Why is building an app on blockchain helpful for brand marketing?

Are Cryptocurrency Products Really Useful? Alana Levin, partner at venture capital firm Variant, believes that building apps on the blockchain can provide unique marketing advantages. This is because observing long-term and cross-application user behavior can serve as a crucial analytical tool for precise marketing.

This article is compiled and translated. For any discrepancies, please refer to the original source.

Is Cryptocurrency Integration with Traditional Industries Underwhelming?

At the current stage, integrating things in the cryptocurrency field with traditional industries often encounters this problem:

It's actually short-term thinking. The true potential of blockchain technology and the Web3 concept lies in the ability to "long-term" generate new functionalities from the data aggregated on the chain. In terms of marketing, on-chain data can provide insights into user behavior over a long period and across applications, which is a new information network that may not exist in Web2.

Referring to this new type of user information network as "metagraphs" - beyond existing applications, one can see new user behavior patterns and relationships, which can expand the design space for products and marketing to better attract consumers.

Blockchain as Metagraphs

Cross-Application Data Trajectories

Blockchain is an open, permissionless database. Users interact with applications through wallets, which are located on the data layer of the chain.

Levin believes that wallets are similar to cars, both transporting users from one destination to another, with each destination being an app. Therefore, wallets can provide records of user interactions and behavior across different chains and applications.

Indirectly, blockchain becomes an information network that can be used to segment customer behavior, identify power users, and enhance meaningful marketing activities. Blockchain technology will help break through the traditional marketing "blind spots." For example, if there are two fans who both like a musician:

• Fan A: Listens to the artist's music on Spotify for five hours every week, saves every photo on the artist's Instagram, subscribes to the newsletter, collects vinyl albums, buys merchandise, and attends concerts in town.
• Fan B: Listens to the artist's music on Spotify for ten hours every week, without doing anything else.

Which fan is more like a super fan? Clearly, it's Fan A. However, most consumer behavior is untraceable, and some are not even consumer behavior. Therefore, if the musician wishes to find fan feedback or market new products, they can only evaluate based on visible data. If the musician chooses Spotify as the only evaluation criterion, it may disappoint true fans, and the musician's expected revenue may also decrease.

Blockchain can change this phenomenon. By placing information and activity records on the chain, sellers can have a broader reference point, allowing applications, creators, brand merchants, and advertising clients to refer to more precise data.

Below are examples of data types that can be obtained on the chain in the future:

• User subscription data for newsletters through Mirror
• User activity records in decentralized applications like Lens, including likes, comments, saves, and shares
• Records of users purchasing goods on the chain
• Records of users buying music on Sound
• Records of users purchasing tickets on the chain
• POAP records of users attending concerts

Individually, none of these would be a significant improvement of blockchain on existing products. However, when combined, it's 1+1>2, turning data into meaningful consumer trajectories, spanning across products and domains with robust data.

Long-Term Data Dimension

Aside from breaking barriers across applications, another dimension - time - will also be extended in metagraphs.

Every user behavior on the chain has a timestamp, and third-party developers can combine events that occurred on specific dates and times from various angles for specific analytical purposes to obtain long-term user behavior trajectories.

Tracking an individual's long-term behavioral history can lead to more precise customization of marketing means, strengthening emotional connections between users and brands. This is very difficult to achieve in the Web2 industry unless the application itself has been around long enough to have such complete data.

Features like iPhone photos or Meta's annual reviews can indeed enhance user stickiness to the platform. However, many new brands cannot utilize this function or find it costly, making it an unfavorable environment for new apps, which explains why there have been fewer new consumer applications in recent years.

Web3 will change this phenomenon. With low-cost analytics on the chain, it can bring a delightful user experience.

Why Aren't Similar Concepts Seen Now?

At the current stage, the market often focuses on cryptocurrency products themselves. The problem to be solved has never been referred to as crypto-related issues; on the contrary, it should be how to apply cryptographic techniques on top of existing applications and products.

In the short term, most Web3 applications may appear to have almost no difference from Web2. The real "aha moment" will come in the next few years, as the cross-application and cross-time capabilities of Web3 products will undergo a qualitative change, greatly enhancing competitiveness.

Note by the author: An "aha moment" refers to the critical point where a product makes users understand its value, becoming an opportunity to attract relatively high-value users. It is often used to evaluate improvement indicators for product growth. For example, Meta's internal data found that new users who added seven friends within ten days typically had much higher retention rates compared to those who didn't add seven friends, providing clear direction for the product team's efforts.