A new buzzword has been sweeping across current online discourse — Web 3.0. Mirroring the blockchain revolution, Web 3.0 has also been dubbed “the decentralized web.” The beginnings of Web 3.0 are already upon us. Change is coming — and fast. New innovations are sparking a shift in the balance of power on the Internet in favor of the consumer. Data ownership will no longer be confined to centralized institutions. Consumers will own and control their personal data. Follow @PermissionIO
Under Web 2.0, a few tech giants dominated the social arena, holding unfathomable amounts of power — and personal data — over and of the general public. Web 2.0 cemented an extreme lack of privacy in the online world. Users were forced to accept the terms and conditions offered to them if they had any desire to participate in digital social connection and stay up-to-date with their peers and within their careers.
In reality, online privacy has always been an illusion. The evolution of the digital advertising landscape ensured this, with tracking cookies and data collection leading to advertising practices that, as a baseline, require copious amounts of personal data to function. The vast majority of websites ignore “Do Not Track” requests, and the tech giants that dominated Web 2.0 all claimed to be fully compliant with the European Union’s (EU) General Data Protection Regulation (GDPR) California Consumer Privacy Act when it was unveiled (despite the fact that it was created to reign them in) by arguing that they fell into the category of “service providers.” These circumstances left individuals totally powerless to accept the fact that their data was being collected, sold and repurchased en masse without their ability to have any say in the matter.
So how will Web 3.0 change this? One of the main tenets of Web 3.0 is to put power back into the hands of consumers. Since privacy regulation is largely ineffective and complete anonymity is clearly an illusion, we should be looking to Web 3.0 for a more practical approach — data ownership and compensation. We can expect increased transparency, more individual control over personal data and heightened personal sovereignty. The days of dehumanizing consumers are ending. People are sick of it, and companies are starting to take notice. Scandals over the past few years have caused individuals to lose trust in big tech, leaving consumers feeling powerless.
This year, Facebook reported its first ever decrease in monthly active users, leading to a 26% drop in its shares in a single day. They blamed Apple’s iOS privacy changes and decreased advertiser budgets that utilize Facebook’s services. This is no coincidence. The giant is finally faltering, thanks to its own disenchanted users. Users are at the end of their ropes when it comes to rampant data exploitation, and this is one of the main reasons the ideals of Web 3.0 have begun to roll in.
Changes have already begun to blossom. With Apple’s iOS 14.5, published analytics data showed that up to 96% of users will opt out of tracking when given the chance. The days of buying data en masse from data brokers and collectors are drawing to a definitive close. Most browsers already block tracking cookies automatically, with Google Chrome announcing their plans to deprecate the software come 2023.
Still, online privacy remains more or less a farce. The data that has been collected is still out there, and it’s not going anywhere, not while it still has value. Federal legislation regarding consumer privacy has not been passed, and neither the GDPR nor CCPA has not proven strong enough to drastically change the landscape for the big players, though the enforcement of GDPR especially has resulted in several large fines.
But as is frequently said, if the cost of noncompliance is merely monetary, then it’s not illegal — just expensive. And money is something big tech has no shortage of.
The question remains: How will businesses and advertisers be able to survive online when consumers are automatically hesitant? The manifestation of individuals taking control of their data means that brands will have to take steps and leverage new technology to create direct, long-term relationships with consumers and offer value in exchange for data.
Asking permission and compensating individuals for their data, especially when their data is being utilized to encourage spending, is a practical and reasonable approach. Consumers have long seen their data appropriated with no real benefit to them, which is part of the reason that opt-out rates are so high. However, 79% of consumers have stated they are willing to share their data in exchange for a reward. Therein lies the answer: opt-in value exchange. In Web 3.0, the reward offered may take many shapes, but in light of developing blockchain technology and growing public interest, it seems cryptocurrency will be at the forefront of the new Internet. Data marketplaces are likely to soon become obsolete. Brands that want to succeed will need to acknowledge their consumers as human and cultivate direct relationships. The recent rise in first-party consumer data platforms (CDPs) has made this increasingly evident. Asking consumers directly for permission to use their data and providing value in exchange for it is the way forward.
Web 3.0 will continue to recognize that the notion of online privacy is not reflective of reality. However, it will do this in a way that puts control back into the hands of consumers and not only recognizes but takes into account the effects of historical online data practices. Overall, this is likely to lead to increased satisfaction on both ends, of the consumer and the advertiser. Consumers feel respected and humanized, while brands are able to more effectively build relationships with their target audiences and collect permissioned, first-party data. Digital advertising in Web 3.0 will certainly be a space worth watching.
This article originally appeared on Media Village and was guest authored by Permission.io’s CEO Charlie Silver. Click Here to view the full article.