Digital Transformation Agency

Does brand collaboration make more sense than ever in a Web3 world?

By Jane Hales | Sapio Research

June 30, 2022 | 6 min read

Web 2.0 was riddled with myriad problems for brands. Now as we look towards the promise of Web3, what will it all mean in terms of data, collaboration and everything else? Sapio Research co-founder Jane Hales explains.

The web’s next evolutionary phase is set to be radically different from its current incarnation. Built around blockchain and tokens and decentralized by nature, Web3 aims to bring the web back to its democratic roots and wrest power away from the handful of big tech companies that have dominated Web 2.0. One area where Web3 could make a major difference is in the relationships brands have with their customers.

Today, most brands rely on third-party cookies to watch behaviours and record the kind of data that facilitates a more personalized customer experience. But with even traditional big-tech giants such as Google, Microsoft and Apple having banned third-party cookies from their browsers, that’s increasingly difficult to do. The shift to Web3 will only accelerate this phenomenon. As a result, brands will have to take a much more collaborative approach to engaging with customers on campaigns and products.

virtual globe

Hales muses on the future of brands in the internet's next iteration / Adobe Stock

Security, scalability and, of course, privacy

In order to understand what that might look like, it’s important to take a deeper look at what Web3 is and why it has the potential to change how the web operates.

The term Web3 was first coined by Gavin Wood, co-founder of cryptocurrency Ethereum. Based on blockchain technology and incorporating concepts such as decentralization and token-based economics, Web3 evangelists believe that it will bring increased data security, scalability and privacy for users.

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Security and privacy in particular are growing concerns for web users and regulators alike. A survey from Statista, for example, found that more than half of British web users were more concerned about web privacy in 2021 than in 2020. That’s hardly surprising, given that there were a record number of data breaches in 2021. Additionally, regulations such as the European Union’s GDPR mean that organizsations have to be a lot more careful when it comes to collecting data.

This shows that even if Web3’s adoption is slower than evangelists expect, the concerns driving its development mean that organizations will have to adopt new ways of engaging with consumers. No brand, after all, can hope to remain relevant if it isn’t paying attention to customer needs and behaviors.

Customers need to know what they are getting for their data

The first step is to realize that the kind of clandestine data collection that characterized Web 2.0, will need to be replaced by more overt forms of data collection. You need to keep asking, even if you can’t listen.

But if your customers are to consent to share their opinions or behaviors, they will need a high level of trust in the brand that asks for access. Not only does this shine a light on data security and integrity, but the intent in use. Woolly statements about data use simply won’t hack it.

Customers need to know what benefits they’re getting from sharing their data. What product improvements or perfected experiences will they directly benefit from by sharing their valuable knowledge? As such, brands need to think carefully about explaining the value customers get from sharing their data. But they’ll also need to demonstrate that they’re being entirely transparent with how they use the data and not sell it on to other parties.

One way for brands to incentivize people to share their preferences and opinions is to pay them to do so. This can be useful as it focuses the mind on the outcome you want. But paying for responses also risks losing objectivity from respondents. There are, however, ways around this.

Specifically, brands should opt for a proxy of the customer group they’re trying to target (targeting things like ensuring that participants are of a similar age, location, and have the same kind of habits). The relationship they have with the value of their data should also be overt. That is, they have agreed to offer their opinions and relay their experiences in exchange for money or a survey incentive.

Old dogs, new tricks

On their own, it’s unlikely that brands will be able to achieve this level of objectivity. They also likely don’t have the expertise to do so while navigating the myriad regulatory requirements that abound today.

As such, the market research industry will likely come to the fore again. Make no mistake though; it’s an industry that’s come a long way from getting a few people in a room to say which brand of pie they like best. Today’s market researchers use

all the latest available technology to ensure that they provide brands with real-time customer insights.

As Web3 grows in significance, its access to willing respondents (and decades of experience of being bound by ethical data codes of conduct) will make it a crucial conduit for brands looking to take a more collaborative approach to the ways they deal with customers.

Jane Hales is co-founder and director at market research agency Sapio Research.

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