Issue #11: How will web3 impact data-driven marketing?

Web 2.0 was a marketer’s dream. We had access to all sorts of data until Apple rolled out iOS 14.5 in 2021, putting iPhone user privacy first. Then they made our lives even harder by adding privacy to Apple Mail, meaning we can no longer see who is (and isn’t) opening our email campaigns. Two wins for privacy but two kicks in the gut for marketers.

Customer data is one of my company’s biggest assets. Maybe yours too. But in a world ruled by wallets—not email addresses—and where privacy is valued most, will we still be able to collect and use customer data? And how might it look?

Photo by ThisisEngineering RAEng on Unsplash

Web3 offers complete anonymity to those who want it. A person’s online identifier is their wallet address (a long string of letters and numbers) and they can choose to have multiple wallets. And although we won’t have access to information like the wallet-holder’s age or income (unless they give it to us), we may have access to something more meaningful: their activity on the blockchain.

The blockchain offers total transparency. Anyone can see what a particular wallet address is buying, selling and holding on a public blockchain. In the current phase of web3 adoption, that’s unlikely to be of any use to you. But in a future hypothetical world where most online transactions happen on the blockchain, it unlocks a whole new level of consumer data.

How will we collect this new data?

In our current online world, it’s straightforward. Someone signs up for our email list and our CRM collects their email address—and maybe also their name and phone number. When they buy from us, we collect even more data about the customer. We know which product categories they’re interested in, how much they spend with us each time, and how much they’ve spent with us overall.

If a customer buys from us on the blockchain, we now have this customer’s wallet address, giving us a full view of their behaviour across the blockchain—not just their interactions with our brand. We could see what products they’re buying, what communities they’re a part of, and who they’re following. Which, arguably, is more meaningful than their name, income or occupation.

We’re still a while away from mainstream adoption of web3, so let’s use Starbucks to illustrate how this could play out for a Web 2.0 brand entering into web3 right now. Last month, they announced that they’ll be planting a foot in web3 by launching their new loyalty program, Starbucks Oddysey, on the Polygon chain. An announcement on their website explains:

Once logged in, members can engage in Starbucks Odyssey ‘journeys,’ a series of activities, such as playing interactive games or taking on fun challenges to deepen their knowledge of coffee and Starbucks. Members will be rewarded for completing journeys with a digital collectable ‘journey stamp’ (NFT).

This opens up a whole new world of qualitative data and new ways to segment their most loyal customers. I don’t yet know what these “journeys” will consist of, but Starbucks is far too savvy to let a customer research opportunity slip, and gamifying it simply gives customers an incentive to share their personal data.

Members can also purchase ‘limited-edition stamps’ (NFTs) through a built-in marketplace within the Starbucks Odyssey web app experience. Limited-edition stamps will be available for all members to purchase directly with a credit card. No crypto wallet or cryptocurrency will be required.

For the general public to use Starbucks Oddysey, it needs to be as user-friendly as possible. Web3 is only just nudging into the early majority stage, meaning most people don’t yet have a wallet—or the savvy required to set one up and use it—so it makes sense that Starbucks would opt to hold their members’ NFTs for them. In technical terms, this is called custodial ownership; their members “own” the NFTs, but Starbucks holds and controls them.

Now, let’s peer into my crystal ball and imagine that it’s 2025 (give or take a dozen years). Blockchain technology is a part of our daily lives. Gen X-ers show off their digital ticket stubs from a Rick Astley concert on decentralised social media. Wallets are as prevalent as Gmail addresses, and we use our wallet to login everywhere we go online. We likely won’t be calling them "wallets” in 2025, but for the sake of this article I’ll use the concept of a wallet addresses representing our online identities.

Hypothetically, Starbucks could let you connect your personal wallet—or the 2025 equivalent—for you to show off as part of your online presence. And by doing so, they might add your wallet address to their database, which opens up a whole new level of data on your purchasing behaviour—not just with their brand, but with others too.

How will we use this new data?

Since all of this data is out in the open, it levels the playing field. A freelance marketing strategist working from her spare bedroom will have access to much of the same data that a big company like Starbucks does. So with potentially more data than ever before, right at our fingertips, how we use the data becomes more important.

Challenge #1: Distilling the data so it’s useful

I don’t remember much from my university days, but oddly I do remember a quote from Information Systems 106: “garbage in, garbage out”. The insights and information you’ll derive will only be as good as the data you analyse. Access to loads of customer data means we’ll need to know what is worth collecting, and what’s just adding to the noise.

Knowing every single transaction that every single one of your customers has made across the internet is likely useless to you. On the other hand, tallying how much they’ve spent with your key competitors could be a handy metric to track. As web3 adoption increases, and more transactions move to the blockchain, CRMs will need to evolve to handle this new data and distill it in a way that’s useful for their users.

There are several promising web3 CRM platforms, but most currently focus on tokenised communities—giving community managers a way to manage and understand their members. Kazm and Blaze, for example, both allow you to segment your community members and build profiles based on their activity across the blockchain. Both give you a way to build audiences of wallets holding similar NFTs, so you can target them to grow your community. But once you have their wallet address, how do you communicate with someone?

Challenge #2: Communicating with wallets

For wallet addresses to replace customer email addresses in our CRMs, web3 needs the equivalent of an email protocol. Only, using wallet addresses instead of email addresses. Several “wallet chat” style protocols exist, but they require adoption on both sides: the sender and the recipient. Otherwise it’s like sending emails to an inbox that nobody checks.

Many NFT projects have “airdropped” (the web3 word for “sent”) tokens to the wallet addresses of prospects. But most savvy users know not to touch anything airdropped to them as the web3 world is rife with scams that can drain your wallet.

If an email equivalent eventuates, how will we protect our wallets from spam and scams? This, I don’t know. Until there’s a solution, marketers will need to keep collecting email addresses as a way to communicate with their customers and prospects.

Challenge #3: We don’t know all the challenges yet

Many questions linger in the air as I’m writing this article.

How will corporations that rely on user data for their revenue (Meta, Google and friends) react? How will your everyday consumer feel about having all of their transactions publicly available (albeit with the option of anonymity)? Will governments intervene and create GDPResque laws to protect users’ privacy?

We don’t know what we don’t know yet. What we do know is that the data we collect and use as marketers has significantly shifted in the past few years, and will almost certainly change as web3 adoption increases. All we can do is observe, learn and prepare as best we can.