the distribution process)
Technology Used for Web2
Users are now able to sort, retrieve, and classify online information. Some of the technologies around which Web2 development gravitates are:
- Dynamic UI and content with information flows and complex tool integrations
- Developed APIs for self-hosting
- Cloud computing hosting
Web3 (Officially Coined in 2014 — present) — Consumers Take Back Control
The core idea of Web3 is creating a decentralized ecosystem based on trust and users’ real data ownership. Web3 is built on open-source software, where users are content creators but also content owners.
By creating a decentralized version of the Internet, thereby supplanting the centralized authority of Web2 monopolies such as Amazon and Facebook, the power of autonomy will be restored to the users.
Web3 seeks to restore data sovereignty to individuals by leveraging blockchain technology, decentralized storage, and self-sovereign identity in a collaborative setting. This would enable users to be in control of who can access their data. Blockchain or distributed ledger technology is at the heart of Web3.
Cryptocurrency wallets, such as MetaMask, Venly, and TrustWallet, enable users to securely store the keys to their data and identities. By using a crypto wallet to log in to other applications, much like when using a Facebook account to connect to various apps, individuals are able to maintain full control over their data.
The rapidly expanding applications and use cases of Web3, which is characterized by decentralization, digital assets, smart contracts, and open-source platforms, have propelled it into the spotlight. Its potential to revolutionize all aspects of life makes it an essential tool in the modern world.
Web3 Marketing Tactics
As we speak, marketing in Web3 doesn’t follow a clear recipe and tries to find the right formula based on the dynamics and complexity of the specific niche. For instance, an entertainment brand will keep using channels for content marketing and SEO but will also add NFTs to distribute royalties from resales.
As Upstream’s app co-founder Alex Taub mentioned, “marketing doesn’t change; what people care about does.”
For this reason, if Web2 marketing implies acquiring and engaging the customer at any cost to generate revenue, in Web3, the focus shifts to gaining trust based on relationships with customers and community peers.
Because Web3 covers different types of stakeholders: users, developers, and their broader communities, online marketing happens on three basic levels:
- Consumer marketing — use content marketing, product marketing, and SEO to generate awareness of a project and educate consumers.
- Developer marketing — focus on outreach, documentation, and events targeting developers as the end-users.
- Community marketing — combine marketing efforts in a way that connects both users and developers while keeping the brand’s mission at the core.
Technology Used for Web3
The basics of Web3 technology are:
- integration of DLT (Distributed Ledger Technology), blockchain, and smart contracts — a technology that makes databases unbreachable and unattackable. Smart contracts use data from the blockchain and ensure events, like agreements, are executed only when predetermined conditions are met.
- nodes as independently operated servers with no central authority and no need for trusted intermediaries
- a greater focus on the back-end of the web — a new element compared to Web2, which is focused mostly on the front-end (relying on anything that involved front-end user-experience innovation).
- dApps with core programs built on a network of decentralized servers’ nodes; users can connect through a peer-to-peer server network on the blockchain network
- fungible and non-fungible tokens as tradable and transferable assets on blockchain networks
↪ Web3 Gives Businesses More Power over their Brand
Companies that embrace Web3 are placing customers on center stage, providing them with unique experiences connected to their brand. The whole concept drives brand loyalty and motivates customers to optimize or increase the brand’s value through an incentivization model. Let’s say customers are rewarded with digital tokens that they can either exchange for money or use for different online experiences.
The same scenario goes for influencer marketing, where instead of paying influencers to promote their brand, companies would incentivize those influencers by giving them a part of their business through a tokenized model.
Let’s take a look at some clear examples.
Examples of Web3 Marketing — The Good and The Bad
The transformative journey from Web2 to Web3 in marketing has already begun, with Facebook as the most obvious example, changing its name to Meta and focusing on Metaverse, or Square re-branded as Block and made crypto the center of their business.
Microsoft plans to implement DevOps into Web3 and ensure security when deploying smart contracts and dApps.
Metaschool, a top Web3 edtech platform has the goal to help as many developers learn the ins and outs of blockchain and decentralized finance (DeFi). The platform reached an important milestone as it announced it reached 120,000 registered developers.
With the goal to attract and help as many Web2 businesses easily transition to Web3, Polygon has launched the eDAO platform. eDAO will support companies with investments, technology, marketing strategy and consulting services.
Luxury brands like Burberry and Dolce&Gabbana used NFTs to extend their audience, adjust it for the new internet era, and ultimately sell more accessible items.
In collaboration with Mythical Games (an NFT-based video game company), Burberry attracted game players, offering them the chance to buy Burberry digital accessories as an in-game reward, which they could turn into NFTs. Dolce&Gabbana raised the bar and offered gamers a real-life suit tailored to their desires.
The NFL partnered with Ticketmaster and offered fans virtual NFT tickets they could trade or sell.
Nike recently launched its new Web3 shopping platform dotSwoosh, planning to turn it into a community-driven store.
A memorable and weird marketing strategy was when Paris Hilton promised she’d give all spectators from the Tonight Show audience one of her own line of NFTs. The only problem was her line of NFTs didn’t exist at the time; it was launched a few months later.
Pump and dump schemes ran rampant in crypto markets, promoting projects on sites like Discord, Twitter, and Telegram. Celebrities like Tom Brady or Kim Kardashian have been involved in pump-and-dump schemes — used misleading marketing to misleadingly promote and sell the crypto-currency.
Other bad faith schemes were airdrop scams where bad actors were airdropping fake tokens to digital wallet holders and stealing personal information and funds.
Medium publishing platform tried to attract Web3 aficionados with Mirror — the same Medium but in a Web3 version. They marketed Mirror as a way for writers to sell editions of their work — which is exactly the way Medium works, but in the form of traditional subscriptions where people can buy using credit cards instead of using a crypto wallet.
It’s a way to fit in the Web3 space, but essentially, it doesn’t bring anything new.
In May 2022, the crypto market witnessed the Terra crash — an algorithmic stablecoin. Terra (LUNA) was one of the most valuable cryptos in the market, but it collapsed to near zero after it went down 96% in just a 24-hour period after the network’s stablecoin, TerraUSD (UST) lost its peg to the dollar. The crash meant bankruptcy for many investors and it also knocked down the entire crypto market with it.
FTX, a major cryptocurrency exchange, and FTX.US, its U.S. branch, announced their bankruptcy in November. The FTX crash was the result of a lack of liquidity and Bankman-Fried’s (FTX founder and CEO) mismanagement of funds. This included the cryptocurrency exchange’s close ties with Alameda Research, a crypto hedge fund also founded by Bankman-Fried.
Is Web3 a Marketing Term or a Technical One?
Whether a few years, decades or more, we still have to wait until we witness a wide adoption of Web3. Until then, it will remain both a marketing and a technical concept. Marketers do what they know best and try to stay ahead of the game, educating and also preparing users for the next online experience. On the technical side, many details are still fuzzy, and few people can understand the inner workings of blockchain technology and decentralized infrastructure.
As Galen Wolfe-Pauly, CEO of Tlon said: “Web3 is very real; it’s just temporarily annoying.”
We’ll keep facing a ‘cut through the noise effect during this transition period. But bit by bit, we’re closer to winning back online privacy and gaining more power and ownership over data.