Tobin Nageotte, technology and innovation director with Rothco, part of Accenture Song, looks at what is coming down the line in terms of Web3, the Metaverse and NFTs and what they actually mean for marketers.
“Lost in all the rug pull drops and speculative crypto bro Twitter, the mind-bending possibility of composability and decentralization is often overlooked.”
If the above sentence makes sense, you can skip this article. (There are plenty more to get through on Mirror.xyz.) If not, the below will hopefully act as a helpful primer into the nascent world of Web3. We’ll lean into Blockchain, NFTs, Metaverse, and what it all means for marketers. Andiamo…
Why the “3?”
Way back in the 1990s, we had what is now considered Web1 – static websites, directories, email, and chat rooms. This was a time of Internet Explorer, Yahoo!, and WebMD. Then, somewhere in the ‘00s, along came social media, timelines, Like buttons, and lots of content. Mixed in with the shift to mobile and cloud computing, Web2 is seen as the era of Facebook, Twitter, and Google. Web2 was/is Big Tech global blitzscaling with business models often funded by an exchange of our user data for a service. However, anchored by the technological advancements in decentralization, composability, and 5G network speeds, the next version of the interwebs is upon us – Web3.
What it means for marketers: If you haven’t approved that big, multi-year Instagram influencer campaign, maybe hold off for a bit – things are likely to change.
Blockchain – The Backbone of Web3
Similar to the pivotal, early days of Web1 and 2, today’s generation of goofily-named startups rake in crazy investment at even crazier valuations. Driving this excitement is a technology called the Blockchain – a decentralized public ledger maintained by an independent and anonymous network of servers incentivized by a process called “mining.” In simplest terms, a blockchain allows our data to exist independently – instead of on private servers in Mountain View, Cupertino, etc.
The blockchain means we can move through the digital world with one, universal account. (This is part of the concept of “composability.”) No more logging in each time we want to access the data and/or service associated with each social platform, e-commerce, or news site. A “wallet” will access all of our data saved in the blockchain. Each user independently owns their wallet. The Web3 internet connects in various ways with each user’s wallet/data. Effectively, websites will look more like tools that we allow to interface with our data. If we don’t like a platform’s experience, we can take our data and go somewhere else. This paradigm shift in control will require a total overhaul of value propositions across the internet between user and platform.
What it means for marketers: The words “permissionless” and “decentralized” will soon send much of the industry into fits. If users own their data, then tech companies don’t have data to gather and marketers don’t have data to buy. Brands will need a new approach – likely something that trades on utility and value for the consumer rather than attention.
So…a Decentralized Internet That Doesn’t Need Advertising to Exist?
The impact of freeing data from private servers moves the conversation from Web2’s – “You use our service, we sell your data, targeted marketing, repeat cycle.” – to one of the common questions around Web3 – “Who pays for it?” This is where the mechanics and behavior changes of Web3 get theoretical and complex. But the Web3 experiment has definitely begun and significant capital and human resources are going into the next generation of tools trying to answer that question. One of the central themes is that our current platforms – Facebook, Instagram, Twitter – centralize around a comparatively small cohort of influence and often optimize for fringe or even radical content with snowballing, in-real-life impact. With Web3, new platforms will allow us to collectively unbundle into an infinite number of communities organized around shared interests or goals. New metrics pegged to “digital value” will reflect a desire to pay content creators or groups directly for what they’ve created. Imagine access to experts for anything and everything…what would that be worth to you?
What it means for marketers: It’s likely more brands will exist entirely because of and for their community. Web3 will accelerate and tighten feedback loops between brand and community to the point where the two may be indistinguishable. Platforms such as Strava (“Your goal is our mission”) are interesting existing models to consider. Strava built a simple (but very useful) tool that attracted a community. As a brand, they sit as a leader and authority within the Strava community and the many sports their community members play. But, more importantly, their delta of Product-Brand-Community is in effect a circle – which enables them to constantly innovate and create new business opportunities.
The dynamics of digital “value” are currently playing out in the world of Non-Fungible Tokens (aka NFTs). More than an “overpriced jpeg,” NFTs are unique, irreplaceable, ownable assets that live on the blockchain. Often manifested as digital art, NFTs also represent membership, governance rights in a collective, or a tradable digital entity that constitutes an actual, physical object in real life. Clumsily explained, NFTs are a mechanic to define and measure value in Web3 and a big step toward answering the question – “Who pays for it?”
NFTs give people more ways to engage with the content and brands they love. The Web3 ecosystem likely demands a reshape of brand marketing to align with what will be a creator-led digital economy. Tomorrow’s audience will engage directly with a brand or creator without an intermediary (ie. Web2 social platforms). We’ll see evolutions in creative expression and collaboration. Just like in Web1 and 2, new platforms and tools will change behaviors, requiring creators, brands and consumers to reconsider not only the value exchange in their relationship, but perceptions of authenticity, authority, and originality. (How would a brand engage with communities like ConstitutionDAO or KlimaDAO?)
What it means for marketers: The complexities of comms planning in Web3 alone will require marketing to move closer (in all aspects) to the product/service of the business itself. For example, a DIY superstore chain could develop a community platform that monetizes home renovation experts. This could pay for itself through just the consumer insights. But, additionally, across the business – Research, Strategy, Product, Marketing – value would spring from the “Reddit for Irish Home Renovators.” Further, the brand would have a unique, ownable, and leading relationship with their market.
It’s understandable to imagine the Metaverse as a single, Ready Player One video game. But, in reality, the (debated) definition of “Metaverse” could also be anything representing a digital version of reality. Somewhere in between, it’s more helpful and accurate to imagine the Metaverse as any digital environment where users congregate. These digital spaces borrow heavily from video game mechanics, but the purpose and utility of some of the most popular Metaverse platforms – Decentraland, Sandbox, Horizon – isn’t specific to gaming. These are spaces where individuals explore concepts of identity and community. It’s where relationships are built in Web3. We first normalized friendships with people we’d never met on AOL and, later, romantic relationships sparked from dating apps. What will result from the increasingly immersive and engaging experiences that make up the Metaverse?
What it means for marketers: Same as above. Give consumers something useful and let them connect around it. A DIY superstore that helps people “build” in the Metaverse could be a winner. As could an energy supplier who sustainably offsets in real life based off certain user behaviors in the Metaverse.
The ongoing conversation around anonymity and verification online will continue in Web3 as humans define and redefine ideas of self and identity in the digital space. Likewise, brands will need to flex and bend to fit into different platforms and conversations. Similar to when our industry considered “digital strategy” as re-purposing a broadcast film into a square Instagram post, brands will need guidance into the many different digital spaces where people will congregate. Already, we’re seeing a shift from the one-way influence of Web2 social media into more empathetic, encouraging conversations in and around Web3.
If Web2 social feeds are like a celebrity working their way down a red carpet, occasionally acknowledging the screaming fans and demanding paparazzi, then Web3 is a group of people around a campfire sharing and collaborating. In this world, authenticity and participation are more valuable than “influence.” To be accepted, brands would do well to move past the “commercial celebrity” label and try to provide value and utility to the creators at the campfire.
It’s still early and a lot of Web3 remains conceptual. But as we saw when Google started crawling websites and Steve Jobs put out a phone, things gather momentum faster than we can perceive and always with unexpected results. Like AirBnb and Uber in Web2, what trapped value could Web3 unleash? Could new assessments of value aligned around shared equity, knowledge, and motivation (traditional fundamentals of the human condition) deliver an era of creation and building? Much remains unclear, but the gathering momentum strongly encourages all of us to switch from “wait-and-see” to “let’s-get-involved-and-learn.”
Tobin Nageotte is Technology and Innovation Director, Rothco, Part of Accenture Song