The Year of Human Web3

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Michael Chadwick, Head of Strategy & Experience Cheil UK, chats to Brandberries about the future of Web3

We’ve all heard a lot about Web3 this year. In some places (not least the board of the company formerly known as Facebook), the word ‘meta’ may be a dirty word. We’ve seen the crypto-crash, shirts lost on value-less NFTs and Meta’s uncanny valley avatars throwing the whole potential of immersive into deep question. For many, the wonders of Web3 may be starting to feel more like a case of the emperor’s new digital skin – a disappointing meh-taverse rather than a brave new world for brands.

But....Amidst the noise, it is now possible to discern clear signals that Web3 will have a fundamental impact on the way we build brands over the coming years. Ultimately, this is not about a new set of platform brands – the next TikTok, or Instagram. We are talking here about a fundamental rewiring of the digital space. And as always with paradigm changes in behaviours – this will not be driven by the technology, but by the human needs the technology can service.  

There are 2 foundational questions that make clear how Web3 and immersive internet can bring about transformational changes in the way we do consumer engagement:

    Why do our digital experiences still predominantly resemble pre-digital formats? Why are websites, apps etc still largely based on 2D artefacts like magazines and catalogues? 
    Why are all the conversations about what brands can do with my data… rather than what I can do with it? 

In both cases, there is a clear human need at work driving change which will make it ultimately and eventually inevitable.

The forces driving the uptake of Web3 will be deeply human – not technological."

The immersive native generation

Just as over previous decades we have talked about the digital native generation, and then the mobile native generation, we are now looking at the immersive native generation. Demographically, this may be Gen Alpha – but behaviourally, it’s that first cohort that grew up with the ‘pinch to zoom’ action from digital screens so hardwired in their brains that they attempted it on physical books and artefacts from a very young age. This is a group for whom flat, non-immersive experiences simply don’t make sense; they want to go beyond.

This cohort is already enacting that behavior: a majority of Gen Z and Gen Alpha already spend time socializing with friends in virtual and immersive spaces. As Joe Ferencz, CEO of Gamefam – a leading Roblox game development company – says “this is where Gen Z and Alpha socialize with friends, just like prior generations would hang out at the mall”. 

Technology will simply accelerate and enhance this. The arrival of genuinely consumer-ready VR and AR tech is happening – the era of mixed-reality wearables is visible on the horizon. Unreal Engine 5 is delivering a step-change in the quality of digital immersive experiences. Applications of AR and data to all kinds of interest areas by pioneering start-ups (like Trickshot, a start-up using data from live sports to create immersive experiences for fans) will start to bear consumer fruit over the coming months and years. Just as the era of truly mobile internet created an entire new economy of possibilities – exemplified by the notion of the ‘app’ – so the immersive era will also generate a new era of businesses. 

How Web3 can change the conversation on data

If immersive speaks to the experience people will get from the next generation of internet, then decentralized Web3 systems are the difference in terms of the underlying ‘plumbing’ of this future world. In particular – and in the very near-term – token-based loyalty programmes have the power to totally change the conversation on data.

This is a sea-change that is happening now: this December, Starbucks launched the beta version of Odyssey, their blockchain-based loyalty programme – and other major brands have indicated they will soon be active in the same space. 

The implications of NFT-driven customer engagement on data are deep, and driven by the fundamental conflicts within the world of consumer data privacy and platform data ownership that we have seen in recent years. A token-based system could see the power dynamic shift back toward consumers, asking questions such as: 

  • Why shouldn’t you own – and profit from – your own data?
  • Why should your data sit in inflexible siloes, its movement controlled by organizations and not by you? 
  • Why can’t you take your data where you want to?

  • Ultimately, these changes will move the conversation on from ‘how much should brands be allowed to benefit from my data?’ to ‘how can I benefit more from my data? – alongside a shift in data-ownership, from brand and platform-owned, to decentralized and individually-managed.

    dIn the most tangible terms, this looks like a future in which a gold status loyalty card you have earned actually belongs to you – a tangible asset you can sell or profit from on the open market. An asset whose value goes beyond one organization but provides you with access, status and value across the whole Web3 ecosystem.

    But it goes further. In this world, there is the potential for consumers to become genuine stakeholders in the organizatons they do business with. This is currently most evident in the entertainment space: the ‘Sky’s The Limit’ NFT collection from Notorious B.I.G sold out in just 10 minutes – but it didn’t just give owners a piece of digital art – it made them part of a collective that owns the rights to one of his tracks, free to make decisions about its future usage, and how royalties from that track are utilized. 

    As brands begin to play in this space, what consumers will expect or indeed tolerate in terms of data benefit and privacy will undeniably change. In simple terms – once a few brands launch token-based loyalty programmes at scale, the genie will be out of the bottle. 

    What this means for brand building and consumer engagement in 2023

    Over the last few years, the industry has begun to come to terms with the fact that brand building has moved from a simpler and more defined broadcast channel ecosystem, to an ecosystem that is constantly in flux: much like the universe, customer engagement channels are now constantly expanding and growing. Those waiting for this new ecosystem to settle down and become ‘fixed’ as the next generation will be disappointed; invention and innovation are the ongoing constant. This has had several very tangible implications for marketers and brand-builders. At its most fundamental, it has pushed us on from an era when a brand idea in the form of a tagline was enough to drive and manage all media channels and assets – towards an era when we have started to talk about things like brand behaviours. The amplification of channels has meant brands need to have a clear behavioural archetype at their heart, capable of driving everything from a piece of high-budget video content, to how a social community manager engages on an hourly basis, to physical experiences. 

    But the move to a Web3 world will take us even further down this path of turning brands into living, breathing things able to organically evolve across channels on a real-time basis. Immersive environments pose the biggest challenge to brand owners yet: how do you enact your brand in virtual spaces so that they can truly ‘live’ in these new worlds? 

    Whilst some may imagine that this will mean a diminution and gradual dilution in the importance of brands, it may in fact mean the exact opposite. Just as chatbots and similar AI-driven touchpoints have to some extent forced us to ‘pre-programme’ brand engagements, immersive experience will accelerate that. With virtual avatars etc, marketers will need to know their brand so well that they can literally programme them: how do you define your brand not as a set of brand guidelines, but as code and AI programming? This is not a world in which understanding brands becomes less important – it’s a world in which it’s critical to understand them with even greater clarity and depth.

    It is important, then, to grasp that Web3 will bring a paradigm shift across many areas of marketing: fundamentally, customer experiences will be redesigned. It will take a while for us to move beyond the temptation to replicate the existing through a Web3 lens, to begin designing anew for Web3 – creating the next generation.

    In many ways, from the deepest human level, this is why Web3 is such an important and exciting space as we move into 2023. As we face ever-deepening political, economic and social volatility across the globe, the emergence of a world in which everything is yet to be built, in which potentials are endless and in which everything is up for grabs is a bright spot of possibility in these recessionary times. For marketers, as ever, the challenge will be how to enter and innovate in this brave new world, whilst ensuring the core existing engines of growth keep turning against a difficult economic backdrop.

    Find the original article over on Brandberries