In October 2021, Mark Zuckerberg made a billion-dollar gamble. After months of speculation, he announced that Facebook – the second-largest seller of digital advertising in the world – was now a metaverse company. Suddenly, a word that had been mostly used by sci-fi enthusiasts and ardent technophiles was on everyone’s lips, and major brands the world over were rushing to get metaverse-ready.

The stakes could not be higher. If Zuckerberg is right, the newly-rechristened Meta will lead the way into a radically different future for the web. Instead of being something we surf on a laptop or scroll through on our smartphone screens, the web will become a place we inhabit. The metaverse will transform the web into an immersive virtual world full of possibility – a world in which millions of people from across the world can meet up to work, shop, and play.

It’s easy to understand the appeal of this immersive, interactive upgrade for the web. Over the past two decades, the web has gradually come to dominate much of our daily lives, and the COVID-19 pandemic accelerated this trend. But in practice, the way we use the web has not changed much since the smartphone revolution took hold in the late 2000s. If we’re going to spend such large parts of our daily lives online, couldn’t it be a little more exciting than just swiping at a six-inch screen?

And it’s not just users who might be feeling in need of a change. Ubiquitous connectivity and the rise of social media have made it easier than ever for brands to reach their audience. But despite the obvious benefits, there are clear downsides. Just how much of a connection can you really make through a few lines of text and a snippet of video? And with more than half of UK adults spending more than 11 hours per day looking at screens, it’s harder than ever to make your message stand out.

The metaverse offers transformative opportunities for brands to offer genuinely engaging and absorbing experiences that go far beyond what the digital marketing space can currently offer. And so it should come as no surprise that some of the world’s biggest companies are eager to take advantage.

Though the appeal of the metaverse might be obvious for users and brands alike, there are still some reasons to be cautious. As we’ll see below, the idea of an immersive virtual world has been around for decades, but it’s still not clear if we’ve reached the point where it can become a reality. Nor is it obvious that people are willing to accept extensive use of head-mounted displays. Virtual and augmented reality tech has also been available for decades but has struggled to gain widespread adoption. Remember Google Glass?

Ultimately, we’ve yet to see whether Zuckerberg’s gamble was a good one. At the time of writing, it’s not looking positive. Meta’s market capitalisation has dropped by 74% over the last twelve months, with Zuckerberg’s net worth falling by more than $100bn. Plenty of mainstream publications are ready to sound the death knell for Meta’s bold experiment, with Zuckerberg’s metaverse vision being described in recent weeks as a mess and a joke.

And it’s hard to blame them. Over the past few months, Meta has seemed intent on making the metaverse look like a bad joke, with comically poor graphics and a striking absence of legs making the whole thing seem like a billion-dollar disaster rather than a vision of the future.

While this doesn’t mean it’s time to write off the metaverse as a billion-dollar bet gone wrong, it does mean we need to look a little more closely at how the metaverse is actually developing. Before you go appointing your own Chief Metaverse Officer or start snapping up virtual real estate, it’s important to look past the hype and dig deeper into what the metaverse might mean for digital marketing. 

In this post, we’ll break down all the essential info and provide the insight you’ll need to make your marketing strategy metaverse-proof. We’ll help you see past the jargon to get a clear view of whether the metaverse truly is the future of the web – and what you can do to avoid being left behind.

The metaverse hits the mainstream

If you’re looking to make sense of the metaverse, you’re far from the only one. According to McKinsey, internet searches for the term “metaverse” grew by an astonishing 7200% in 2021. A significant amount of these searches were no doubt coming from a place of perplexity: what exactly is this metaverse thing that everyone is suddenly talking about?

And this wasn’t just a mistaken impression: everyone really was suddenly talking about the metaverse. Over the past eighteen months, one major company after another announced their intention to enter the metaverse, and many of them were willing to put their money where their mouths were.

In 2021, companies invested $57bn in metaverse technology and infrastructure. In the first five months of 2022, that had more than doubled to $120bn. The metaverse is even partly responsible for the biggest tech deal in history: Microsoft’s $69bn purchase of gaming giant Activision-Blizzard in January was described by CEO Satya Nadella as helping to “provide building blocks for the metaverse.”

 As important as it was, the Microsoft-Activision deal was just the tip of a very large iceberg. In the first six months of 2022, the term “metaverse” appeared more than 1100 times in filings to the US Securities and Exchange Commission, up from 260 last year – and from less than a dozen in the two decades before that.

If companies are willing to spend billions for a chance to corner the metaverse market, it’s clear that they see the potential payoff as bigger still. And there are eye-opening stats to justify this confidence. According to JPMorgan, the current market for virtual goods is $54bn per year – double the amount spent on music. Given that this is without us being anywhere close to the immersive digital realities that the metaverse will purportedly offer, then we can only try to imagine what the future might hold for the virtual goods market. 

In fact, many organisations have tried just that. Bloomberg suggested the metaverse could be an $800bn market opportunity, while McKinsey went with an astronomical $5tn. With these kinds of figures being thrown around, you can understand why everyone from tech giants to sportswear brands and cosmetics companies are making highly publicized metaverse plays.

But the value you assign to the metaverse market depends a great deal on what you actually consider the metaverse to be, whether in principle or in practice. And on this, there remain some major points of disagreement. Though lots of people are talking about the metaverse, that doesn’t mean everyone is talking about the same thing.

Defining the metaverse

At least some of the uncertainty over how we should define the metaverse is a side-effect of the sheer amount of reflections, analyses and opinion pieces it has generated, all of which contribute to a sense of complexity. Wherever you look, someone is itching to tell you what the metaverse really is and why you need to know about it – or why you shouldn’t bother. And of course, a few more clicks and you can find someone saying the exact opposite.

In reality, a top-line summary isn’t all that hard to provide. The metaverse is a persistent, immersive and highly interactive virtual world that supports a huge number of concurrent users.

If you’re just looking for a basic, functional sense of what people mean when they say “metaverse”, that would probably suffice. You can happily move on with your life, knowing that if someone asks you about the metaverse, you’re not going to be totally at sea.

Unfortunately, if you want to know how the metaverse is going to transform the web and impact the way companies reach their customers, we’ll need to go a bit further. After all, this definition leaves a lot of the important questions unanswered. Questions like: what kinds of interaction will the metaverse allow? How will immersion be achieved? Will there be one or many such virtual worlds? What will people actually do in the metaverse?

Illustration of two people wearing VR headsets looking out across a valley at sunset with stars visible in the sky above them.

This is where the difficulty really comes in. The metaverse is a big concept. It could hardly be otherwise – after all, it’s supposed to represent the next leap forward for the web. That means there are a lot of different aspects for people to argue over. Everything from how we’ll access it, to who will own it, to whether it will actually exist or not is up for debate.

The real problem, of course, is that “metaverse” is being used to describe something that doesn’t exist yet. So not only is the metaverse all-consuming, but it’s also ill-defined. In principle, it can be anything you want it to be – let your imagination run wild, and we can work on the tech later. And in fact, this has become a fairly common approach. Many of the most exciting visions for the metaverse lack any clear plans for how they could be implemented in the near future. Sure, a photorealistic VR rendering of a futuristic digital utopia where millions of people can live and interact sounds great. Do we have servers that can host it, or the bandwidth to let people access it, or the computing power to render it? Not even close.

This means that, for marketers, the real challenge is to separate fantasy from reality and make an educated guess as to how the metaverse will actually develop over the coming years. And the best place to look for clues is the gaming world.

From MMOs to the metaverse

While most discussions of the metaverse take on a speculative tone, imagining what it would be like to be able to hop into a virtual world and hang out with friends from all over the world, for many gamers this is just a familiar part of their daily lives. From the earliest days of the internet, massively multiplayer online games (MMOs) have allowed thousands of players to inhabit the same virtual space and interact with each other in surprisingly varied ways.

The most successful early MMOs adopted the mechanics of role-playing games, a genre that prioritised character development and player choice. By the mid-2000s, games like World of Warcraft and RuneScape were offering millions of players the chance to form guilds, take on quests, craft in-game items, and engage in a range of other open-ended tasks. 

An illustration of a wizard fighting a dragon.

The level of freedom that MMOs afforded to players led to what game critics have called emergent gameplay, where players were able to develop their own tasks and goals in a way that the game’s developers did not specifically intend. In the case of both World of Warcraft and RuneScape, this included a thriving in-game trading economy that developed its own real-world equivalent, with players buying and selling in-game items for actual currency.

Nevertheless, it would be a leap to claim this is anything close to what people are now calling the metaverse. Early MMOs remained, quite specifically, games. Though they allowed players to customise their characters and engage in open-ended social interactions, their underlying mechanics channelled players towards specific goals – fighting monsters, finding better items, levelling up, amassing gold, and so on. They also lacked something in the immersion department. The limitations of internet connection speeds and computing power meant they were graphically simple affairs, leaving a lot to the player’s imagination.

However, even two decades ago there were game developers who were willing to look beyond the boundaries of the medium. In 2003, developer Linden Labs launched Second Life, an MMO that was, in many ways, not a game at all. As the developers themselves put it, “There is no manufactured conflict, no set objective. It’s an entirely open-ended experience.” While the possibilities weren’t quite endless, they went far beyond what other MMOs tended to offer. You could buy digital goods in virtual shops, visit art galleries and nightclubs, attend discussion groups, go sailing, or even play games. (Yes, you could play games within this game that is not a game – we’re getting pretty meta, at this point.)

Thanks to this level of freedom, Second Life sits somewhat closer to current visions for the metaverse than, say, World of Warcraft. And over the subsequent twenty years, others have taken up this ambition to expand the boundaries of what video games can be, focusing on giving players creative freedom to set their own goals and interact with other players in open-ended ways. The enormous success of Minecraft, for instance, is inseparable from the way it allowed players to engage in large-scale building projects together – sometimes going to truly remarkable extremes.

Over the past few years, technological advances and societal changes have conspired to make this kind of metaverse-adjacent MMO more popular and more immersive than ever before. By the time the COVID-19 pandemic forced a mass adoption of digital socialising, games like Fortnite and Roblox were poised to step up, offering Gen Z, in particular, a way to stay connected.

Party time on the battle bus

For those wanting to track the evolution of the metaverse, there is no better place to look than Fortnite, which has steadily evolved from a more traditional MMO into what some now argue is the “real” metaverse, by contrast with Meta’s as-yet legless offering, Horizon Worlds.

When Fortnite launched in 2017, it focused on fairly conventional cooperative and player vs. player (PvP) gaming experiences. The Battle Royale mode was particularly popular, letting 100 players parachute into an expansive open world and fight to the death until just one team remained. By November 2018, the game boasted an astonishing 200 million registered users.

Part of what made Fortnite so popular was that, even with its competitive focus, it wasn’t just about gunning down other players til you were the last one left standing. If you wanted to take a breather, you could jump in a car and drive around listening to the radio, go fishing, and – most importantly – build your own structures from wood, stone and other materials. Of course, the game would ultimately force you into a kill-or-be-killed standoff, but there were plenty of different ways to get to that point.

In December 2018, the game’s developer Epic Games launched a brand-new mode designed to highlight these more relaxed and creative elements of the game. “Creative Mode” stripped out the combat and the competition and let players build whatever they liked, including crafting their own minigames that other players could try out. By the time pandemic forced vast parts of the world into lockdown, Fortnite had become a place to hang out, a pressure-free and open-ended space to unwind with friends. Roblox, which similarly allowed players to build their own games and play those designed by others, had begun to serve a similar function.

Video game art of a woman sitting behind a campfire in the woods.

In a perceptive essay for Harvard Business Review, written just as the pandemic was beginning to spread across the world, Sara Wilson coined the term “digital campfires” to describe a type of digitally mediated social activity that is rather different from the ones emphasised by most social media platforms. Digital campfires allow users to form smaller social groupings that focus on shared experiences – think a group chat with your friends or a members-only message board as opposed to your Twitter feed. 

While social media platforms were generally losing popularity with younger audiences (a trend that only TikTok is currently resisting, up to a point), these types of narrower and more focused social spaces were seeing a huge boom, and “games” like Fortnite capitalised. You could gather with as few or as many others as you liked to build things, play games of your own devising, or just hang around and have fun. 

Tellingly, a 2018 study found that 50% of teens said that Fortnite helped them to keep up with friends, leading one publication to describe it as more of a social network than a game. The same year, Netflix argued that Fortnite was its major competitor, not HBO.

Epic Games’ metaverse ambitions

Alongside Roblox a handful of others, Fortnite represents a major leap forward from MMOs like World of Warcraft, to the point that the “game” category loses its relevance and we start reaching for a new way to define them. “Digital campfires” is one, though it’s yet to see widespread usage. Another, of course, is “metaverse”.

Epic Games’ founder and CEO Tim Sweeney has been increasingly explicit that he sees the company’s projects as moving beyond gaming to something new and unprecedented. In 2019, he was asked whether he saw Fortnite as a game or as a platform, and his response was effectively “wait and see”.

The following year, he was describing Fortnite as a “self-evolving ecosystem” that would welcome “any brand” and “any developer” who wanted to get involved.

But all along, the term “metaverse” had been lingering in the background, waiting for its moment. In a talk at a virtual reality conference in 2016, Sweeney spoke about how he had long had the ambition to help build the metaverse but had been disappointed by the way that VR had failed to take off. Five years later, the success of Fortnite had brought his dream within reach.

Of course, Fortnite still falls far short of some of the most exciting visions for what the metaverse could be. It certainly lacks the VR-enabled immersive quality that Meta has put at the heart of its ambitions. Nevertheless, it offers a useful example of how digital marketing could be transformed by this new form of digital interaction – one that is already attracting hundreds of millions of users, many of them in a demographic that is the most digitally active in history.

Is Gen Z getting metaverse-ready?

Perhaps the key lesson that Fortnite offers for digital marketers is that Gen Z is increasingly driving digital consumption patterns – and it is pushing them in directions that simply do not fit with established expectations.

Gaming is a great example. Typically, gamers have been understood as a substantial but relatively self-contained audience with decidedly non-mainstream interests; they were easy to stereotype as young, male, and anti-social. But in 2022, this simply doesn’t reflect reality (if it ever did), and maintaining this view will be profoundly limiting for your digital marketing efforts.

According to a recent digital trends survey by Deloitte, 80% of people in the US and 75% of those in the UK play video games regularly. For younger generations, in particular, gaming has superseded all other forms of digital activity: Gen Z and millennial gamers spend 11 and 13 hours per week on average playing games, respectively. Across all five countries surveyed by Deloitte, Gen Z ranked gaming as their favourite entertainment activity and acknowledged that this led to them cutting back on things like watching streaming video services. (It looks like Netflix weren’t too far off the mark in identifying Fortnite as their main competition.)

What is more, younger gamers no longer see gaming as a self-contained hobby. Instead, it’s more like a digital hub that allows them to explore a range of interests and activities. Deloitte’s survey also found that a majority of gamers in the US and UK saw gaming as a way to express themselves, connect with others, and even discover new music.

With much of Gen Z on the cusp of adulthood, the “Twitch generation” is set to represent 27% of the world’s income by 2030. Finding ways to reach this lucrative but notoriously hard-to-read audience will be vital. This means understanding how gaming is evolving into a fully-fledged digital economy – and once again, Fortnite provides us with a compelling case study.

Making billions from digital wearables

In its first two years, Fortnite generated an astonishing $9bn in revenue for Epic Games. While this is a remarkable figure taken on its own, it’s even more eye-opening if you know that Fortnite is a free-to-play title. None of the game’s millions of players was required to pay a single solitary cent to start battling and building with friends and strangers from across the world.

So how on earth did the game earn Epic Games such an astronomical sum?

The answer is surprisingly simple, but it offers a significant lesson for how marketing will likely evolve in the metaverse. Fortnite was able to drive such enormous revenue thanks to one of the long-standing appeals of online interaction: you can look however you want. Whether you just want to change your hair colour to something a bit more vibrant or you’d like to become some giant goblin creature from outer space, your dreams can be fulfilled in a virtual world.

As a result, how you do choose to present yourself carries a lot of weight – if your digital avatar could look like anything at all, the fact that you chose this particular look becomes extremely meaningful.

Epic Games recognised that, whether you’re just hanging out with friends in creative mode or trying to rack up victories in the Battle Royale, chances are you’ll want to be able to show off your personality through your in-game avatar. But one thing that doesn’t come for free in Fortnite is customising your character’s appearance – that’s going to cost you real-world money.

And they went a step further than just leveraging the desire to stand out and turning it into a steady stream of income. They quickly began establishing partnerships with major IPs to provide in-game skins and items based on much-loved characters. Want to play as Darth Vader or Spiderman? No problem! You can play as characters from other games, like Lara Croft from Tomb Raider or Chun-Li from Street Fighter, or even actual people, like LeBron James or John Cena. You can also buy unique “emotes” – dances or other actions your character will perform on command, often with accompanying music.

All of this contributed to the chaotic, madcap fun of the game – think Deadpool battling Travis Scott before celebrating his victory by dancing to “Gangam Style”. But it also offered novel opportunities for brands to capture the attention of the game’s enormous player base. Where major film launches were once accompanied by plastic action figures and branded lunchboxes, now every new blockbuster has its own set of Fortnite skins.

But the possibilities for brand collaborations in Fortnite go much further than cosmetics and other in-game items, opening up new types of interactive experiences. Those who do consider Fortnite to be a fully-fledged metaverse point to the series of concerts that have taken place in the game, beginning with a performance by the American DJ Marshmello in 2019 and culminating – for now – with Ariana Grande’s “Rift Tour” in August 2021.

Grande’s performances showcased the sheer malleability of Fortnite as a platform or “ecosystem” as opposed to simply a game. More than twenty million players attended the performances, during which they were encouraged to interact with a shifting environment and follow a loose narrative as the music played. The experience was less a virtual reproduction of a real-world concert than a kind of collaborative performance that sits somewhere between concert, game, and music video.

Whether Fortnite should truly be classed as a metaverse is, as we’ll see below, open for debate. But what is inarguable is that Fortnite is acting as a laboratory for novel multimedia forms that far exceed the typical framework of MMO games. These new forms will provide exciting new ways for brands and artists to engage with their audience, and no one is more aware of this than Sweeney himself. In an interview with VentureBeat in 2021, he noted: “If you are a car manufacturer, your brand presence in the metaverse isn’t going to be a bunch of advertising for your cars. It’s going to be a place where you can actually drive the cars around and feel the experience of it.”

From ads to experiences

As Sweeney’s example shows, metaverse marketing will require a change of approach, a new creative mindset appropriate to the possibilities it offers. Simply extending existing tactics into the virtual world will likely not suffice.

Okay, we may well see virtual billboards or auto-playing ads that pause gameplay – in fact, the latter has been key to the massive success of mobile gaming over the past decade. But this model is likely to perform poorly compared with forms of marketing that truly embrace what the metaverse can do. As we’ll see below, metaverse marketing will need to actively provide value to users – it will have to be the content, rather than interrupting it. 

We’re already seeing the most forward-thinking brands pursue this kind of approach, especially if we turn to Fortnite’s main metaverse rival. Roblox has given brands like Nike the opportunity to build their own persistent virtual worlds within the game. “Nikeland” was launched in late 2021, and offered players a range of minigames to play as well as – of course – digital versions of Nike’s latest sneakers to outfit their avatars with. It also hosted special limited-time events, including a visit from LeBron James during NBA All-Star Week to help coach players on the virtual court. 

Nike’s experiment has proven to be a massive success. By September 2022, Nikeland had seen nearly 7 million unique visitors from 224 countries.

Of course, the possibilities for brands to engage in this type of virtual world-building are only just beginning to be explored. If we do consider Fortnite and Roblox to be metaverses rather than games, then marketing on these platforms is clearly in its infancy.

But there are valid reasons to believe that, however innovative these proto-metaverses may be, they represent a limited and partial vision of what the metaverse could be. For some of its more vocal proponents, the metaverse will – or even must – go much further than this. They argue that the metaverse must transform the very foundations of the web, or risk falling far short of its true potential. And by this definition, Fortnite can’t measure up.

In order to understand what is at stake in this debate over the true meaning of the metaverse, we’re going to have to broach another hotly contested term that has suddenly sprung to prominence over the past two years: Web3.

The Web3 revolution

As the name implies, Web3 is the next big paradigm shift for the web – according to its supporters, at least. It marks an evolutionary step beyond the Web 2.0 era of user-generated content and massive corporate-owned platforms, which began in around 2004 and may or may not be in its death throes.

Web3 – the story goes – will undo many of the downsides of the Web 2.0 era while retaining most of the benefits. And there certainly were benefits. The early web (rebranded, retrospectively, as Web1) was largely composed of static, text-heavy websites with little potential for interaction. These websites were accessed through a browser on a desktop computer using a slow dial-up connection – hi-def video was way out of the question, and even gifs were a struggle. Eventually, when you’d read enough web pages or seen enough low-res images, you turned the internet off and went outside. 

And then Web 2.0 came along and changed everything. It let you do all kinds of exciting things, like post photos of your lunch for thousands of strangers or watch other people play video games while you were on the bus home from work. Many of these were things you’d never even realised you wanted to do in the first place, but once you started doing them, they quickly began to seem like an essential part of your life. How had you ever survived without being able to order furniture in bed at 3 am?

But Web 2.0 also came with major downsides. It made the web a fundamental part of our everyday interactions, but it also saw a small number of companies shape those interactions to suit their interests, and some pretty bad things resulted. From invasive data gathering to mass-scale harassment and political misinformation, the rapid growth of the Web 2.0 era brought with it a range of socially damaging side effects. As the platforms got bigger, the dangers became more apparent. But it didn’t seem like the tech giants had any solutions to the problems their products had created. 

By the late 2010s, it was becoming clear that something would have to give. It was increasingly common to see opinion pieces in mainstream publications with titles like “Have Smartphones Destroyed a Generation?” or “Tech Companies are Destroying Democracy and the Free Press”. And it wasn’t just the media that was worried. Lawmakers were increasingly concerned that yes, big tech really was about to tear major holes in the fabric of society. 

Two people wearing VR headsets looking out across an abstract computerised landscape in a vaporwave style.

In the autumn of 2021, matters came to a head. Frances Haugen, a former Facebook product manager, leaked a trove of internal research documents to the Washington Post. These documents revealed that not only were everyone’s worst fears about the influence of Web 2.0 platforms likely true, but Facebook itself was also well aware of this. Facebook’s own research showed that Instagram could have a profoundly damaging effect on the mental health of teen girls, that its algorithm sometimes funnelled users toward harmful content, and that the platform was being used for political manipulation and human trafficking across the developing world.

However, Facebook seemed to be unwilling or unable to do anything about it. Part of the issue was economic: changing its algorithm to protect users’ mental well-being would threaten the company’s bottom line, given the platform’s reliance on an “attention economy” model where time spent on the platform is virtually its only source of profit. (As of 2021, advertising contributes around 98% of Facebook’s total revenue.)

Meanwhile, successful content moderation for a platform boasting hundreds of millions of users across Asia, Africa, and Latin America requires local knowledge and wide-ranging language expertise that can only be supplied by actual humans. Needless to say, this would be incredibly expensive and likely impossible to actually organise. As a result, Facebook continues to rely largely on automated moderation processes that are singularly unsuited to many of its largest markets.

Following Haugen’s revelations, regulators ramped up their efforts to exert greater oversight of a sector that had long benefitted from a hands-off approach. The US, EU, and UK all began to develop comprehensive new regulatory frameworks designed to force the Web 2.0 giants to take their social impact more seriously, respect user privacy, and limit their threat to democratic institutions.

It was in this context that the vision of a paradigm shift for the web began to take hold. Rather than attempting to rein in the excesses of Facebook, Google and others, why not dream a little bigger? Why not see if we could rebuild the web from the ground up to make it fairer, freer, and more democratic?

And beneath all the technical jargon (of which there is plenty), this is really what Web3 is. It’s a vision for a better web, one that benefits all users and not just a small handful of Silicon Valley CEOs. Its promise is fairly clear and certainly compelling. Though the web as it exists now has its limitations, to put it mildly, in the coming years (or more likely, decades) another, better web will emerge. Put in those terms, it’s hard to see the downsides.

But how are we actually going to achieve this? Saying that we’re going to transform the web for the better is one thing; doing it is quite another. And that’s where Web3 starts to get a bit more complicated. Because Web3’s answer is (I’m sorry to say) yet another tech industry buzzword: crypto.

So, what is crypto, exactly?

The first thing to stress is that crypto is something of a misleading name, which is at least part of the problem with defining it. In simple terms, crypto is just an abbreviation of cryptocurrency. So, it refers to things like Bitcoin – digital payment systems that are decentralised and permissionless (we’ll get into what this means shortly) and which use cryptography to function.

However, it’s now regularly used to mean much more than this. Crypto, as a general term, now refers to all of the wild, strange and innovative things that have been built on the same foundation as cryptocurrencies – things like NFTs or DAOs, for example. (Yes, there are a lot of acronyms.) Thankfully, all the many different things that fall under the umbrella of “crypto” share two basic elements.

Firstly, they both rely on a technical infrastructure called the blockchain. Now, we don’t really need to get into the mechanics of the blockchain here – what’s important is what it does, rather than how it does it. The blockchain is a decentralised system for processing payments and transactions of various kinds. Some blockchains – such as Ethereum – can also be used to execute simple computing functions. What’s important is that, in both cases, this happens without any central authority managing or controlling the process. Instead, the system is regulated using a set of automated rules, and the transactions are verified and executed by a globally distributed network of computers – a network that anyone is free to join. 

While the mechanics of making this work are complex, the consequences are significant. In principle, the blockchain removes the middleman from digital interactions, allowing for a truly open and peer-to-peer foundation for the web.

And this leads us to the second key thing that all things crypto share: a philosophy of how the web should work. Crypto is fundamentally antithetical to the entire basis of the Web 2.0 era. It seeks to restore individual autonomy against what it sees as the inescapable dangers of large, centralised institutions like, for example, Facebook and Google.

In the crypto space, this combination of blockchain tech and an ethical commitment to openness and freedom tends to be framed in terms of three core values that blockchain-based projects should embody. They should be: 

  • Decentralised. There is no single person or organisation in charge of the project, and nobody can unilaterally change how it works.
  • Permissionless. Anyone and everyone can take part – there are no gatekeepers, nobody who can admit or refuse entry.
  • Trustless. Because nobody is running the show, there’s no need to worry about those in charge exploiting users – or their data – for their own benefit. Privacy and security are guaranteed by the transparent rules of the blockchain itself, which are available for everyone to examine.

While the first crypto projects – Bitcoin, for example – were focused on financial transactions, crypto enthusiasts argue that the same underlying concepts can be used to power a whole range of digital activities, from social media platforms to videogames to eCommerce platforms, all of which would embody these principles.

Some crypto enthusiasts are committed to these ideals in principle. They just think that it’s better – safer, perhaps, or freer, or more democratic – for things to work this way. They tend to adhere to free market libertarianism, or even some strain of anarcho-capitalism, and argue that markets are the most efficient and least tyrannical way of organising society.

Vaporwave art of a futuristic city skyline at sunset.

But you don’t need to share these political views to see the upside of a web built around crypto’s core principles. The potential benefits of blockchain-based systems are obvious if you look at how the web currently works – or doesn’t. As we saw above, the Web 2.0 era seems to have plunged us all into a nightmare of digital surveillance, harassment, and misinformation. According to crypto advocates, these issues are a consequence of centralisation. We’ve all accepted a Faustian pact in which we give up our autonomy and privacy in order to be able to share photos with our friends or watch videos of other people eating.

But what if we didn’t have to? And this is where the vision of Web3 comes in. Instead of a web dominated by data-hungry, sociocidal platforms run by a handful of billionaires, we’d have a web built on the blockchain. It would be, by design, an open and democratic place, where nobody gets to decide how the web should work and the benefits are shared by everyone.

This is the idea, at least. In practice, most of the major benefits of a blockchain-based Web3 remain theoretical. Nevertheless, this should provide a sense of why some people see crypto as much more than just a way to spend six figures on a jpeg. 

On the face of it, the sight of Jimmy Fallon and Paris Hilton holding up printouts of pictures of cartoon apes that they’d willingly spent a quarter of a million dollars on is deeply hilarious – or a vision of the apocalypse, depending on your perspective. But the implications for how the digital world might look in the coming years are potentially enormous.

Who will control the metaverse?

At this point, you may be wondering: what does this all have to do with the metaverse? Well, the answer is: quite a lot or nothing at all, depending on who you ask. (You’re probably seeing a pattern here.)

Of course, at the most basic level, both Web3 and the metaverse are presented as the future of the web. So, on that basis, they are either competing visions for how the web will evolve, or they are interrelated. For most crypto enthusiasts, it’s the latter. The shift to Web3 is generally presented as inseparable from the rise of the metaverse – a metaverse that, thanks to crypto, won’t be a dystopian nightmare of mass surveillance and exploitative monetisation practices.

Understandably, Meta has been a major target for those who see Web3 as essential to the metaverse. Given that Facebook, in particular, has hardly covered itself in glory in recent years, the prospect of trusting Meta to build a more immersive and all-encompassing version of the web seems, well, a bit risky. A metaverse built on the Facebook model could be, as tech writer Matthew Gault puts it, “the ultimate surveillance tool”, allowing for “the monetisation of all human behaviour” in the interest of profit and at the expense of anything resembling privacy. 

Of course, for Mark Zuckerberg, this may not be a concern. After all, he famously argued that privacy is “no longer a social norm”, so why worry if a billion-dollar tech empire is monitoring your facial expression in real time?

But a blockchain-based metaverse isn’t just about resisting the relentless data capture that currently drives the web’s biggest platforms. Its implications go far further. And in order to see this more clearly, let’s return, one last time, to Fortnite.

The problem of digital ownership

Above, we saw how Fortnite used the lure of digital skins and other cosmetics to become a multi-billion dollar revenue source for its developer Epic Games. And though digital collectables have often generated incredulity – why would you spend money on a bunch of pixels?! – their appeal is actually quite obvious, especially if you think about how Gen Z is using these platforms. If you’re spending hours a day hanging out with your friends in a virtual world, you’re going to want to customise your appearance and express your personality just like you would in person.

But when you buy a skin or an emote in Fortnite, what are you actually buying? Despite the easy analogy, it’s not actually all that similar to buying clothing in “real life”. When you buy a pair of shoes, the transaction is quite straightforward – you give money, you get shoes, you take them home and wear them, or maybe just leave them in the cupboard and forget about them. Pretty simple.

But when you buy, say, a Spiderman skin in Fortnite, the process is a bit more complicated. In exchange for a certain amount of in-game currency, the skin is assigned to the account you use to log in and play the game. And while this account is in some sense yours, tied to an email address you control and using a password that only you know, it is ultimately controlled by Epic Games. This is made clear in the elaborate terms of service and the end user license agreement to which you agree when you sign up, though you will likely not have read them.

Two people wearing VR headsets in an abstract computerised landscape gesturing to one another with their hands.

This has various implications, the most important of which is that you don’t actually own the collectables you’ve bought on Fortnite in the same way that you own the shoes. Epic Games can, for instance, ban your account if they suspect you of cheating, meaning you’ll no longer have access to your digital goods.

You are also unable to sell your collectables to others. If you happen to own a rare skin, it’s great for showing off in-game, but you won’t be able to make a little money by selling it to another user. Nor can you transfer it to any other virtual worlds you may like to hang out in – you can’t wear your Fortnite Spiderman skin in Roblox, just like you can’t take your Nikeland digital sneakers to Fortnite. This is sort of like owning a pair of shoes you can only wear within a certain radius of the place you bought them. Which is to say, it’s pretty terrible.

Part of the reason for these limitations is the long-standing challenges posed by buying and selling digital assets. As the film and music industries quickly discovered around the turn of the millenium, digital files like mp3s are a lot easier to duplicate than, say, DVDs or CDs, never mind vinyl records (or shoes for that matter). File-sharing – or “piracy”, as major labels and movie studios preferred to call it – posed a near-fatal threat to the profitability of the entertainment industry in the early 2000s. Why would you and all your friends buy an album when one of you could buy it and duplicate it at no extra cost? Or if, say, someone you didn’t know and had never met buys it and uploads it to a site where thousands of people could all download it in minutes?

The threat was ultimately warded off by a shift to access-based models, as opposed to trying to replicate real-world ownership in a digital form. So, instead of actually buying digital files that you could then dispose of as you saw fit, you paid to be able to access certain content through a centralised (yes, that word again) platform – replacing your hard drive full of mp3s with a Spotify subscription, for example.

This shift obviously worked out well for record labels and movie studios – though much less so for musicians. But in the context of Fortnite, the downsides of this approach are obvious. Spending hundreds of pounds on digital goods that are never really yours in any obvious sense, and which you could lose access to for a whole raft of reasons, seems like a fairly unpalatable prospect.

If we take Fortnite to be a model for what the metaverse will become, this seems especially problematic. If we’re going to be transferring a great many of our daily activities into an immersive virtual world, then ideally we’d be able to actually own our digital assets in some familiar sense. Personally, I don’t want to spend money on virtual real estate if the developers can evict me without warning.

This is where crypto comes in. For crypto enthusiasts, this is a clear-cut case of the danger of centralisation and of systems that rely on trust. Yes, you could accept the status quo and hope that, for instance, Epic Games doesn’t update its terms of service or just decide unilaterally to ban you. Or we could dream a little bigger, and imagine a metaverse in which you have true digital ownership and the freedom to do whatever you want with your digital goods.

And not only do crypto enthusiasts know what the problem is, they have the answer: NFTs.

NFTs in the metaverse

The 2020-21 crypto boom was at least partly attributable to the craze for non-fungible tokens, or NFTs. NFTs are, in simple terms, digital assets that are provably unique. Unlike an mp3, for example, an NFT cannot be duplicated, and they afford owners full rights to dispose of them as they choose – including selling them on at a price of their choosing. (In fact, ownership rights for NFTs are a bit complicated, but generally they are far more secure than those offered by centralised platforms.)

While NFTs have been largely used to buy and sell digital art – another medium that had found its profitability hindered by the ease of duplicating digital files – they can also be used for things like in-game items and digital wearables. Using them in this way would profoundly transform the appeal of buying digital assets. If Fortnite skins were NFTs, then users would own them in a much fuller and more familiar sense of that term. Nobody, including Epic Games themselves, would be able to take a user’s NFTs away or gatekeep access to them, and they could be sold and traded freely.

Pixel art of a cityscape at sunset.

What is more, NFTs give users a much more direct stake in the success of the platforms they use. If you own a range of Fortnite cosmetics and can freely sell them to others, then the increasing popularity of Fortnite will also increase the value of your collection. As a result, you have a vested interest in helping the platform to continue thriving, which incentivises user engagement and discourages destructive behaviour.

There are a range of other uses for NFTs that are becoming increasingly prominent. For instance, NFTs can be used as access tokens. This would mean that owning NFTs from a certain collection could provide you access to a location within the metaverse that would act as a kind of digital clubhouse. The highly successful Bored Ape Yacht Club (BAYC) has already begun to explore this model, and will likely expand it further with the forthcoming launch of their Otherside metaverse project.

For brands looking to enter the metaverse, NFTs open up innumerable possibilities. While younger audiences are clearly already willing to spend on digital assets on centralised platforms like Fortnite, the added functionality and openness of NFTs can help to accelerate their adoption while giving brands a new way to strengthen a sense of community among their customers.

This emphasis on community is perhaps the most vital takeaway for marketers looking to get metaverse-ready – and it is where the connection between Web3 and the metaverse is most significant.

Building communities in the metaverse

While companies like Nike have seen success with their popular Roblox activations, others have been more willing to explore blockchain-based alternatives like Decentraland and The Sandbox. While these platforms lack the user numbers of their centralised competitors – indeed, there is some controversy over just how small their active userbase is – their commitment to web3 principles has made them a focal point for crypto enthusiasts.

Both platforms have their own native cryptocurrency, and in-game assets – including virtual land – are sold as NFTs, meaning that users can buy and sell them at will on an open marketplace. For its advocates, this highlights the “ownership economy” model that makes Web3 such an important step forward. If you own land in The Sandbox, then the growth of the platform will tend to make your land more valuable. If you focus on building a particularly fun and engaging place for people to visit in Decentraland, you can directly benefit from the popularity of the space.

This forms a sharp contrast with the familiar model of paying creators a small fraction of the ad revenue their content generates while subjecting them to arcane terms and conditions and the perpetual threat of takedowns and demonetisation.

This aspect of the emerging Web3 metaverses has attracted brands that are more broadly bullish on crypto. Perhaps the most prominent example is Nike’s eternal rival Adidas. In December last year, Adidas bought a plot of land in The Sandbox with the intention to provide a space for branded content and virtual experiences – though this has yet to come to fruition. Samsung, meanwhile, has turned a plot of land in Decentraland into a virtual replica of its flagship New York store, hosting launch events and offering visitors exclusive NFTs.

Needless to say, by contrast with the massive sums generated by Fortnite and its millions of active users, these crypto-driven metaverse experiments remain small-scale and tentative. Decentraland and The Sandbox lack the level of investment and game development experience that companies like Epic Games can provide, and as a result, they can be, well, a bit janky. Understandably, while companies are willing to dip their toe in, few have made the kind of commitment that Nike has made with Roblox. With the crypto world suffering from notoriously high levels of volatility, the risks may well outweigh the rewards for now.

But Adidas and Samsung may ultimately come to benefit from their willingness to experiment with the marketing opportunities that Web3 has already provided. Even failed experiments can prove extremely useful when it comes to navigating complex and cutting-edge new tech. If and when the crypto market bounces back from its current slump, they’ll be well-placed to take advantage.

The bottom line: How to get started in metaverse marketing

As is hopefully clear by now, the metaverse can’t be reduced to any existing models of online interaction – even thinking of it as a combination of an MMO, an eCommerce store and a social media platform will likely prove restrictive.

Perhaps the most influential voice in the ongoing debate over what the metaverse will be is Matthew Ball, a venture capitalist and former Head of Strategy for Amazon Studios. If a major publication needs a metaverse expert to provide some insider insights, Ball is the likely choice. And if you’re wanting an idiosyncratic overview by a highly committed advocate for the importance of the metaverse, you could certainly do worse than Ball’s multi-part Metaverse Primer.

In a recent article for Time magazine, the title of which boldly declares “the metaverse will reshape our lives”, Ball offered a definition of the metaverse that seeks to capture the sheer breadth of potential it embodies. The metaverse, Ball argues, is “a parallel virtual plane of existence that spans all digital technologies and will even come to control much of the physical world.”

Obviously, this is a fairly sweeping statement. But it clarifies this sense of the metaverse as far more than a tool we use – it is a place to inhabit. While the web already offers us supplements to – or replacements for – many everyday activities, from social interaction to shopping, we still tend to treat it as something external to and separate from what we persist in calling “real life”. The metaverse will undermine this ready distinction, with consequences we cannot fully predict.

Part of this unpredictability is tied to the uncertain role that blockchain tech will play. Will the metaverse lead to a new set of “walled gardens”, self-enclosed platforms that try to capture and keep as many users as possible? Or will it be the dawning of a new, more open era for the web, where ownership is handed back to the users? At present, it’s difficult to tell – especially given that even Meta is talking about the need for “interoperability” and avowing that no single company can build the metaverse.

When it comes to the metaverse’s impact on marketing, this uncertainty can be frustrating. It means that there are no tried-and-true strategies to rely on, and no approach can be singled out as offering guaranteed results. Nevertheless, by looking at both the existing trends and the ongoing arguments about what the metaverse could or should be, we can make a few suggestions for those looking to take their first steps into this exciting – and potentially transformative – new space:

  • Identity is key. As virtual worlds morph into all-purpose social spaces, users are seeking ways to display their individuality. Brands that offer users an opportunity to express themselves in the metaverse will do well. This may mean offering digital wearables or building interactive experiences that let users explore their creativity.
  • Community matters. Seeing the metaverse as a “digital campfire” rather than just a 3D version of Twitter highlights the importance of cultivating a sense of belonging and affinity. Users will be attracted to virtual spaces that understand this, and which encourage a sense of shared ownership. Blockchain-based approaches are particularly useful here, as tokenisation allows users to benefit from the growth of a platform.
  • Be clear about what you are offering. Your initial focus should be on what you can offer to your audience, not on how you can make a sale. The priority should be to build engaging experiences or offer interesting content to attract users. If done well, this can act as an extremely powerful foundation for more conversion-focused, bottom-of-the-funnel approaches. 
  • Know your enemy. If you do decide to take a more crypto-heavy approach, it’s important to know that many users are wary, and understandably so. The crypto world is rife with scams, so developing trust should be at the heart of your approach.
  • Get your hands dirty. Ultimately, those best placed to take advantage of the metaverse’s multi-trillion-dollar opportunity are those willing to dive in and learn by doing. The best way to get yourself metaverse ready is to simply start experimenting – start making things in Roblox, take a tour around Decentraland, craft an avatar in Horizon Worlds, and see what happens. This is the only way to really understand how virtual spaces are evolving, how people are using them, and what they might want out of a metaverse experience.

A few final thoughts on marketing and futurology

Digital marketing is, in large part, about making predictions. This is true even at the level of an individual campaign: if I use this copy, with these visuals, on this platform, targeting this audience, I will (probably, hopefully) get strong results. But it applies even more when you look a little further ahead and start thinking about how to set yourself up for success in the coming years. The digital world is marked by ceaseless change, and it can be almost impossible to tell what the landscape will look like six months from now, never mind five years. What new devices and platforms will have emerged? What new types of content will be dominant? What tried and tested approaches will be obsolete?

Of course, nobody knows for certain. But unless you can make a pretty solid guess, you’re taking a serious risk. You may find yourself heavily invested in a failing platform, or missing the boat on a major new innovation. And whereas with an individual campaign you can test, adapt, and iterate based on a constant feed of data, the same can’t be said for longer-term predictions. Your ideas about, say, the state of social ads in 2024 will likely only be contradicted when it’s too late to do much about it. (Here’s a hint from our social ads manager: you need to be on TikTok!)

A blurred illustration of a neon-lit cityscape at night in the rain.

This means that a successful digital marketer will also be a kind of futurologist – someone who can make confident, informed, and imaginative hypotheses about how the digital space will evolve, and use these to shape their strategy in the present.

As we’ve seen, the metaverse remains a contested and controversial topic. For every Silicon Valley CEO claiming it will soon shape the way we live our daily lives, there are others saying it has already proven a disastrous failure. And there are compelling arguments in both directions. Those who follow the money will see companies like Microsoft and Meta pouring billions into building the metaverse, while others will argue that the necessary tech is still years or even decades away.

In this situation, the best option is not to go all in on either side but to focus on being prepared. Whatever the metaverse ends up being, those who are currently building their knowledge and expanding their comfort zone by dipping their toes into the digital oceans of Fortnite or The Sandbox will be best able to stay ahead of the curve. And with the future increasingly in the hands of the most digitally savvy and online generation in history, this is the only safe place for marketers to be.