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Web3 and the Future of Marketing

With the rise of Web3, blockchain, and decentralization, how will marketers respond to an evolving data privacy landscape?


What Is Web3?

Over the last several years, data privacy concerns have grown in both awareness and magnitude. Marketers and consumers alike have had to ask difficult questions and consider the implications of how data is shared, sold, and used across companies and platforms in a rapidly evolving digital ecosystem.

The first iteration of the web (Web 1.0 in the late 1990s and early 2000s) was mostly a static and closed place. Web 2.0 brought the dawn of the user as content generator, and the web became a more open and social environment. Web3 is an outcome of the decentralized world of blockchain. It is built around sharing in a trustless and permissionless economy with a new focus on AI and the metaverse.

Web3 And Marketing

While marketers and consumers have had to sharpen their understanding of data privacy, lawmakers and politicians have also taken an interest. In Europe, GDPR provided EU-wide protection of user privacy, and the United States and other countries are following that lead. But in the U.S., although federal law prohibits the use of data in certain situations, it does not offer comprehensive oversight of data privacy. Rather, states determine their own regulations to protect consumer privacy.

Currently, six states – California, Colorado, Nevada, Utah, Virginia, and Connecticut – have ratified comprehensive data privacy laws. These include commonalities such as the individual's right to access and delete personal user information and opt-out of their information being bought and sold. Additionally, commercial websites and online service providers must post a privacy policy, alerting users to what data is being collected and whether it is being shared.

Many other states have acted in specific areas of data privacy, such as children's online privacy, data broker registration, internet service provider privacy legislation, customer disclosures, and notices regarding location or communication monitoring.

Similarly, at least 16 states in the U.S. require government websites and portals to establish and clearly post their privacy policies and procedures. Data brokers and sellers are coming under the closer scrutiny of these directives, with greater liability if they cross the line.

To further complicate matters for marketers, browsers like Chrome, on the heels of changes at Firefox and others, will retire the use of third-party cookies at the end of 2023. Apple has increased tracking transparency for users across its devices and apps by giving consumers choices and easier means for opting out.

Marketers are scrambling to understand all these changes as they look toward a cookie-less, decentralized future with more restrictive data policy programs and regulations. Understanding the implications for brands and business is as important as ever and will affect ad targeting, personalization, and customer communication.

Here are three essential considerations for marketers:

Zero-party data: micro-experiences replace ad targeting

With more regulatory hurdles, one thing brands can do immediately is focus on zero-party data (ZPD), reducing reliance on third- and first-party data. According to Forrester Research, ZPD is "data that a customer intentionally and proactively shares with a brand, which can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize her."

As users become more aware of data privacy concerns, and technology companies limit access to user data, companies can rely on ZPD to build direct relationships with customers. Of course, creating experiences in a value exchange puts customers in the driver's seat. It allows individuals to choose what data they will share and whether to personalize their experiences. While it is a more complex process to manage, this greater involvement ultimately creates stronger brand trust and confidence.

Customer-centric governance: be proactive, not reactive, about regulation

In an era of massive changes to data privacy and regulation, consumers are bombarded with privacy and cookie statements. The difference is that a privacy policy will include all the various ways a company might collect and store data from users, while a "cookie" policy refers to the specific embedded tracking technology and how it does or does not track user behavior. Most websites use cookies, and they typically store vast quantities of user data such as site-related passwords, login credentials, browser history, and shopping cart details.

Many organizations have privacy or cookie policies published on their websites. Similarly, many websites now greet users with a message instructing them to select their preferences regarding privacy and cookies. These notices can look intimidating or daunting, sometimes causing users to leave the site immediately.

Because websites are primarily marketing vehicles, marketers should control the look, feel, and substance of these notices and policies, in partnership with data security or technical teams, but with sensitivity toward how consumers will perceive them.

NFTs: new approaches to customer-centric marketing

Non-fungible tokens, or NFTs, represent the non-transferable ownership of an item. They have received a lot of press attention in the last 12 months for their role in securing valuable things such as art or original music compositions.

In fact, NFTs have begun to permeate the mainstream with headlines across the business press landscape, complete with celebrity endorsements across the spectrum, from Snoop Dogg to Reese Witherspoon. A recent Financial Times article noted that Meta would soon roll out a plan for NFTs on both Facebook and Instagram.

However, NFTs have moved beyond the world of celebrities, artists, and billionaires, increasingly becoming tactical marketing tools for brands. Recent examples include Campbell's Soup, the Coachella Music Festival, Robert Mondavi winery, Taco Bell, Nike, and Starbucks; these companies use NFTs to establish individual ownership of things like collectibles and privileged access passes. While NFTs are not for every company, understanding if and how they can create value is a necessary step toward the future of brand marketing.

Last Word

Regulatory movements and technological functions like NFTs are ostensibly about consumer privacy, but they are also about consumer empowerment. To navigate that new frontier successfully, marketers will need to adjust their approaches and investments — in many cases, substantially. However, if brands focus on and prepare for these three facets of forthcoming marketing, they will be positioned to take on the future, even if some of that future is yet to be defined.

Kelly Cutler, Faculty at Medill School of Journalism, Integrated Marketing Communications.

The views and opinions expressed in Industry Insights are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.