Shingy likes Meta, Web3 won't replace Web2 and other metaverse predictions

Web3's impact on marketing took center stage at Advertising Week, as brand and agency executives prophesied on how the metaverse, NFTs and cryptocurrencies would impact the ad world in the years to come. Here's a look at some of the biggest takeaways of the week. 

Shingy loves Meta

Futurist David “Shingy” Shing kicked things off Monday morning with a discussion on the metaverse—the first installment for a pre-recorded series spanning the conference called “Shingy Speaks.” 

To no one’s surprise, Shingy is excited by the metaverse, and he considers Meta, formerly Facebook, to be an early success story, even if others are skeptical of the prospects. “The setup from Meta [is] awesome,” he said in the video, “because what they’re doing is giving you the opportunity to say, ‘You can now fast-experiment and understand where this can go.’”

Of course, Meta’s metaverse project has been in the spotlight recently for all the wrong reasons, from reported bugginess with its VR software to unimpressive user growth. Even Shingy got tripped up by the company’s self-reported numbers when he falsely equated the large monthly usership of Spark AR to those experimenting with Meta’s Quest VR headsets. In reality, more than half of Quest headsets aren’t being used six months after they are purchased, according to The Wall Street Journal.

AI expert is most impressed with AR

Stephen Upstone, CEO and co-founder of AI-enabled digital ad platform LoopMe, gave a grounded take on the metaverse in a session on the future of tech. He explained how augmented reality (AR), a technology that has been around for years and whose association with the metaverse is very light, has so far made the best case as a valuable marketing tool.

“The part of metaverse that I think is kind of ready now for prime time is more around augmented reality,” he said. “In terms of the full kind of in-depth metaverse, I think we’re still early for that.”

Upstone’s hesitation to embrace more metaverse-heavy technology, such as Web3 or NFTs, suggests the AI sector is still wary of the buzzy space.

Web3 is not a replacement for Web2

During a session on women in the metaverse, panelist Janet Balis, partner and marketing practice leader at EY, reminded the audience of an important reality to keep in mind when building the next iteration of the internet: It will not replace the current iteration.

“One of the things about Web3 is that we have to appreciate [that] Web2 is not going away,” she said.

The decentralized vision of Web3 is largely considered a response to Web2, where tech giants own all the data and assets, while users play the role of helpless subjects. But there are also benefits of a Web2 framework, such as convenience and ease of use, not to mention the entire internet and all of its applications are a part of this framework. Completely replacing it with a utopian version of the web—which has yet to gain steam amongst the masses—is out of the question.

Instead, developers, marketers and anyone else ushering in Web3 technology must look for ways to construct the new framework alongside the existing one.

“Some of the nuance actually lies in how we blend and dovetail Web2 and Web3 together,” Balis added. This has already started to happen as companies like Google and Microsoft embrace cryptocurrencies and metaverse tech. But builder beware: Web3 must retain its decentralized infrastructure in order to prevent walled gardens from turning it into a shinier Web2.

How brands should treat NFT holders

Julian Holguin, CEO of NFT collection Doodles, must reconcile two distinct audiences for his burgeoning brand: the group of holders who own the collection’s core 10,000 NFTs, and everyone else.

Yes, the brand wants to become the next Mario (as in the Nintendo character), and therefore must create loads of new vehicles for its IP —from toys to merch to more NFTs—but it must also refrain from diluting the value of its original collection. If it doesn’t focus on increasing the value of its core NFTs, those holders will sell and the brand’s foundation will collapse.

“Think of [the holders] as our black card members,” Holguin said.

More: Doodles' Holguin discusses Web3 with Ad Age (from July)

Doodles’ dilemma illustrates an important notion for traditional brands to remember as they set out to build audiences in Web3. Many will—or already have—launched NFT collections, and they’ll certainly attempt to reach consumers beyond this core group of 10,000 or so fans. But they cannot neglect the obligation they owe to these holders, whether that be utility, like special experiences, or merely a solid price floor. This group is the black card membership of the brand, and their satisfaction is vital to success in the Web3 space. 

“That value exchange between early-adopter fandom and the scale of the brand—[holders] are actually going to be able to see and feel that success with us because they were with us from the very beginning,” said Holguin.

Data collection will not be the same in the metaverse

When asked how brands should try to measure integrations in the metaverse, Adam Rodgers, president of martech company Leavened, had an interesting answer.

“It’s really not that different from how we think about measurement for non-metaverse platforms,” he said during one of the week's panels. “The number-one most important thing ... is data.”

While, in a practical sense, Rodgers is right—you can’t measure impact without data—his response mostly whiffs on a core understanding of the metaverse: data belongs to the user. Of course, this is not true for Web2 gaming platforms dressed in metaverse clothing, such as Roblox and Fortnite, which are centralized ecosystems that own every action, asset and data point in their worlds. 

But for any metaverse platform that associates itself with Web3 and its development, data cannot belong to anyone else but the user. It is this new paradigm that separates Web3 from Web2; without it, users have no power, and the internet retains its current exploitative model.

This is partially why Web3 spaces like the metaverse pose a novel set of questions for marketers. How can brands learn anything about users when they have no easy access to their data? Why would users surrender their data if they don’t have to?

Now you’re starting to get it. Marketers need to understand that in Web3, their value prop has to be compelling. The model of easy access to consumer data does not exist here. Instead, brands will have to convince consumers—through perks, unique experiences and community—why they’re worth the data exchange, which, by the way, can only be of the first-party variety.

Later in his response, Rodgers went on to say: “You have to make sure that as you build that relationship and you do that integration, the data comes right back to you.”

Again, his point is not wrong. What is wrong is his assumption that marketers will have the same ease of access to data in the metaverse that they’ve always had.

Bonus: Advertising Week knows marketers still don’t understand Web3

The organizers of Advertising Week included in this year’s programming a series called “AWExplains,” in which an expert sits down and unpacks the basics of a single topic for about 10 minutes. Of the six pre-recorded segments, three were about Web3—an understandable yet obvious indication that marketers still do not get the space.

The three segments were all well done, with articulate speakers and no-nonsense explanations. It also helps that the topics—cryptocurrency, NFTs and the metaverse—each received their own video, as opposed to having been combined into one and thus skipping over important facts, such as the technologies’ relevance to marketers.

It has now been a year since Meta rebranded from Facebook, kicking off the metaverse as viable territory for many brands. NFTs have been in the limelight for even longer, and crypto reached a relative peak in terms of mainstream attention when it took over the Super Bowl in February. This is all to say that marketers really should be getting the whole Web3 thing by now, or else they risk getting passed by as new concepts and technologies emerge within the space. 

But there’s hope that Advertising Week won’t have to feature Web3 in this type of series next year (why a primer on gaming—gaming—was included as one of the segments is completely beyond us). The event featured a “Web3 Pass,” which was described as a digital version of the standard Advertising Week Pass, but with opportunities to receive rewards and other utilities. Guests could earn NFTs by attending a specific number of sessions or by networking, as well as access to the VIP lounge and Amazon gift cards.

This author claimed a pass but sadly never received one. Still, the experience—assuming it worked for others—was an admirable effort to educate marketers on Web3, and without the training wheels.