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Attention is the most coveted currency in the world of marketing and Public Relations (PR). As the Internet has evolved over the past two decades, the methods and mediums of seizing consumer attention have adapted accordingly.
The millennium’s dawn saw the Internet entering its social age. Marketing was just beginning to harness the power of programmatic ads, which allowed brands to automate advertising and target specific individuals, which accounts for over 80% of ad spending in the APAC region today. Meanwhile, communication professionals found a game-changer in social media platforms, enabling real-time communication and reputation management on an unprecedented scale.
But it would be shortsighted for us to stop here and assume that today’s version of the Internet is in its final form, given our proven human capacity for innovation.
In fact, we’re already seeing the tuggings of transformation into the third era of the Internet, Web3, or the decentralized web - a vision where users regain control of their data and interactions, breaking the current monopoly of a few tech giants.
To be clear, this isn’t about million-dollar monkey pictures or dog-based cryptocurrencies, it’s about the fundamental (and undeniable) technologies making this paradigm shift possible. As masters of capturing attention, it’s crucial to understand and adapt to this new state of the Internet.
We’re not going to tell you…yet.
Instead, we’re going to try to empower you first - giving you the information you need to develop your own strategies to be ahead of the marketing and PR curve for years to come. You know what they say - teach a man how to fish, and you feed him for a lifetime.
In this article, we’ll run through the evolution of the Internet from Web1 to Web3 as well as the various technologies powering this change - and how professionals in marketing and PR can best leverage this.
Today’s Internet looks nothing like the first version of the World Wide Web, where a few users published content for the rest to consume. We call this Web1 , or the Read-Only Web.
Next came Web2 , or the Read-Write Web, where we all started sharing content on social media platforms and interacting with others.
But while we were busy sharing, these tech giants were busy collecting. Now, we live in a reality where corporations hold full control over our attention, data, and identities.
But the narrative is shifting once again.
The Web3 era promises a future where users continue to create and consume content, and also own and control their digital identities, assets, and data.
Welcome to the Read-Write-Own Internet.
A blockchain is a decentralized digital ledger.
That sounds complicated, so let’s break it down.
Digital ledger: At its core, a ledger is a record of transactions. In the context of blockchain, every transaction is added as a ‘block’ of data, which are ‘chained’ together.
This ensures that once a transaction is added, it cannot be altered without changing every subsequent block (which is practically impossible due to the cryptographic security measures in place).
Decentralized: Instead of being stored on a single server or controlled by a central authority, copies of the blockchain are stored on numerous computers, known as nodes, all over the world.
Changes to the database can only be made when all nodes agree to the transaction being made, which ensures that no single entity has control over the entire blockchain, and all transactions are transparent and verifiable by all users.
By not relying on a central authority, participants can transact directly with each other without the need for intermediaries.
In essence, blockchain technology enables the secure sharing of information, highly resistant to censorship or tampering.
Examples of a blockchain include Bitcoin, Tezos, and Ethereum.
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. When certain conditions are met, they trigger the automatic execution of the contract terms.
Let’s say that a farmer buys insurance to protect his crops from a storm. When the smart contract receives information that a storm hit the farmer’s location, the smart contract will automatically payout according to the contract terms.
A token is an asset on a blockchain, which digitally represents any type of value.
For example…
In simple terms, tokenization refers to the process of converting rights to an asset into a digital token on a blockchain.
So far, tokenized assets have been largely intangible (e.g. access to an exclusive membership club)…
But we are seeing a global shift in the tokenization of Real-World Assets (RWA) like real estate, government bonds, or even fine wine - predicted by BCG to be a US$16.1 trillion market by 2030.
On the blockchain, every transaction is recorded, reducing the risk of fraud and increasing trust and transparency among participants.
Large-ticket items like expensive artwork or real estate can be split up into tokens, lowering barriers to ownership/investment for individuals. This also enhances the liquidity of the asset, allowing owners to easily buy and sell.
The transfer of ownership for these assets can be governed by built-in rules and logic powered by smart contracts that automate actions, e.g. distributing dividends or enforcing restrictions.
In the following sections, we’ll explore three tangible ways Web3 is set to influence marketing and communications.
The retail industry is a perfect candidate to be a Web3 first adopter - specifically, in the area of loyalty programs. Initiatives like Nike’s .swoosh and Starbucks Odyssey have already been rolled out, with other huge brands keeping a watchful eye out.
The retail industry has long struggled to solve the puzzle of customer retention, having the lowest rates (63%) among all industries, with Retail having an average customer acquisition cost of $10. Customers cost money to acquire, and a failure to retain them equals a loss in overall revenue.
But loyalty programs aren’t effective. Many people who are eligible for loyalty programs don’t actively participate, and even among active members, a significant portion (one-fifth) never redeem their rewards. Members who don’t redeem their rewards are 2.7 times more likely to leave the program for another one.
What’s the problem? Simply put, there are too many competing loyalty programs from different brands right now.
The answer lies in a unified rewards ecosystem, which doesn’t exist yet. Brands cannot trust intermediaries with sensitive customer data and are hesitant to join an interlinked system that may reduce their own competitive advantage.
Smart contracts can greatly reduce the overheads and potential liabilities of managing loyalty points. While this alone is a compelling enough reason, it doesn’t stop here - Web3 opens up a new realm of exciting possibilities for customer retention.
On-chain data provides valuable customer data required to deliver personalized engagement critical for successful loyalty programs.
The importance of data cannot be understated. Loyalty programs need to deliver personalized engagement to be effective, but understanding customer preferences and constraints is harder than ever due to stricter data privacy policy changes (e.g. Apple and Google).
Forget customer surveys. You cannot get a more accurate understanding of customer behavior than from on-chain data, because it tells you exactly how they behave. With on-chain data, customers are essentially segmenting themselves. What they like, what they buy - all these patterns are self-volunteered
What if, in a unified system, brands could collaborate rather than compete?
Secondary markets where loyalty tokens can be sold freely open up an entire ecosystem for brands to collaborate meaningfully.
On a basic level, putting a cash value on points for cash definitely motivates customers to collect them. That’s an obvious point. But more important is the value that tradable loyalty points bring to each individual brand.
They’re providing feedback that they aren’t interested, and brands can adjust their offerings accordingly with the data-driven insights gleaned from on-chain activity.
Now, the sellers of these tokens aren’t interested. But they’re selling to buyers of the token, who are interested in becoming consumers of the brand.
Your customer acquisition costs are removed. In essence, you are replacing disinterested customers with customers with higher lifetime value for free.
But the real killer appeal is in how brands can go from a 1-to-1 communication channel (ie. brand to customer, like traditional rewards programs), to a scaled 1-to-many channel.
This scaled channel can be owned by a larger operator, providing added value to its clients.
When big companies with established loyalty programs team up, they can offer special services to smaller businesses.
For instance, let’s say a marketing agency decides to create an interconnected network of businesses that offer loyalty points to customers and extends invitations to their clients to join.
By joining this network through a custom app, the agency’s client can now offer its own loyalty points. These points can be used not just at their shop, but also at other businesses in the network.
This is great for the small shop because it can attract more customers without having to build its own loyalty program from scratch, and more importantly enjoy the network effect and other benefits we’ve talked about above, like access to on-chain data.
So, in this way, the marketing agency provides an extra service to its small business clients. At the same time, the loyalty network gets a new member, expanding the options for customers to earn and spend points.
Imagine a marketing agency with a diverse clientele: trendy bars and restaurants, scenic golf courses, thrilling theme parks, and dynamic event promoters.
This agency, leveraging the power of Web3, creates an exclusive, tokenized membership club that its clients can offer to their patrons. Unlike traditional memberships, this tokenized version is dynamic, adapting in real-time to members’ behaviors and interactions.
Here’s how it could work in practice:
A member decides to dine at one of the agency’s client restaurants. Based on their expenditure, their membership token is automatically upgraded to a higher tier - a passport to enhanced experiences with other clients of the marketing agency.
The next weekend, the same member visits a golf course, another client of the agency. With their upgraded membership status, they’re greeted with exclusive perks, from priority tee times to complimentary refreshments. As they enjoy these privileges, their interactions on the course could further elevate their membership tier.
It doesn’t necessarily need to be based on customer expenditure either. There’s a perfect opportunity to introduce gamification into this system. Introducing elements like points, badges, and leaderboards could encourage members to interact more with the client’s services.
For example…
Gamification thrives on social interaction, and members can be incentivized to share their achievements on social media, bringing in free publicity for the client.
All of this brings valuable on-chain data which provides insights into member preferences. Better yet, this data can be shared amongst clients - which offers an incredibly robust way for them to segment customers and understand their behavior.
In today’s fast-paced digital age, a company’s reputation can be tarnished within moments, and rebuilding trust can be a herculean task.
Here’s an example of how PR agencies can fully utilize blockchain to navigate these turbulent waters.
PR agency, LMG Global, has a client, a manufacturing company, which is facing increased scrutiny over its carbon footprint. LMG Global advises them to take corrective action by pledging to offset their emissions by purchasing carbon credits.
But the problem with this solution is the prevalence of greenwashing, where companies exaggerate or falsely claim environmental efforts, has stoked a culture of skepticism. Stakeholders find it hard to trust companies’ claims due to a lack of transparency and accountability in the carbon credit purchasing process.
Now let’s say that LMG Global is a forward-thinking agency, that creates specialized PR packages for clients that include a bespoke blockchain-powered transparency platform.
Every purchase of carbon credits can be recorded on the blockchain, which ensures that a company cannot falsely claim to have bought credits. This way, there is no room for doubt that a company follows through with its public promise.
But it doesn’t stop at reputational crisis recovery - LMG Global’s client can evolve to become a champion of the environment.
With the end-to-end transparency that blockchain offers, tracking the carbon offset projects (like afforestation or renewable energy initiatives) they commit to can be turned into an advantage.
As the funded projects progress, updates can be added to the blockchain - like the number of trees planted, the amount of CO2 reduced, or the renewable energy produced. All of this is visible to stakeholders, who can visibly track the actual impact of LMG Global’s client’s actions.
