A New Mu World
Imagining something is the first step to making it real. Over the past few months, through a series of essays, I have tried to put forth a set of ideas that can solve a big problem that businesses face: how to grow their businesses profitably. With marketing sucking away an ever increasing chunk of the spending, brands need to think differently. This is where the Web3 disruption comes in.
Trying to change the status quo is not easy. Google and Facebook have established their dominance in the Web2 world. There is no single company which can take them on, though a few like Amazon and Tiktok will nibble away. Their valuations reflect the belief that investors have in their strong future cashflows – which are increasingly coming at the cost of brand profits. For now, VCs and PEs are willing to pour money into brands knowing full well that half or more of that investment will be spent on the adtech platforms. But at some point in the future, this ‘free money’ will stop. And then brands will be faced with the question of how they are going to get on the path to profitability. CMOs will need to become Chief Profitability Officers. That will mean looking at alternatives to an endless spending on new customer acquisition.
This will require a different approach. The ad spending problem cannot be optimised at the Web2 level. That game is over; Google and Facebook have won big. This is where the disruptive innovation of Web3 comes in. It is a fundamentally new way to imagine the future by asking the question: what is centralised today that can be decentralised tomorrow? Smart people backed by big funding are building the underlying infrastructure for Web3. Cryptocurrencies, their ups and downs, and government regulations have distracted many from the true potential of Web3. New constructs like the blockchain, NFTs (beyond art and collectibles) and DAOs are laying the foundation for a new world – just like the http protocol, HTML, web browsers and servers did more than a quarter century ago.
In my writings, I have tried to imagine what new worlds we can build on top of the Web3 infrastructure. We need to solve real problems and fix real inefficiencies. And as I see it, there is no bigger one than in the world of marketing – the 50% adwaste that is impacting company profits. The core theme I want to champion is sustainable profitable growth, which needs profit-centric and customer-centric marketing. This is where the idea of Loyalty 2.0 comes in.
