The advent of the internet changed marketing forever, so it should come as no surprise that the third iteration of it - known as Web3 - continues to drive innovation and change.
Despite this, traditional marketing continues to favor tools and techniques that Web3 projects would rarely utilize, and vice versa.
Let’s start with a brief definition of both Web3 and Traditional Marketing:
Traditional Marketing Defined
More than just promotion, traditional marketing also includes research, pricing, and distribution tactics that help generate leads for a business and sell more products.
Web3 Marketing Defined
Incorporating some of the elements of traditional marketing and moving well beyond them, Web3 marketing includes community-focused, user-centric, and decentralized strategies that incorporate blockchain technology and the NFTs, coins, and tokens that reside within the ecosystem.
As we can see, there are some key differences when it comes to Web3 marketing vs traditional marketing, namely:
- The focus is on digital marketing in Web3 whilst traditional marketing may use “above the line” tactics such as radio and television.
- Web3 marketing fosters communities and is better able to reward loyalty with tokens.
- Both types of marketing make heavy use of social media and Key Opinion Leaders (KoLs) & Web3 influencer marketing.
Now that we’ve got a good working definition of these types of marketing, let’s take a closer look at some details.
What is Traditional Marketing?
Traditional marketing strategies are still used heavily today. It is near-impossible to walk through a city center without seeing some form of print or video advertising on a billboard or the side of a bus.
Most households contain televisions and radios, and these are crucial tools for traditional marketers. Most homes also contain laptops and desktop computers that are always connected to the internet, exposing users further to traditional digital marketing such as search engines and social media ads.
When it comes to digital marketing, traditional marketers rely heavily on tracking cookies that collect data. The proliferation of “Login with Google/Facebook” has resulted in huge amounts of customer data being collected throughout the internet by these giants, raising data privacy concerns.
What is Web3 Marketing?
Now that the internet has reached its third iteration, Web3 marketing is possible.
This new approach utilizes emergent technologies such as decentralized blockchains and the ecosystems that grow around them, including cryptocurrencies, tokens, NFTs, metaverses, and more.
Web3 technology in marketing can have a huge impact, especially around empowering individual users to have more privacy, control, and agency within a community.
Web3 marketing explained is simple: if Web2 was “Sign in with Google”, Web3 is “Connect wallet.”
Data can then be stored on-chain through public but anonymous transactions that protect the user's privacy rather than detailed personal information stored in a centralized database or cloud.
Through blockchain, personalized marketing is made possible through, for instance, community membership and NFT ownership.
Key Differences Between Web3 and Traditional Marketing
Now let’s look at the key differences between these types of marketing in closer detail, along with - in the interest of balance - an overview of the challenges of Web3 marketing.
Decentralization vs. Centralized Platforms
An inherent difference between traditional and Web3 marketing is the move from centralized to decentralized platforms. Web3 makes decentralized marketing possible through distributed networks of nodes and active wallets rather than relying on single platforms and databases.
Users must trust a centralized platform, while they can engage with decentralized platforms on the blockchain without relying on “trusted” third-party intermediaries.
User Ownership of Data vs. Corporate Data Control
Data on centralized platforms can be deleted, changed, censored, or exploited by hackers, whereby the immutable digital records that reside upon decentralized blockchain networks are censorship-resistant, transparent, and permanent.
Data privacy in Web3 marketing is often cited by projects as an ideological value of importance, aligned with Web3’s vision and principles around individual empowerment.
One killer use case of Web3 marketing is where our data can be commercialized and monetized by large centralized organizations in traditional marketing. We, as users, can earn rewards and incentives for choosing to share our data with Web3 projects.
Community-driven vs. Top-down Approaches
While the one-to-many marketing approach of Web2 persists in Web3 marketing, there is a much greater emphasis on an individual’s involvement with a community, rewarding their individual efforts and participation, and creating unique, personalized experiences.
Community members often become ambassadors, advocates, and champions of the project they’ve joined, and community-driven Web3 marketing has become a major part of the strategy, further amplified by the strategic use of Key Opinion Leaders (KOLs) and crypto influencer marketing.
Blockchain Transparency vs. Traditional Closed Systems
The use of blockchain in marketing has resulted in a push towards total transparency and accountability on the side of the project's marketing to new and existing users.
Dune Analytics and similar dashboarding tools allow anyone to visualize and scrutinize complex datasets. Each blockchain features an explorer that can quickly show an interested user how many participants a project has, for instance.
This transparent and accessible view of data offers vast improvements over traditional closed systems employed by traditional marketers.
The Role of NFTs and Tokenization in Web3 Marketing
Non-fungible tokens, cryptocurrency coins (those native to the chain), and tokens (non-native to the chain) have revolutionized how Web3 marketers can engage with and reward their audiences, including through NFT influencer marketing.
A compelling use case for NFTs in marketing and tokenization for brands in use today includes early adopter NFTs and token airdrops for testnet participants. These strategies have worked well for Web3 brands, but even large traditional organizations like Starbucks have experimented with Web3 loyalty programs.
NFTs and tokens can become quite valuable, and once an audience member owns them, they have total control over their digital ownership, something lacking in traditional marketing.
Challenges of Web3 Marketing
As a relatively new technique and technology, numerous Web3 marketing challenges must be overcome, including but not limited to:
Accessibility - it is perceived to be difficult, time-consuming, and complex to get started in Web3. Projects must offset this perception with high-quality educational resources.
Skepticism - some groups, for instance, gamers, have viewed NFTs and blockchain as scammy and being forced upon them. Brands can offset this by proving the real value of the tech’s inclusion in fun games.
Regulatory uncertainty - it is currently illegal for Web3 projects to market to the citizens of many major countries globally. This presents quite a challenge, and how it will be overcome is unclear.
Only time will tell if projects will overcome these challenges and raise the standards for every Web3 marketing agency.
Benefits of Web3 Marketing for Brands
Despite the challenges outlined above, these can be vastly outweighed by the Web3 marketing benefits that projects who take the time and effort to learn will reap:
Trust & loyalty - public wallets are transparent and display exactly what is happening with user funds.
Direct relationships - through NFT ownership, token stalking, and other indicators, projects can foster direct relationships.
Improved targeting & data analytics - rather than email addresses that might change or be incorrect, blockchain wallet addresses can provide unparalleled insight to user behavior.
There are many more benefits, also worthy of their own post.
Real-World Examples of Web3 Marketing
ike Starbucks mentioned above, several other real-world examples of Web3 marketing case studies exist. We’ll take a look at a popular example below.
Reddit NFTs
Reddit, the popular social media platform, was able to successfully onboard millions of its community members to web3 through a novel approach: not calling their NFTs NFTs.
By referring to their NFTs as digital collectibles and their wallet as a Vault, Reddit was able to conduct airdrops to its interested users and enjoy new levels of community engagement.
How to Transition from Traditional to Web3 Marketing
It might seem daunting when considering how to start Web3 or crypto marketing, but like with any marketing effort, marketers should begin with a plan.
Would-be Web3 marketers should ask themselves:
- What am I trying to achieve?
- Have I educated myself enough about Web3?
- Does my audience have an appetite for Web3?
- Have I got a strategy and tools in place?
- Would I like to partner with some Web3 marketing experts?
As we’ve seen, there are some similarities and many differences between traditional and Web3 marketing. However, savvy marketers will be able to utilize a best-of-both-worlds approach and get ahead of the competition by starting sooner rather than later.
