Metaverse and Web 3.0 or, Why is the World Going Crazy and What Should Marketers Do About It
As a marketer, you’ve probably noticed that there’s been a huge buzz in the online world: “The internet is changing!”, “Everyone is going crazy over NFTs!”, “Metaverse is the future!”, “The first tweet sold for over $2 million!”, etc. If you’re wondering what’s going on, why people would spend millions of dollars on digital items, or how marketers can approach these topics, stick to the end. I’ve spent the last few months deep-diving into the matter and I’ll share my perspective here.
As much as the COVID-19 pandemic has hindered the world’s economy and growth during the past two years, technology has been growing, shifting, and expanding like there’s no tomorrow. I’m referring to AR, VR, and Blockchain technologies.
AR and VR adoption has been growing at a whopping 10% starting from 2019. Bitcoin, the largest cryptocurrency by market capitalization, has surpassed its all-time high twice during 2021, reaching $68,680 on November 10. Moreover, it is estimated that over 100 million people will be experiencing AR or VR at least once a month in 2022, and blockchain industry experts expect no less than $100,000 for BTC in 2022.
The term Metaverse has exploded in the news after Facebook revealed its changing its company name to Meta. However, while movies like Ready Player One and some other flashy titles tried to demonstrate what the Metaverse may be, Google search results show that most people do not really understand what to expect from this emerging technology.
So, what exactly is a metaverse? Can there be multiple metaverses? How is this technology going to change the way we market to our audiences? Let’s find out.
What is the Metaverse?
In simplest terms, the Metaverse is a new, 3-dimensional way for users to interact with content online. For example, instead of browsing an online store on your phone or laptop, you’ll be able to traverse the 3-dimensional model of the store using your in-game character or avatar.
You’ll also be able to virtually teleport from one store to another — much like the way you close one website and open another one — in the Metaverse. On top of this, with the integration of VR headsets, users will be able to “feel” and “touch” the products, taking the experience to a whole new level.
Here is a very basic example of the above:
Imagine you want to buy a bottle of Champagne, but you have no idea which one you should buy.
Currently, you have a couple of options:
A. Go online and get some basic information about different types of Champagne, understand how they are stored, made, etc.
B. Find an online expert liquor store and browse their website. You can then contact the shop via the phone or live chat and ask a couple of questions to help make your decision.
C. You’ll either have to drive to the liquor store and pick up your Champagne or get it delivered online.
With the inclusion of the metaverse, you’ll get the option to jump onto your online avatar, go to the liquor store, meet the expert, even get a free tour of the whole virtual factory (which is a replica of the real/physical factory) experience the whole process, pick the drink you want, and get it delivered to your doorstep.
Because there isn’t a real, complete Metaverse around to date, it’s hard to pinpoint exactly what it will look like. However, there are 7 core principles that Metaverses need to have, which we can sum up as the following:
The Metaverse is persistent, it never stops or ends, it exists in real-time, and is open to everyone who wants to join. Users can create, buy, and sell various products, and be rewarded for labor that provides value to others. All content is user-generated with an extremely long list of contributors. Finally, users can “migrate” their digital assets from one game or event to another.
What is Web 3.0?
Web 3.0, also known as the decentralized web, is the next step in the world of online business, which combines and expands on the basics of Web 1.0 and Web 2.0. Let me explain briefly:
Web 1.0 represents static content — a boring mix of words and images with no user interaction whatsoever.
Web 2.0 refers to dynamic content — videos, social media posts, stuff that responds to user input.
Put those two together, add 3D, and voila, you get Web 3.0 — a virtual space within the internet. In this perspective, an e-commerce store is transformed into a digital shopping mall, for instance. In case you’re wondering, the same is true for apps. Our beloved Siri is a living representation of a Web 3.0 app — something that can summarize large amounts of information and turn it into knowledge for users.
Decentralization is at the core of Web 3.0. Nowadays, whenever you do something online, you essentially utilize the HTTP protocol to find information stored on localized servers, at a precise location. Decentralization allows for information to be held on millions of servers across the world at the same time, each carrying the exact same data as all the other ones.
Why is this important?
- No intermediaries — There are no third parties that “help” you exchange data with other users. You will not need a Twitter account to make a tweet. You will simply go to Twitter.com and make a tweet, just like that.
- No Data Theft — If data is stored on a single, centralized server (most commonly in the Cloud), data thefts and breaches become inevitable. However, it’s extremely hard to steal data that is stored on a million servers at once.
- No Third-party Authorization — You won’t need anyone’s permission to access your data like you do today. This will dramatically improve the privacy and security of personal data.
This is where blockchain technologies and cryptocurrencies come in. Simply put, a blockchain is a network of interconnected computers that store and replicate the exact same data across all participants, guaranteeing its transparency and immutability. Moreover, anyone can become a blockchain network participant without any third-party interference.
The role of blockchain and cryptocurrencies is paramount to the bright future of the Metaverse, due to the decentralized nature of the technology. Web 3.0 is a completely new way of looking at, and interacting with, content, be it gaming, education, or entertainment. And the best part is, no one really knows the “how” -s, “what” -s, and “when” -s, yet. For instance, Audius, a musician-first blockchain platform allows anyone to distribute, monetize and stream their audios, without any intermediaries like producers. My point is, everyone stands at the very beginning when it comes to Web 3.0, and they do whatever they feel is best. The same can be said for marketing!
Metaverse Marketing Principles
As technology is evolving, marketing strives to keep up. We see this in the moves of the biggest brands like Adidas, Deliveroo, Verizon, who are trying to establish themselves as leaders in this new age. While the truth is that no one has a clue whether they are working in the right direction or what marketing will look like in the next five years, there are a couple of marketing principles that have proven themselves among all others.
NFTs (non-fungible tokens)
First things first. NFTs.
You’ve probably heard of these bad boys already, like the one where the first tweet of Jack Dorsey, Twitter Founder, was sold for the equivalent of $2.9 million, or this piece of art that depicts the ex-president that sold for $6.6 million. If any of you need some more insight into NFTs, check out this video, it explains everything you need to know.
So let’s quickly understand the difference between fungible and non-fungible assets (or tokens for that matter). Fungible assets are interchangeable in the sense that every fungible token from the same ecosystem holds the same value as the next one. This way, every $20 bill has the same value as any other $20 bill.
NFTs on the other hand are radically different. They are unique, meaning that there can be no two of the same NFT, and they don’t have the same inherent value as a Dollar bill. What they do have though, is applied value based on demand, scarcity, rarity, and the reputation of the creator (aka the business or brand) in the same way that other collectibles have value in the marketplace.
Now, NFTs don’t necessarily have a marketing perspective — they are commonly viewed as an investment or art — but this may change very quickly with Metaverse marketing. One of the main goals of an NFT is to provide a sense of exclusivity, prestige, or belonging to the owner, and brands can leverage this in a plethora of ways.
For instance, you could host private events for customers who own an NFT from your brand, or you could add special discounts for people who own an NFT from a specific collection. Another thing is digital fashion — if your online avatar is going to represent you in the virtual world, you’d better be ready for digital fashion wars! Even digital food is a thing, yes, you read that right, digital food. There is a whole list of activities that’s being constantly updated here.
What’s also important to understand is that an NFT cares very, very little about looks and design. It’s more about the experience and community. It’s like a modern VIP card for the inner circle that may not make much sense to outsiders at first glance. From a business standpoint, the value of the NFT is directly correlated to the value of the ideas that the business and its users care about.
The collection and the design of the NFTs shouldn’t simply revolve around the products you’re selling or the services you’re providing. Rather, they need to showcase the idea that you are trying to promote, and the people who stand with you. There is a small catch though — working with NFTs requires marketers to understand concepts like airdropping, whitelisting, collection design, etc. The good news is I’ll be doing a separate deep-dive on those topics in the future!
OK, I want to drop this right off the bat.
The Metaverse and Web 3.0 will change the way we operate, market, and approach customers. Metaverse gaming though is going to revolutionize the whole, billion-dollar gaming industry.
For decades, companies and individuals have invested billions of dollars into gaming and its assets, but all of these have always been owned by gaming companies. That’s going to change 180 degrees with Metaverse and Web 3.0. Suddenly, gamers become the owners of their assets and get the option to acquire (via in-game or other means), buy, and sell these assets on secondary marketplaces. Games will gradually become “play-to-earn” versus the current “pay-to-play” or, how gamers sometimes call it, “pay-to-win”. With Metaverse, the time investment directly translates to value in the form of virtual assets, land, NFTs, etc. which can be sold for real-world money. With this scenario, recently, a whole community in the Philippines was saved from poverty!
NFTs play a crucial role in Metaverse games. Even today, endeavors like Decentraland — a virtual world owned by players where they can build, buy, sell, and rent real estate — allow users to take complete control over their assets in the form of NFTs. Another example is The Sandbox, where you can buy land, build property on it, and later sell the NFTs of those properties on markets like Open Sea.
While these environments are at their early stages and current players are just early adopters, more people, and even corporate businesses, are going to join as the trend continues to grow. For marketers, this opens up a plethora of opportunities — you’ll be able to advertise in these digital worlds, place billboards, host events, build and customize your brand stores, offer exclusive valuables — imagination is the limit here!
The gaming space is inevitably going to become a mature market, and to make the most out of it, brands will need to exist in that space permanently. And I really mean permanently. One could argue that getting alongside gaming content with advertising is good enough, and honestly, they wouldn’t be completely wrong. However, this will only work as a short-term solution. The real opportunity lies in co-existing with these communities, understanding their needs and culture, and delivering upon those, over and over. Adidas has already started working in this direction. The brand has recently acquired a plot of virtual land in The Sandbox Metaverse and launched its first NFTs.
Keep in mind that gamers are a very sophisticated bunch, they value direct communication and traditional advertising doesn’t get through to them. They are also very community-oriented and tend to follow in the steps of their favorite pro-players (buying the same gadgets, using the same gaming equipment, etc.) I cannot say that I am working on a game yet, but Metaverse gaming is fascinating and I’ll be deep-diving into this topic in the future!
Social media is an insanely large part of modern-day marketing, and it’s not going anywhere. On the contrary, it’s embracing the Metaverse! Just look at these facts:
1. Facebook sees itself as a Metaverse company. Enough said.
2. Snapchat has made it possible for brands to get started with AR on its platform via Lens Web Builder. They have already released their 3D spectacles and the 3D bitmojis are the icing on the cake.
3. Snapchat’s “try on” feature allows for brands to optimize their sales for more purchases and fewer returns. Customers can “try on” sunglasses, shoes, hats, jewelry, etc. Other platforms even allow users to visualize how furniture or other items would look like in their homes.
Building Relationships and Communities
Healthy, meaningful customer-brand relationships are at the core of Web 3.0 marketing, and any brand that isn’t striving to achieve this is risking being left out of the competition.
Yes, there are still many unknowns and strategies are changing rapidly, but it’s essential to keep trying to achieve this goal and become an early adopter of relationships-first marketing techniques.
If you take a quick glance at the blockchain space, you’ll quickly notice two things:
- Advertising isn’t the greatest of channels. The blockchain community — both companies and individuals — encourage DIY research and ads with their intrusive nature don’t flow well with this idea.
- Community is an essential aspect of any blockchain project. I want to make it clear. Community is the number one thing that people pay attention to when evaluating blockchain projects. If there isn’t an active and responsive community behind your project, you’re history.
What I’m trying to get across is that you need a mindset shift. Since data is going to be decentralized, we will have to change our mindset and approach to marketing. Decentralization is about users, about them taking back their data privacy, and about them getting rid of intermediaries that add cost in exchange for “convenience”. Think of Visa and Mastercard, and you’ll see what I mean. And what do we know about users or people in general? That’s right, people have a herd mentality, and the like-minded ones form communities, and communities are driving the aspects of Web 3.0. Instead of advertising, you need to start focusing on building communities, or if that seems too difficult to start with, at least join an existing one.
Who Will Be Affected by Metaverse Marketing?
TLDR: Everyone. How? No Clue.
That’s the truth, and it’s both fascinating and terrifying at first glance. All the areas of digital marketing are going to change in one way or another, it’s inevitable. While we can only guess how these areas will turn out to be, I’d say content marketing is somewhat easy to imagine. It will become 3-dimensional, and it will need to focus on “touching” and “feeling” products, rather than simply showcasing them via images and videos. With regards to SEO though, nothing is clear in any sense. The only thing we know is the experts’ view that visual search will play a key role, even though nobody is sure how exactly it will work.
It’s important to understand that while everyone who’s trying to enter the Metaverse is either big brands or startups striving to become early adopters, it’s going to become mainstream for everyone at some point. It may seem to be a long way off, it may seem like the wild west, but this is the future. As marketers, we better get ready for it and stay up to date with the news.
I hope this has been an interesting read for all of you. The ideas of metaverse and web 3.0 fascinate me and I can’t wait to see how this new space evolves in the future. But, now it’s your turn — what are the most interesting topics for you to discuss? What do you think are your biggest challenges in metaverse marketing? What would you like me to talk about in the next post? Share your thoughts and ideas in the comments!