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How will the metaverse advance in this unsure economy

Over a year ago, I remember writing about Facebook’s name change to Meta. The whole concept confused me. I wrote about the history of the term ‘meta’ and its association with ‘metaverse’ and the fact that the term ‘Web3’ had been coined over a decade ago. The article overwhelmed me with new information and a need for in depth research. 

Now, over a year on, most of us – researchers and copywriters or not – have become far more fluent with these otherwise futuristic terms. 

As we move into 2023, companies are testing various aspects of Web3 tech and more brands such as Tiffany & Co, Starbucks and Nike have moved beyond merely collectible NFTs in favour of token-gated commerce, loyalty programs and other ways to interact more directly with consumers via first-party data. These types of projects still make up just a small part of marketing compared to Web2 social channels such as Facebook, Instagram and Twitter. However, research firm Gartner expects that by 2027 more than 40% of large organisations around the world will be using Web3, spatial computing and other metaverse-based projects as ways to increase revenue.

It’s no question that the current economic climate is also putting marketers in a challenging catch-22 situation. On one hand, budget pressures and negative crypto news make marketers more cautious about trying potentially risky Web3 initiatives. Nevertheless, a huge piece of news majorly covered this week cycles around 2023 data privacy changes and less reliance on third-party data give marketers new reasons to try alternative marketing channel – bring on the metaverse! 

Having said this, many of the promises of Web3 are still in their infancy — and in most cases still unproven. There’s also the chance that 2023 might be a year of what Forrester describes as “metaverse washing” by trying to make old media fancy with new terms. However, analysts say brands would be smart to try new things rather than repackage the old.

In response, Rob Davis, chief digital innovation officer for MSL U.S has spoken on the need for more ‘dynamic NFTs’ this year. A huge obstacle in getting to this point is the community and niche industry’s failure to decipher what exactly Web3 is. Right now we have access Web2.25 at a maximum, if that. “If we are going to discuss who is bullish about Web3 and who is not, we have to agree on what Web3 is,” Davis said. “If we are talking about using blockchain as a platform upon which experiences are built, I’d say quite a few brands are bullish. If we are talking about decentralisation and demolishing the status quo, then my answer would be quite the opposite.”

To that point, crypto-enabled Web3 platforms still have a tiny user base compared to Web2 virtual worlds like Roblox, which had 13.5 million app downloads in November 2022, according to data from Sensortower. For example, The Sandbox — which has worked with more than 200 brands including Adidas and Gucci — had just 2,000 app instals worldwide in November. And Decentraland, which has worked with brands such as Heineke and Samsung, had just 1,000 instals worldwide in November for its Decentraland Explorer app and only 10,000 downloads to date.

There’s also still the big question of whether people even want whatever the metaverse has to offer: a recent Forrester report pointed out that less than half of online consumers plan to ever become metaverse users. And after non-fungible tokens were all the rage in 2021 and 2022, NFT trading volume dropped 97% from its January peak through September.

At Wishu, however, we are passionate about the need for thriving creativity in the metaverse and for now it seems very commercial heavy. Kevin Renwick, media director at Mekanism agrees saying that “ it’s better to be smart about creating experiences rather than clutter […] Otherwise it’s just going to be like Times Square in the metaverse. A lot of noise but into the abyss.”

I think in 2023 it is safe to say that experimentation within the metaverse is key to its growth. Beauty brand Eos (you remember those tennis ball shapes lip balms?) are a great example. Last month, the brand (tailored to Gen Z and millennial consumers) made its own debut on Roblox with a Christmas-themed starring Mariah Carey that included a multi-day event with a digital playhouse, free in-game items and ways to interact with Carey’s avatar on a virtual stage. Eos CMO Soyoung Kang wanted to reach users where they already were. “We start looking for new opportunities where there are emerging platforms where you’re getting an outsized investment,” Kang said.

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