What CMOs Need To Know Now About Web 3, Metaverse, Crypto, Digital Wallets And NFTs

The digital world is in a profound state of evolution that is both overhyped and underappreciated. Many of the enabling technologies are not well-understood by marketing leaders which is leading to mixed responses to these emerging capabilities. Is it time to jump in and redeploy marketing resources? Or should I wait while others learn lessons the hard way? Let’s explore the fundamentals of these five technologies and assess their readiness for primetime.

Web 3.0 – The third evolution of the world wide web is in progress. Advocates promise a more democratized approach to this next generation of the web, but its evolution is more organic and less standards based. This leaves many people asking the question, “What is Web 3.0”? There isn’t a definitive answer, but one will evolve over time based on underlying technologies that enhance Web 2. Blockchain capabilities will improve security and authentication of digital assets promising individual ownership of one’s identity, information and assets leading the way to cryptocurrency, decentralized finance (DeFi) and non-fungible tokens (NFTs). Improvements in 3D graphics and bandwidth speeds will yield more immersive virtual environments. Combined with advances in artificial intelligence (AI) and virtual/augmented/mixed reality capabilities, the foundation for the metaverse will be laid. Web 3 will also connect more digital devices than just PCs and smart phones, including vehicles, home appliances, climate control systems, personal fitness devices, building access systems and just about anything with a digital sensor. Finally, emerging semantic web technologies will provide meaning to web pages via machine-interpretable metadata, changing the efficacy of information searches on the Web.

Metaverse – The metaverse generally refers to persistent virtual worlds, often accessed with virtual reality headsets or augmented reality glasses. Today, a person usually enters a virtual world as an avatar and can interact with other avatars or other digital items. Some examples of virtual worlds are found in gaming platforms such as

Roblox and Fortnight where participants can share experiences with friends. But distinct virtual worlds are not the metaverse. Proponents of the metaverse promise new possibilities beyond gaming, including virtual spaces for brands to set up shop and interact 24/7 with AI-enabled bots that will be able to converse in multiple languages. And accessibility via smartphones and other devices for mixed reality experiences. Early marketing experiments in virtual worlds include offering branded attire for avatars (Gucci, Prada and Adidas), virtual restaurants (Wendy’s and Chipotle) and virtual places (Playboy Mansion and Tony Hawk Skate Park). A few brands are even creating unique entertainment-themed venues in place like The SandboxSAND2
to interact with digital-savvy consumers.

However, skeptics believe the metaverse is still too early for many marketers. Julie Ask, vice president and principal analyst at Forrester, puts it this way, “If generating press is your success metric, these brands have done a good job. But if we just do old things in new ways in the metaverse, it’s going to be dull and uninteresting. And I don’t think we know what those things are yet.”

Cryptocurrency – Blockchain technologies have enabled the development of cryptocurrency which can be used to buy digital assets or to pay vendors who accept crypto. Cryptocurrencies are tied to the level-one blockchains upon which they were “mined”. BitcoinBTC
, EtherETH
eum and SolanaSOL
are leading blockchains, each having their respective currencies. The value of the currencies fluctuates based on market conditions and can be bought or sold through exchanges like Crypto.com, Coinbase and Kracken. The dramatic rise and fall in currency value, exacerbated by less reputable players’ behavior in an unregulated industry, have created hesitancy for many companies to get involved. But with federal regulations likely to emerge, cross-chain operability issues likely to be resolved to be developed, and the simplicity of transacting commerce with crypto, brands should begin exploring their readiness for accepting payments via crypto.

NFTs – The most popular form of NFTs today is digital art. But to think of NFTs as simply digital art would be like thinking that AmazonAMZN
is an online bookstore. Yes, digital artists are making unique pieces to sell and brands are creating memorabilia and digital items in the form of NFTs. But Julie Mossler, CMO of Metaplex, the leading platform for creating NFTs on the Solana blockchain, describes NFTs this way. “Really at the heart of it, an NFT is just a contract. It is an agreement that you make between the buyer and the seller or between a bunch of bits and bytes behind the scenes. Today that illustrates as art, but very soon we’re going to see music and gaming.” As programmable, smart NFTs evolve, additional applications will also include identity management, digital tickets, and loyalty and rewards cards.

Digital Wallets – The term is somewhat misleading in that digital wallets store more than crypto currency. They also store digital assets like NFTs and digital identities of the owners. The latter application is particularly important for marketers to be considering. According to Brian Wallace, CMO of Vatom, a platform for building brand experiences in the metaverse, brands should be focused on their digital wallet strategy. He believes brands should not be creating proprietary wallets because consumers don’t want to have a wallet for every brand. Instead, they should focus on the evolving capabilities of smart NFTs to serve as loyalty and rewards cards. The NFT will link to the customer’s identity, providing secure login into digital or physical experiences. Activities can be securely tracked with permissions in the hands of the customer instead of third parties such as Facebook or Google. Retailers, health clubs, restaurants and entertainment venues should be exploring the implications of digital wallets and smart NFTs as the next generation loyalty cards.

Conclusion – Web 3.0 will be evolving over the next several years and will bring new possibilities that CMOs should be considering today. How will consumers and business buyers want to interact with your brand in the metaverse? What new value can you create for them in the metaverse beyond their current experiences? How will those expectations reshape your current website? When will your company take cryptocurrency as a form of payment? What does an NFT-based identity and loyal card system mean to your current program? Are there other forms of digital assets that will strengthen the relevance of your brand? The next 18 months will be a time of experimentation. Are you ready to begin your exploration?