Web3 Is Real, But Learn from the Mistakes of Web 1.0 -- Media Metaverse with Minsky

This was the era that was widely referred to (with the often and, in a way, overused cliché) as "the Wild West." Nobody knew what they were doing. Investments were made on visions. Pricing was literally arbitrary and forget about data, accountability or ROI. It was an era when sellers were bilking millions of dollars from corporate America CEOs and CMOs with the dream of digital gold, but with the short-term reality more like wooden nickels. The sell was simple, and, for a short period, it was accurate. Announce a digital deal with AOL or one of the top digital players and your stock price would go through the roof, more than covering the cost of the actual deal.

In general, the deal commitment had to be in the $10mm-$20mm range to move the needle. Typically, these deals were cut on beautiful spring days, on only the best of golf courses. After a few beers and a nice meal a handshake agreement was set, and the deal done. Well, almost … because therein after, I, and some of my industry peers, were generally called in to make sense of the deal and find the value. We were "the fixers." And our task was impossible. The value simply wasn’t there. Not by a long shot. At most, the $15 million deals were worth maybe $1 million. Tops. The result: Hundreds of millions of dollars in marketing spend evaporated without much impact and, in the year 2000, those stock prices came back down to Earth with a giant sucking sound as the bubble popped.

We are, again, at an inflection point of digital media and marketing. With the roll-out of 5G, edge computing, and the growing adoption of gig-per-second broadband connections; along with the digital transformations brought about by the pandemic, the next evolution -- call it "Metaverse" or "Web3" -- has begun. This evolution, driven by AR, VR, AI, NFTs and the Blockchain promises wonders and transformations on economic, health, personal and societal levels only imagined by the best sci-fi authors and filmmakers.

I am fully aware how hype-filled that last sentence sounds, and I am equally aware that if we don’t screw it up, how actually understated that sentence will prove to be. The timing of these benefits will depend on the degree to which marketers chase shiny new objects versus identifying and investing in the building block foundational elements of being a Metaverse-ready company and developing a clear value-based strategy that sees the endgame clearly and works towards that goal.

So, how do we avoid the mistakes of the past? How do we get past FOMO and build a strong foundational strategy to evolve and transition to the next level in 2022 and beyond?

Here are some suggestions:

Step 1: Accept That This is Happening

The cloud is built. The connectivity has started to roll-out. Consumers are buying new devices and upgrading to 5G. This is real. This is not an incremental, but an exponentialshift. In the early Web days, there was a tremendous amount of skepticism and denial that there would be a digital evolution. "Who would want to spend so much time in front of a screen?" they said. Yeah. Exactly. Each evolution of the web has been predicated on a leap in bandwidth, and we are currently in the middle of the biggest leap yet as we move into a 5G/Gig per Second/Edge Computing world.

The limitations that you, as a marketer, have been restricted by bandwidth and processing constraints are becoming a thing of the past. And with hyper-broadband, we'll be leaving the flat 2D nature of the web into immersive 3D. This year at CES, LG set up a virtual 3D immersive experience to be able to view and explore their televisions (on a desktop/mobile) in 360. P&G created the LifeLab immersive experience, an extensive avatar-centric desktop/mobile experience for CES that allowed visitors to communicate, in real time, avatar to avatar, with P&G brand representatives, as well as experience different worlds highlighting various P&G brands.

Step 2: Develop a Metaverse Strategy with a Long-Term Vision

If some current tactic makes sense within your overall strategy, media or otherwise, then great. Go for it. Test, learn, deploy. Make sure you put KPIs to measure its effectiveness and contribution to ROI. But if you're doing it to check off a "Hey, we're cool!" box, please think long and hard on whether it really is the best allotment of time and dollars. However, now it is extremely important to be investing both time and money to develop your Web3/Metaverse strategy. That was a critical error in the first go-round that, to some extent, we are still paying for today. Many companies built around the technology that was available "in the moment" and did not think about what the future would hold. Giving just a bit of thought around what might be and how you can architect a flexible strategy that will allow you to adapt those new features easily and within a bigger framework, without having to tear down and start over, will help you avoid what VR pioneer Jaron Lanier calls "lock-in."

Step 3: Democratize the Process

The biggest mistake, IMHO, during Web1 was the fact that partnerships and investments were made (generally) by a single team, or even a single individual; whether it was a marketing team or an e-Com team. As everyone has since learned, every aspect of your business, from R&D, product development, HR, CRM, communications, advertising, sales, etc., is impacted by these moments in time. Establishing a working group with everyone allowed to have input and participate is essential and will minimize digital transformation blind spots which can later turn into all out internal friction.

Although it can also be said, to an extent, about the web at large, VR and XR, both critical components of the Metaverse, bend geography in much deeper ways than Zoom, Google Meet or Microsoft Teams. The "sense of presence" is palatable, and it absolutely changes the person-to-person dynamic in addition to allowing retailers to reach customers far beyond their real-world boundaries. Walk into Horizon Venues or Worlds, the Meta social platform, and you’ll be standing next to, chatting with, and high-fiving people from across the globe. As you develop your Metaverse strategy, in particular as a global entity, ensure that the regional/global representatives within your organization have a voice in the decisions.

Step 4: Drown Out the Hype

Collectively, when the media starts to talk about something new, it's a good signal that something is a brew in the ecosystem. However, on a micro-level, an individual story can elevate a company or tactic far beyond its real value. The hype machine is currently full throttle talking about millions of dollars paid for an NFT, a brand purchasing a piece of virtual land on The Sandbox or Decentraland or whatever the new hot flash-in-the-pan Metaverse is today. In the past month the gaming acquisitions of Zynga by Take-Two Interactive and Activision-Blizzard by Microsoft have dominated the business pages. And, of course, the real shift to Meta from Facebook and the subsequent refocusing of the company has signaled real investment in making all this a reality. But, for all the Microsofts, Take-Twos and Metas there are a huge number of high-risk or vaporware companies pitching themselves as Metaverse. In every media era or era of social transformation there are charlatans ready to take advantage of ignorance. Buyer beware.

Step 5: Start with the Fundamentals

Each company, of course, must work on both a future-focused endgame while maintaining their business of today. One of the biggest and most notable differences in Web3/Metaverse versus our current web experiences is the move to immersive and three-dimensional experiences. I am not solely talking about VR/AR/XR or anything that would require a headset or eyewear; although I do believe that is inevitable.

The first step to becoming a Metaverse-ready company is to understand in which areas you are already behind. The most obvious one is how we display products. This is 2022, not 1998. And yet, for some reason having nothing to do with connectivity or bandwidth, e-retailers and product manufacturers are still displaying their goods and services on their websites or other digital distribution channels, in flat, boring, 1994ish 2-D photos. Is that how we shop in the real world? Do we not pick up goods, read the labels, examine clothing and luxury items from every angle? 3D digital twins, which are hyper-realistic renders of products, not cartoonish or animated, are available today giving consumers the ability to inspect products as they would in the real world.

The Khronos Group is a 3D image standards organization which counts major tech companies Microsoft, Google, Apple, Intel, Qualcomm, Samsung, Nvidia, Facebook and Shopify, and retailers such as Target, Wayfair, Ikea, Adidas, Ashley Furniture and more as members. In 2021, they finalized and released the 3D Commerce certification which lays out a set of standards to create 3D image files that will look consistent across browsers and devices. Invrsion*, a 3D digitization and VR-ready retail simulation company based in Milan has been digitizing high quality photo-realistic 3D digital twins and enabling shelf yield-optimization for retail over the past seven years for CPG manufacturers such as Nestle, Ferrero, Mondelez, and PepsiCo. They also work with fashion and real estate organizations.

Start your journey by catching up and incorporating elements of the Metaverse that we know will are fundamental to the experience and put your products in the best light. 3D digital twins and retail simulations that are AR/VR capable but also scalable on desktop and mobile is a good place to begin.

Step 6: You Cannot Make the Intelligent Decisions if You are Not Experiencing It

So many of those early mistakes were due to gross inexperience of marketers with the media outlets in which they were investing. If you had been an active web user, you would have recognized that many online services were using a technique called a "server push" to rotate ads within chat and e-mail, dramatically decreasing their branding impact and artificially inflating their inventory. And where was the bulk of the inventory on a plan in those early days? In e-mail and chat. And yet, because marketers didn't spend time on the system, they had no clue that this was happening and made critical errors in their investments.

For those involved in developing a Metaverse strategy, an investment in equipment and experience should be a top priority. Buy the team members a VR headset ($299 for a Quest 2, which even with 20 team members seems like a good way to save hundreds of thousands in misallocated funds). In fact, get a range of headsets, especially the higher end ones like Varjo (not for each team member) to get a feel for what the future will bring. Insist that anyone looking at crypto-based immersive worlds (CIWs) spend time in those worlds. They don't necessarily have to buy anything but should look to see if what takes place in those worlds will enhance or detract from their brand and whether there is scale opportunity.

Don't just look at it through a marketing lens, but a holistic business view. Go into social areas at different times of the day or week. See who the users in the social areas are, and who they aren't. You may be surprised, especially in areas like Horizon Venues or Horizon Worlds where there always quite a number of young children. This might be a red flag for your brand.

Step 7: Take Intelligent Risks to Learn; Knowing It Isn’t About Scale

While over-investing without some rationale of current business impact can be a foolish move, doing nothing, if you have the resources, is also a mistake.

I am very on-the-fence on the whole desktop immersive worlds definition of Metaverse. Roblox, The Sandbox and Sensorium are just the latest flavors of MMPORGs (Massively Multi-Player Online Role-Playing Games). You might get press for launching a luxury product in Roblox, but chances are the 10-12-year-olds that make up a good portion of the participants are unlikely to afford it.

That doesn't mean that they don’t provide interesting areas for brands to experiment, if it's in line with your audience targets and your brand strategy and the financial outlay is reasonable. For example, the trends to hold concerts in the Metaverse makes sense; especially as there are still major challenges for artists to gather large audiences in person in the real world due to the pandemic. It is a global medium, so the opportunities to reach millions of people are there. It keeps artists, especially new artists, front and center. Warner Music Group's recent announcement to launch WMG Land on The Sandbox and create immersive music-based experiences  is both in line with the need for Metaverse companies to draw attendance through cultural touchpoints and gives Warner Music Group a way to globally highlight new and existing artists in time period where live real-world concerts are still subject to the whims and risks of the pandemic. Additionally, as NFTs could provide an interesting new revenue stream for the music industry, it’s an appropriate place to test and learn.

Don't make these decisions solely off spreadsheets, but a combination of quantitative and qualitative experience.

Step 8: Get Started Now!

Fortune 500 companies are gathering intelligence, forming committees and developing their Metaverse strategies. This is a good thing. Web3 and the Metaverse are happening. There is no doubt about that. The players to fund and ensure that the technologies develop and scale are in place, and they are not just VC gamblers but the top revenue generating media and technology companies that have the deep pockets to see this through. Top marketers who have long-term and deep relationships with Meta through Facebook will naturally gravitate towards them for guidance and opportunities. There is nothing wrong with that. But Meta is not the Metaverse. Their recent stock drop will not stop the momentum of the Metaverse. There will be several ecosystems, hopefully interoperable, but likely not. And beware the high price tags that the bigger players will ask. There is no "must buy," especially in these early days.

Finally, if you do have a Quest 2, please feel free to friend me with my username: mediawhiz. I am in desperate need of some new opponents in Beat Saber to thrash!

Full Disclosure: The author has a consultative relationship with Invrsion in the U.S.

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The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.