Transformations taking place in the Web3 world, such as fragmenting consumer behaviors and tightening privacy policies, are taking us farther and farther away from familiar marketing environments, explains Frameplay’s Cary Tilds.
The concept of Web3 conjures images of open, decentralized, and democratized systems of greater utility where everyone can be a builder or an owner.
Maybe that truth alone makes it clear that the marketing industry is not at all prepared for it, since Web3 is about a new consumer value exchange; in the Web 3 context, basic media concepts such as reach, frequency, and relevance will be calculated completely differently – the industry will not be able to calculate target audiences reached at scale or have any chance of unduplicated reach for a quite some time, if at all. Relevance metrics will rely on a new understanding of how to authentically show up in new metaverse-type environments, and shouldn’t be compared to the advertising of today, as they are simply not the same.
Frankly, a marketing industry that is still trying to figure out how to get unduplicated reach in a Web2 world, that itself is quickly becoming even more decentralized and fragmented. So, the starting point for brands as consumers embrace Web3 is to come to terms with the realization that concepts of value to consumers, such as privacy, will only be more salient going forward.
To come to terms first requires going back to digital marketing’s beginnings. Concepts like “reaching target audiences at scale” and “unduplicated reach” are coveted principles to any media planner, just as the relevance of creative messaging is also high in value to marketers.
Marketers leaned into these principles more than a decade ago, and as digital adoption grew, so did marketing’s love affair with leveraging the technology to reach consumers in new, more “meaningful” ways. The opportunities in the digital space allowed an entire new generation of marketers to think of new form factors of digital content to dazzle the consumer into engaging with the brands that resonated with them the most. Media practitioners went all in on efficiency, dialing up every possible ad tech lever to optimize campaign performance. The premise that reach, frequency, and relevance were being achieved seemed real and obtainable. Wasn’t “big data” supposed to be the industry’s savior?
In order for marketers to understand how to move forward in the new Web3 world, they need to start with what the consumer already expects for their privacy and choice (and these have been changing for quite some time).
The truth is that over the last few years, privacy changes in the GDPR and CCPA have been the canary in the coalmine for the democratization and decentralization of consumer data.
Consumers demanded to have their privacy protected in an increasingly digital-first world. Ironically, centralized governments listened and helped this decentralized movement by installing new regulations to support the consumer demand for privacy.
And also ironically, big, centralized companies also listened (at the pressure of centralized government) to reduce the targeting and tracking capabilities of their own systems at the risk of reduced revenue. Google and Apple, of course, are two examples. Starting last year, Apple’s IDFA (identity for advertisers) became opt-in, and though there is no definitive data on current opt-in rates, they are thought to be incredibly low. Google is overhauling Chrome by removing third-party cookies that follow people around the web. Both companies fundamentally disrupted business across all sectors with these changes.
The second major shift that has disrupted the ability to reach people at scale is the fragmentation of consumer entertainment and content consumption. Consumers are shifting from programmed linear TV systems to engaging with content wherever and whenever they want. According to Data.ai’s State of Mobile in 2022, social and communications apps drove the growth in total time spent, followed by photo and video. Gaming was about 10% per market in total time spent, and was biggest in terms of consumer spending, as games accounted for 68% of consumer outlays in mobile apps.
These elements were already in motion before COVID-19. They simply accelerated during our global lockdown when everyone was forced to use digital devices to connect and keep entertained.
Now, the stage is set for further disruption to old media models within Web3 as elements such as NFTs, the blockchain, and the metaverse take hold.
The growth of NFTs soared in 2021, with some believing they are the future of ownership in the online world. NFTs will be a digital content asset and they will require a shift change for marketers on how to calculate their value in reaching campaign goals. There is a lot of hype and certainly experimentation, supported by brands and Hollywood alike, where just recently at the Cannes Lions International Festival of Creativity, Paris Hilton (11:11 Media) and Gary Vaynerchuk (VaynerMedia) discussed that NFTs and Web3 will help put power in the hands of the creators. The hype and experimentation are only just that, with no standards and systems within the industry yet, to measure the true value.
Blockchain, the foundational technology that underpins cryptocurrency and NFT ownership and also supports the underpinning of many Web3 experiences, is also something that will end up being part of the marketing industry, as a shared, trusted ledger (database) filled with entries that must be confirmed by peer-to-peer networks and encrypted. Although several companies, like Aquiliz, are trying to apply blockchain to the marketing industry, each is still early in their development.
Metaverse-like experiences have been around for a while, particularly in gaming, with some of these experiences in the form of pure role-playing virtual worlds online like Everquest, World of Warcraft, and Second Life. Up until very recently, these games behaved like walled gardens even when marketers worked with them. But companies like Frameplay (full disclosure: I am its chief strategy and operations officer) are changing this for marketers, providing consistent measurement across an ecosystem of games. The way we do this is by video game developers initializing Frameplay’s SDK with their game engine. When they place an ad unit into the design of the game, Frameplay’s technology constantly calculates the orientation with the ad served relative to the player’s perspective while they are moving around the game. Metaverse experiences are created with game engines, thus the technology is primed for those experiences too.
Concepts like metaverse experiences, blockchain, cryptocurrency, and NFTs are all part of the new idea of a Web3 world. To engage Web3 consumers, the marketing industry will need to create new approaches and systems, not only being mindful of consumers’ expectations of a value exchange, based on decentralized and democratized trust, but also on their embrace of a virtual world where content is on-demand, transferable, and even ownable.