Web3 Insights: The Key to Unlocking First-Party Data Solutions for Businesses

As online consumer privacy popularizes and expands, it’s becoming increasingly difficult for companies to access first-party data. This is especially concerning for brands when it comes to marketing and advertising efforts, as they are increasingly being held accountable for customer trust in ways they weren’t a mere 10 years ago.

For over a decade, first-party data was collected through tracking tools on websites, allowing brands to tailor ads to target specific demographics or interests. However, with recent changes in laws like the General Data Protection Regulation (GDPR) or California Consumer Privacy Act (CCPA), tracking has become much more difficult as consumers now have greater control over their personal information online. These developments in privacy legislation have constricted the reach of important tools for marketing, like ad retargeting. They’ve also effectively limited the ways brands can build meaningful relationships with customers.

To stay ahead of this issue, brands need to find creative ways to harness the potential of cutting-edge technologies like Web3. With Web3’s decentralized approach, focused on rewarding customers and companies equally, it will revolutionize how brands interact with consumers in the modern digital world where privacy is key and consumer-controlled.

Web3 and What Consumers Want

Since its inception, the internet has gone through several iterations. The first, simply called the “Web,” was essentially a platform for presenting information by connecting computers via hyperlinks or URLs. This technology enabled easy access to information and resources that weren’t available before; just think Napster of 1998. Web 2.0, on the other hand, was about enabling two-way communication between users and applications such as blogging software, comment sections, social media networks, and more — essentially allowing people to interact online rather than just consume content passively from portals like Yahoo or AOL.

Now, enter “Web3,” which focuses on individual empowerment. Today, data is being stored in decentralized databases controlled by decentralized autonomous organizations (DAOs). Artificial intelligence (AI) helps facilitate automation and personalization for each user’s experience through machine learning algorithms powered off of blockchain-enabled smart contracts, and digital tokens serve as reward systems — incentives employed when engaging with specific brands or target communities.

At its core, Web3 emphasizes privacy and control. Due to rising concerns around data misuse, consumers now expect to be more in control when sharing personal information like demographics, location, and browsing habits. Moreover, consumers want more say over decision making by the brands they patronize. After all, today more than ever, their buying power reflects their values, opinions, and style. Companies must recognize this desire among customers if they wish to remain competitive.

Turning the Knobs of Influence via Web3

Professor emeritus of psychology and marketing Robert Cialdini synthesized decades of his research on social influence into six principles:

  • Reciprocity — Returning a favor. Between brands and consumers, an example would be a free sample for a review or a service rate discount for a sale.
  • Commitment — In brand-consumer relationships, commitment directly translates to brand loyalty and repeat business.
  • Consensus — Community consensus drives customer loyalty for brands with engaged followings.
  • Authority — For brands, authority stems first from their products and services and then from how they present themselves through what they say and do.
  • Liking — From the consumer side, people in similar demographics tend to persuade potential consumers in the same group.
  • Scarcity — Exclusivity and niche can be wielded to bolster anything from sales to community building.

Against this backdrop, the advantages of Web3 technologies and philosophies become clearer. Tokenization, for example, can breed reciprocity. Brands can create tokens that grant consumers access to exclusive deals, loyalty perks, or discounts in exchange for things like customer feedback. They can use cryptocurrency payments for a variety of purposes that echo the values of their consumers. These could be decentralized donation campaigns which speak to community consensus and work to improve commitment in the form of brand loyalty.

The decentralization aspect of Web3 further ties into the principle of consensus because it allows communities greater influence over how a brand is perceived and what elements hold value within its network. The fact that only targeted communities of early adopters gain access to niche groups with Web3 capabilities leverages the concepts of scarcity and liking. Better yet, all transactions within brand communities can be secured by blockchain technology. This helps protect user data while still allowing businesses access to crucial first-party information necessary for ad targeting or acquisition purposes, as well as product or service personalization research — which elevates authority.

Without a doubt, Web3 is demonstrably compatible with the six principles of influencing consumer decisions.

Leveraging Web3 Technologies and Philosophies

So, is the key to modern-day customer loyalty tokenization and decentralization? Is the path to brand loyalty paved with blockchain transactions? Yes and no.

It’s true that, by their very nature, Web3 technologies such as blockchain put a premium on privacy. It’s also true that within co-creation initiatives where digital tokens are involved considerable partnering between brands and consumers can take place. DAOs, like the Myosin Growth Markeing DAO, incorporate encrypted token rewards for participation in consumer communities. These same tokens can be used as commodities for community members to either vote or contribute to brand-customer partner initiatives. In this way, companies increase current engagement but also improve retention and conversion rates down the line.

Beware, however. Significant investments in Web3 technology are neither compatible nor recommended for a wide range of brands due to their industry, audience, or nature of business. But, even if Web3 technologies are off the table, the Web3 philosophies are still sound. Brands can leverage several options, such as maximizing existing loyalty programs and providing additional incentives. Target communities can also be given access to niche groups or become involved in partnering and co-creation activities that don’t involve tokenization.

The principal idea of Web3 is to gain first-party data directly from consumers in exchange for what they want: better privacy and more control — or in this case, more influence over the brands they care to partner with.

Remember, consumers are using their purchasing power to give voice to what behavior they expect from the brands they follow. Consider that, according to consumer pulse research:

  • 62% of consumers expect their brands to share their values on environmental, socio-cultural, and political issues
  • 65% of consumers say the words, values, and actions of company leaders influence their purchase decisions
  • Billions of dollars of potential revenues can drop alongside stakeholder trust when consumers perceive a lack of transparency or authenticity in brand values

These same consumers are finding more and more that they are being empowered by legislation to gain near-absolute control over their privacy. And they’re finding that their social signals — and their wallets — have more influence than at any other point in history to impact the behaviors of the brands they follow.

When brands want to engage these savvy consumers and gain invaluable first-party data, Web3 technologies and philosophies offer a treasure trove of capabilities. They can create internal initiatives and strategies and partner with product and service providers like Myosin and its sister company, Myosin.xyz who embrace avant garde technologies and principles like big data and AI. These partner providers can help them reach new heights in marketing, advertising, and branding  — designed for the cutting edge.

Today, brands are at a unique intersection of emerging technologies and market shifts. The faster they unlock streams of highly coveted information like first-party data with Web3, the more competitive they will remain in the years to come.

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