“It’s 1994 all over again”: why the foundations of Web3 need to be built by marketers

Suresh Balaji, HSBC Asia CMO, explains how the industry can avoid making the same privacy mistakes of the Web 1.0 and 2.0 eras.

From the ‘Wendyverse’ to the Fender ‘Stratoverse’, more brands are dipping their toes into the virtual waters – with Web3 platforms forecast to have a marketing value of $759bn by 2026

In response to this warp-speed growth, The Web3 Marketing Association (W3MA) launched earlier this year, with founders and launch partners from HSBC, Unilever and Wunderman Thompson.

The not-for-profit organisation aims to help usher in the next generation of marketing where “all brands are able to successfully and authentically participate in the world of Web3, including blockchain, VR, AR and NFTs”. 

Following on from the launch (and a rush of key new members coming on board), PMW caught up with Suresh Balaji, CMO at HSBC Asia and one of the founders of the W3MA, to talk smart blockchain contracts, customer protections and recruiting metaverse marketing managers.

In his travels talking to the global marketing community via HSBC, Balaji witnessed companies  struggling to identify the key marketing applications of Web3 and an industry on the verge of making the same mistakes it made with past iterations of digital technology. 

While other established trade bodies, such as the Global Alliance for Responsible Media (GARM), are incorporating metaverse guidelines into their codes of practice, the W3MA aims to build best practice standards into the very DNA of Web3 platforms as they evolve into mainstream utilities over the coming years. 

The organisation hopes that this proactive approach will put marketing opportunities and standards at the centre of the user experience. 

“Probably the big miss in the emergence of Web 2.0 around 2004 was that CMOs really did not lean in hard,” Balaji explains. “During its development, most CMOs were sort of passive bystanders in its technology development. Everything that we talk about now, such as customer privacy and protection and why programmatic marketing feels like people are being stalked on the internet… all of that we could have stopped at the start, if we had put the right kind of guardrails in place and we developed it with customers at the heart of the platform.” 

The key scenario the W3MA wants to avoid is the next generation of web platforms being built purely by technology specialists and cryptocurrency brokers, risking a siloed ‘wild west’ of conflicting standards and customer protections. 

“Web3 is clearly a much more immersive world…a much more decentralised world,” Balaji continues. “It's going to be a world that has a stronger proof of purchase, proof of transaction and for marketers… proof of work. With all of those in place, how do we put these technologies to good use to be able to progress?”

Helping marketers build Web3, not just participate in it

Set up as a not-for-profit trade body with inclusivity at its heart, the W3MA aims to be as open as possible to new members, using the same decentralised autonomous organisation (DAO) structure as used by the blockchain systems it promotes. 

Member firms get to design the future of Web3, train their teams, and access research, partners’ marketplaces, and events. The W3MA’s key areas of focus are Web3, blockchain, the metaverse, NFTs and gaming, with partnership tiers based on size of  firm or capital strength. 

“We really want to help create the next generation of the internet through the power of marketing,” says Balaji. “So why marketing, right? We may say, why not the power of technology or why not the power of gaming? The next generation of the internet is currently taking shape on platforms like Roblox and Minecraft. There’s not a truly immersive killer app that’s appealing across demographics, because there's a lot more that needs to be done.” 

“At this point in time with Web3, there's a massive amount of information asymmetry. It is 1994 all over again. “What is this thing called the internet?” Now, it’s “What is this thing called the metaverse?” I think there's a big role we as marketers can play in helping cross the bridge.”

New standards for the next generation of marketers

Web3 technologies are growing at a lightning pace, with more brands getting involved each day. But when it comes to the true value of the metaverse, the collective consensus in adland is ‘wait and see’.

However, Balaji thinks CMOs and their influence are hugely important to Web3’s development… and success. “If we don't do it now, I think we will miss the trick again,” he warns. 

“The key problem with the major players right now; Meta, Roblox, Minecraft, Decentraland, Sandbox, for example, is there is not enough information available across all platforms. We want to create learning opportunities and platforms where you can connect with the verified partners. What are the consumer protection standards, advertising standards and the measurement standards within the metaverse?”

Balaji is realistic about the timeframe of growth for Web3 technologies - but also about how crucial it is to get standards into next generation tech as early as possible. 

“We're structuring ourselves in committees, such as a token and NFT committee. Tokenization is a huge piece of the puzzle. For example, if someone has a unique Batman mask [NFT] and loses it, is there full consumer protection? What about across platforms?  None of this is straightforward. We want to ensure that customer experience principles are not thrown out the door when these platforms are being built, or we will turn people off straight away.

“It's not all about policing, it's also about what is best practice. As part of our role, we are talking to various metaverse platforms to come on board as one of our partners, looking at governance considerations around compliance, legal and finance. With finance, for example, we aim to create a marketplace for verified currency vendors, to help brands decide and standardise which wallet to go with.”

The jobs of the future: introducing the Metaverse Marketing Manager 

In his role as CMO for HSBC Asia, Balaji has taken the financial giant into the metaverse itself, with virtual real estate in the popular Sandbox world. As a result, the company is now recruiting for its first Metaverse Marketing Manager.  

Balaji’s eyes light up. “These jobs didn't exist a year ago!. I tell my team that it is the obligation of this generation of marketers to create the next generation of the internet. It's our duty of care for our customers because that's the future; zero party data and true blockchain-led smart contracts. 

“That's what brand marketer communities need to get ready for. We are looking for people who understand blockchains, NFTs, VR and AR, gaming technology, data analytics, marketing effectiveness and brand tracking.

“We get loads of CVs, but not many of them are really fit for purpose because there have been very few industries where the blockchain has had a deep impact. Evidently there is a lot of interest, but how do we get people who are interested in this metaverse world armed with the knowledge for the jobs of the future? At W3MA, we are in the process of creating a training marketplace to help meet this demand.“

Setting ethical and sustainable targets 

The industry has come a long way since the birth of Web 2.0, defined by principles such as user generated content and APIs, and Balaji points out advantages and challenges that this existing maturity brings for the next generation of platforms

“Web3 isn’t going to live in isolation. It will exist with Web 2.0, Web 1.0 and even Web zero!” Balaji points out. “So there's a big opportunity for brands to be authentic across all of these platforms.  We will need brand protection from bad actors. Age appropriateness or inclusivity, for example. How do you ensure that everything that brands and human beings stand for in the real world is transported authentically into Web3?

“Then there’s the issue of compliance. What does that look like?  There are also sustainability issues. Is web3 helping humankind, or will it become what many Web 2.0 businesses became? What does blockchain do to the planet and what are the solutions? There have been ideas put forward, such as connecting transactions to carbon tokens.”

Beyond the shiny apps: how blockchain can rebuild trust in the ad supply chain

One of the biggest selling points for marketers in the Web3 world is how an open metaverse can transform personalised marketing and the abundance of zero party data it could create. 

“I think we are all slightly distracted by the metaverse and NFTs,” Balaji says. “The real power of blockchain is to take away gaps in wherever there's a trust deficit. These smart contracts can fill that space. It's going to permeate everything. There could be digital twins and training programs. The use of  blockchain to validate customer data. The use of blockchain in hospitality, airline ticketing and trade finance.

“The world is moving towards zero party data, a post cookie performance world. Blockchain is one of the roots to resolve those true smart contracts, in a way that consumers are protected, their data is protected and regulation rules are maintained.”

Thinking outside the (sand) box

Amidst all the land grabs and NFTs, it's easy to forget how unlimited the Web3 world can be - and how brands all too often stick to their comfort zones when making metaverse experiences. 

“I’ve spoken to some marketing managers and they talk about their virtual worlds or VR microsites,” Balaji says. “That’s just the tip of the iceberg. It's the shiny marketing application layer, right? There’s a sales application layer. There’s potentially a trading application layer.

“It's funny that many brands go into the space and create a physical likeness of their real world experiences. But the metaverse doesn't have laws of physics. It's not constrained by anything except your own brand guidelines. There's a big opportunity to imagine a new world that is fundamentally better than real life.”

Balaji concludes: “I think that is the big opportunity here. Be an authentic brand yourself and connect the thread between your 0, 1, 2, 3 web experiences. Go beyond the metaverse, go beyond NFTs into applications of blockchain and tokenization and fractionalisation and decentralisation and customer protection.

“It's just insane, right?” he beams. “The amount of opportunities that it opens. We’re not in Kansas anymore…” 

Read more about the Web3 Marketing Association here