Is Web 3.0 the future of the internet or just another passing fad?

Elon Musk dismisses it as a marketing ploy, while Jack Dorsey called it a "venture capitalists' plaything" as reported by Bloomberg and his tweets. While many tech messiahs have expressed their doubts about Web 3.0, calling it everything from a scam to a fairytale, many brands, their marketers, and influencers are calling it the future of the internet and democratization of ownership of media, information and the way companies, consumers and content interact with each other.

While Web 1.0 (functioning roughly between 1991-2004) comprised largely static web pages, Web 2.0 refers to the internet as it exists today comprising “user-created content uploaded to forums, social media and networking services, blogs, and wikis, among other services” as per Encyclopedia Britannica. Web 3.0 is based on blockchain technology, with a potential decentralized ecosystem that will allow users to break away from the control of tech giants like Alphabet, Meta, and the rest of “big tech”, thereby bringing down the “walled gardens” of closed internet platforms.

Swapnil Pawar, Founder, Newrl believes that Web3.0 technology enables an ownership economy - something unique to it and not possible earlier. “Brands and marketers can use this to opt-in with their customers as owners instead of passive consumers. This will improve customer loyalty and also make each customer a brand ambassador for the company,” he says, adding, “The current model of spending excessive sums of money on customer acquisition and retention can be very effectively replaced by this new approach where users benefit from the upside to the brand in the medium term. This is enabled by using blockchain technology to give users a direct economic beneficial interest in the brand.”

Lots of Buzz

Much like NFTS, cryptocurrencies, DeFi (Decentralised Finance) and other buzzwords, many companies and brands are working on developing Web 3.0 systems, touting its benefits to consumers and a way for brand interaction sans the middlemen.

Another huge advantage that marketers say Web 3.0 offers is its addressing of privacy concerns. Shajesh Menon, Founder and CEO, Younion commenting on Web3 Technology and consumers' privacy issues, says that the new generation of the World Wide Web brings with it a world of ubiquitous innovation for brands and marketers.

“With greater collaboration between man and the machine, Web3 helps us design intelligent interfaces that are more user-friendly, highly personalized, increasingly adaptable, easily shareable, with heightened security and privacy. The future of the internet is not just about delivering effective marketing strategies, it’s about bidding adieu to traditional ways of advertising,” he says.

“Decentralization puts the power back in the hands of the creators, brands now need to think beyond selling, and look at building meaningful relationships with customers in order to create partnerships that benefit everyone involved,” adds Menon.

Long Ways to Go

Suraj Nambiar, National Media Head, Tonic Worldwide, points out that Web 3.0 is currently in its infancy where brands are yet to see stable and regulated platforms that offer these services. “Their options with NFT and the metaverse will give brands a great opportunity to engage consumers in the future. Web 3.0 solutions like NFT based on blockchain technology can help decentralise industries to give users security for products and services.  This is done through authentication in the blockchain network.” However, he cautions that these are not foolproof and can be hacked, suggesting that government regulation might give a sense of security for brands and marketers to explore.

Menon notes that Web3 promises transparency where users will own their data and be aware of what others are doing with their information, but as promising as it sounds, it’s a big shift in the way we think about data and democracy comes with its fair share of risks.

“With data being transparent and traceable, it raises questions about the protection of private information and with regulations ranging anywhere from non-existent to lenient to controlling, the gaps are plenty. The fear of the unknown also brings in the added element of vagueness to the mix. For instance, at the recent India launch of cryptocurrency leader, Coinbase, since crypto advertising was under strict scrutiny, we had to take a disruptive creative solution that positioned the global brand as a trusted friend and struck a familiar Indian connection,” he says.

Pawar believes that DAOs (decentralized autonomous organizations) are an interesting idea that marketers can build on - to empower customers and opt for them in decision-making. “For example, Zara can very well seek direct inputs on design choices from DAOs (decentralized autonomous organizations) of customers. These are not simple customer polling mechanisms. They can be used to incentivize the participants with the success of the design, take an instance. This makes for a lot more engaged key customers and influencers,” he says.

Amanjot Malhotra, Country Head - India, Bitay points out that it’s easy to forget how long it took established companies to figure out how to navigate Web1 and make meaningful connections between the Internet channel and their existing businesses.

“Walmart started actively selling online only in 2000, a full 6 years after Amazon’s founding. As late as 2001, other retailing titans like Target, still struggling with e-commerce operations, chose to rely on Amazon’s storefront and fulfilment capabilities, laying the foundations for Amazon’s immense platform business,” says Malhotra, adding that Web3 is developing more slowly than Web1 and Web2 as commercial technological infrastructure, in part because of an ethos among some of the community to actively resist the centralized coordination that can accelerate that evolution.

Future Ready?

Wading into the murky waters of Web3 will seem daunting at first, says Malhotra, adding, “Over time, brands must figure out what works for them through trial and error and observe what succeeds and fails for others. Remember that much like with Web1 and Web2, earnest adoption and experimentation will attract greater rewards. Feigning community membership by co-opting NFT slang in social media posts can backfire by making one appear out-of-touch (so go easy on those WAGMIs), and token NFT art collection efforts will probably get you as far as your dotcom era vanity websites did.”

So while things are still a bit hazy, the potential, marketers say, is huge.

Malhotra and others believe that given India’s expertise in computing technology and the notion that the crypto market is at the vanguard of technological transformation, the country might substantially gain from becoming a crypto innovation epicentre. “An optimal regulatory structure would be one that fosters innovation while minimizing the risks posed by bitcoin through the adoption of effective regulatory guidelines,” he says.

 “With Web3, the value unlocked is that of consumer empowerment. The ecosystem allows consumers to become stakeholders in the brand – through digital assets, NFTs, and experiences, making the internet a safer place for people to shop, stream, work, play and everything in between. Brand experiences are about to get smarter, sharper, richer, immersive, and interactive, in more ways than we can imagine. And we haven’t even scratched the surface, the truly game-changing applications of Web3 probably haven’t even been invented yet,” concludes Menon.