Communicating The ROI Of Web3 To End Users

After over 15 years at startups, Nikki is currently leading developer marketing for Apple Arcade.

There are two sides to every coin, and with Web3’s “coin” (pun!), end-user benefits associated with Web3 come with business hurdles. In the world of Web3, when and how will what’s good for the consumer align with what’s good for business?

My most recent past employer was a startup focused on facilitating Web3 by building a new internet for real-time. Leading its marketing was a trial by fire in marketing Web3, and I got burned. Here, I explore the ROI behind the business of Web3 and what it means for marketers.

What is Web3, again?

First things first: As Alan Quayle of TADSummit (where I was a panelist) succinctly put it, Web3 is simply a marketing term that groups concepts such as decentralization, blockchain technologies and token-based economics into “Web3.”

Web 1.0 was the earliest stage of the World Wide Web. Spawned in the early ’90s, Web 1.0 consisted mostly of static, read-only webpages. Then in the early 2000s, Web 2.0 introduced content delivery networks (CDN), dynamic content and most recognizably: social networks.

WebRTC is free, but making a Web3 experience is not.

People now expect to be able to use Google Hangouts, Skype, WhatsApp and the like for free. At the same time, today’s increasingly mobile users require WebRTC, the default technology underpinning Web3, for high-quality, global and virtual interaction, but WebRTC adoption in mobile applications comes at a cost.

With the advent of Covid-19, companies that enabled people to seamlessly connect in real time across countries and continents thrived. Case in point: Zoom, which saw use of its platform increase by 30 times in April of 2020. But since then, Zoom has returned to its pre-pandemic stock price, despite what is arguably still a need.

My most recent startup employer endeavored to monetize quality of service (QoS) features on top of WebRTC. The argument was that by delivering more stable, reliable connectivity, customer service representatives would resolve issues faster, resulting in more satisfied end users and less customer service costs in the long run. However, the company went bankrupt in 2022.

Web3 needs WebRTC, and yet WebRTC comes at a cost. This is because, while WebRTC is a free, open project, building WebRTC into a Web3 application entails development, server and infrastructure costs at a minimum. Today’s consumer empirically understands the value of frictionless, real-time communication, but that value is not duly calculated in dollars transferred to the end user.

How can you trust a decentralized identity?

User interaction on the web today is predicated upon proving one’s identity. From online shopping to social media to signing up for an email account, when one uses an online service, they are sharing their identity—and doing so with traditional identity management systems that rely on centralized intermediaries.

In this Web3 world that is founded on a notion of decentralization, that philosophy applies to your online identity as well. If companies build decentralized identity systems on public blockchains like Ethereum, individuals could maintain control and ownership of their identity-related information.

On the plus side, decentralized identities could mean greater security, privacy and inclusivity. On the negative side, this essential anonymity may remove accountability and actually breed mistrust.

In the same way that blockchains can confirm transactions across a peer-to-peer network, perhaps our identities could, too, be verified by the blockchain. Imagine if karma was added to your self-identification, and that karma was earned and verified by the network.

What is the role of marketers in helping Web3 become mainstream?

Web 2.0 companies started investing in Web3 in recent years. Facebook’s rebrand to Meta is the most immediate example. But Meta investors are “100% against” the magnitude of spending on metaverse investments, and the company has seen a cumulative operating loss of $9.1 billion since Q3 2021.

Many other implementations of Web3 are cosmetic, such as Twitter allowing users to display an owned NFT as their profile photo or Spotify allowing artists to promote their NFTs on their profiles.

Web 2.0 companies typically lock users in by owning all of the data that exists on their platform. This is primarily how they grow and generate revenue. Web3 disrupts that lock-in model by making data public and giving users custody. This creates an open standard interoperability that favors the user. But it remains to be seen how Web 2.0 companies can or will evolve to truly adopt Web3 principles, standards and features without needing to fundamentally change their business.

As marketers, we have the opportunity to evangelize the benefits of Web3 for both a B2B and a B2C audience. This requires taking a concept that is currently explained in daunting or buzzy terms like “blockchain,” “decentralization” and “cryptocurrency” and making the opportunity tangible. We should explain to users how our products help them control their own data, have increased security, own their creations or interact anonymously. Imagine the opportunities for consumers, and therefore businesses, when we acknowledge and expand upon those benefits. Communicating complex concepts is what we marketers do best, so we are arguably in pole position to advance the industry of Web3.

Web3 and all its associated components, from blockchain to NFTs to decentralized identities and more, may be what Facebook and Web 2.0 were over a decade ago. But I believe the solution for delivering a return on Web3 investment will take more than an advertising solution.

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