Data means many things to marketing. It’s the fuel to effective marketing campaigns, the compass to growth in the business jungle, and the key to rendering maximum value to customers and extracting maximum business value from them.

The more accurate the data, the more effective a business’s marketing. Everyone knows it. 

But in the world of Web3, where data privacy is a fundamental demand that’s (seemingly) fulfilled by its underlying infrastructure, blockchain, how does marketing survive and thrive?

In a private internet ecosystem, how do marketers reach potential users?

Well, would you believe us if we said there’s a way out… or rather, there’s a way marketing in Web3 can be even more accurate and targeted than it was in web2. And the best part is, it does not compromise user data privacy.

That’s what we will discuss in this blog. We’ll explore what Web3 data privacy means, how it impacts users, and how businesses and marketers can create effective marketing campaigns in the privacy-first internet ecosystem.

What is Web3 Data Privacy?

Web3 data privacy refers to protecting user data on the decentralized internet. It’s a critical aspect of the Web3 ethos, promoting user control over personal data and reducing reliance on centralized entities.

This is a step away from how many of the biggest web2 companies have designed a business model around attaining as much user data as possible. It aims to balance the scales and put users back in control of their data.

But how did we get here?

When online shopping was still in its nascent stages, shoppers couldn’t reliably store their items in a virtual shopping cart. 

To solve this problem, Lou Montelli, a programmer, created a piece of code called a cookie to store website data reliably on a user’s computer. 

After he filed for the patent of the technology, advertising companies realized the potential it held and started using cookies to follow users around with ad campaigns. 

Then, with the advent of web 2.0, when user-generated content was on the rise, tech giants like Apple, Google, Amazon, and Facebook built massive data centers to store and process the vast amounts of data generated by their users. 

These companies then started monetizing this data by using it to target ads to users and develop new products and services. This led to a business model where users’ personal data is collected, stored, and analyzed on a massive scale.

That created the first issue around user data — every bit of information related to a user, from the time they first unlock their phone to every link they click or every word they read, is collected by multiple companies in centralized servers. Users weren’t given a choice, not one they’d be comfortable making.

Then, the centralization of data led to single points of failure. And illicit actors have used that to hack, steal, and illegally use the data of hundreds of millions of internet users. This further compromised the security of user data.

So, policymakers, like in the EU, have created stricter regulations that prohibit the storage of data. And companies like Apple have released privacy features to give users more control over how apps track their data. In an attempt to compete with Apple, Google is also introducing new security and privacy features for its search engine and Android devices.

While these are steps in the right direction, companies can still continue collecting user data by circumventing them. In the case of third-party cookies, companies can use confusing language and pre-checked boxes to get consent from users and continue tracking them. 

Web3 infrastructure and platforms built using it are an attempt to solve the user data privacy crisis. And the privacy thus attained is what we refer to as Web3 data privacy.

How Does Web3 Change Online Data Privacy?

The decentralized nature of blockchain networks offers better data protection through the following features:

1. Pseudonymity: In the blockchain ecosystem, users have pseudonymous identities. This means all users have corresponding cryptocurrency wallets, referring to a string of characters on the blockchain. These cryptographically generated pseudonymous addresses of users are not linked to a person’s real-world identity.

2. Permissionless protocols: In a permissionless and decentralized network, such as Bitcoin or Ethereum, there is no need for Know Your Customer (KYC) processes or identity verification processes as long as users use a decentralized application (dapp). 

3. Decentralized digital identity: Users can issue and control their own decentralized identifiers (DIDs) or self-sovereign identities (SSIs) for Web3 interactions. They don’t have to rely on traditional identities issued by government entities or Web2 identifiers like social media handles for verifying themselves during online activities. 

4. Decentralized servers: Decentralized servers protect user data by distributing it across multiple nodes within a network. This eliminates the reliance on a single central server, making it more difficult for hackers to access or manipulate the data. Additionally, decentralized server architectures often employ encryption and other security measures, ensuring the confidentiality and integrity of user data.

5. Zero-knowledge proofs (ZKPs): Through cryptographic protocols, zero-knowledge proofs protect user data by allowing individuals to prove the validity of certain information or statements without revealing the actual data itself. This ensures that user data remains confidential and secure even during interactions and transactions. ZCash, Aleo, zkSync, and StarkNet are some networks working on ZKP-powered blockchains for true privacy.

All of these work toward one common goal — ensuring user data privacy on Web3 and offering users more control over their data.

But web3 data privacy brings up a huge question for projects building in web3: how to create or target marketing campaigns without accurate user data?

Well, let’s check that out.

How Does Web3 Privacy Change Marketing For Businesses?

Businesses need user data to develop their marketing campaigns. But the manner in which web browsers use third-party cookies to collect data and track customers’ online behaviors have led to deep suspicions.

No wonder 88% of Apple users worldwide have opted out of ad tracking after the iOS 14.5 update. 

Web3 technology has brought a more structural change to data privacy, bringing in more robust features to protect user data. 

The question is: how will businesses access data for marketing? Will web3 privacy spell doomsday for the marketing industry?

Absolutely not.

Let us explain how businesses can analyze blockchain data to build their marketing campaigns.

Analyzing on-chain data for marketing

The advantage of blockchain ecosystems is all data is published on-chain, which can help companies with their marketing campaigns, while also allowing the user to opt-in with their data to receive more value.

Let us illustrate the point with an example. 

Bob uses a web3 ticketing platform to only purchase tickets for rock music concerts. Some live concerts happen in the metaverse and others in physical arenas.  

The ticketing platform issues concert tickets as NFTs for user wallets to prevent ticketing fraud and also as tradable memorabilia for attendees. Concert-goers need wallet authentication as a fool-proof mechanism to enter these concerts.

Bob doesn’t like to use his real-life identity in the web3 space. His crypto wallet address (a pseudonymous string of characters) is his only identity.

As soon as Bob completes the payment, the ticketing platform sends the ticket to his wallet. Later, he authenticates his NFT ticket to attend a concert.

With each ticket purchase and authentication, the blockchain where the NFT is based immutably records the data on-chain, with Bob’s consent. This data is crucial to develop a marketing strategy and unlocking more value for Bob.. 

How?

The ticketing platform can analyze Bob’s purchasing behavior and send updates about upcoming rock concerts. The platform doesn’t bother him with unnecessary advertising about classical concerts or other events.

Although Bob remains pseudonymous, it doesn’t affect marketing campaigns. This is because, to market to Bob, you don’t need to know who Bob is in real life. Bob can be literally any use in Web3.

You can analyze their online behavior to curate user personas and reach out to them with engaging marketing campaigns.

In this case, the ticketing platform can associate Bob’s wallet address with rock concert ticket purchases. Thus, they can periodically send such concert updates to drive more sales. Bob sees more of the bands he loves, and the bands and venues increase sales. It’s a true win-win.

Rather than surreptitiously collecting user data, the ticketing platform can also incentivize people like Bob to share more data with them or other third-party dApps. Incentives can mean special discounts and loyalty points for membership card holders.

Now that we know there’s a way to perform effective marketing without prying into users’ daily lives, the question is, how do we actually do that? This is where a web3 marketing platform like Raleon can help you.

Raleon: The one-stop destination for privacy-preserving marketing

It is wrong to assume that web3 doesn’t have adequate data to build a successful marketing campaign. There is enough on-chain data to build successful campaigns.

But the challenge is to access the data, organize it, and analyze it to build a data-driven web3 marketing strategy. Tools like Raleon help marketers access all data within a single dashboard with detailed project metrics.

Raleon also offers unique tools like action prompts that help marketers target users based on their on-chain activity. The decentralized exchange, Clipper, grew its liquidity providers by 20% with a single action prompt campaign.  

Moreover, Raleon’s attribution engine combines data from web2 and web3 platforms to better understand customer behavior, identify successful campaigns, and evaluate conversion ratios across web2 and web3.

Marketers can also use Raleon’s Audience Builder to create a list for airdrop marketing or other marketing strategies and then go to the Campaigns section to design customized content marketing campaigns.

Additionally, the backend user graph can associate multiple wallets with a single user. This is very effective for creating personalized campaigns and promoting products to users across various activities.

With Raleon’s web3 customer data platform, businesses and companies can harness user data to develop successful marketing campaigns in a privacy-friendly manner.

Future of Web3’s Privacy-Preserving Marketing

Web3 offers a unique opportunity for users to protect their privacy and have sovereign ownership over their data.

But that doesn’t mean that businesses cannot access any data to optimize customer experiences or build effective marketing campaigns.

Marketing platforms like Raleon help preserve user privacy while assisting businesses to collect and analyze user data for marketing.

Click here to sign up for a free Raleon account today and start building the most effective web3 marketing strategy for your project.