Have we seen the peak of a branded Web3?

RIP to whoever spent god-knows-what on a Taco Bell NFT. Despite big promises, the NFT market is way down and crypto has crashed, leaving marketers wondering if Web3 is an area they should keep paying attention to or investing in.

Like we wrote last year on the heels of Facebook’s Meta makeover, Web3 and the metaverse still feel a bit overhyped and, it would appear, further away from mass adoption than ever before. According to a recent poll of more than 700 Marketing Brew readers, nearly 50% said they think Web3 opportunities for marketers are overhyped, while only 23% disagreed. (The remaining respondents said they weren’t sure.)

To be clear, advertisers and brands haven’t yet given up on the metaverse or other Web3 concepts. Rather, they’re trying to make it all more approachable and, in some cases, avoiding Web3 terminology altogether.

“Some of that big hype around the metaverse as a concept, everybody wanting to talk about the metaverse and how it was going to change everything very quickly, has really died down,” Sky Canaves, senior analyst for retail and e-commerce at Insider Intelligence, told us.

Not to mention the US economy, which is in a much different place than it was last year. Advertisers have curbed spend, impacting tech companies like Meta and Snap.

That could mean there’s less time and money for experimentation, potentially taking money away from metaverse concepts that the director of the IAB Experience Center, Derek J. Smith, called a “black box in every sense of the word” for most marketers.

Web3 Who Must Not Be Named

In 2022, “all the agencies were vying to be the ones knowledgeable about [the metaverse]…the KPI was to get the headline rather than conversions or audience acquisition,” Zoe Soon, VP of the IAB Experience Center, told Marketing Brew. Citing Gartner’s Innovation Curve, she said the industry’s relationship with Web3 has moved past what Gartner calls the “innovation trigger” and is heading toward the “trough of disillusionment.”

Basically, we’ve enjoyed the party, and now advertisers are trying to create a strategy that goes beyond buzz.

“It’s sort of like when you start any project, that brainstorming part is really fun. ‘We could do this, we could do that.’ And then you get into the execution phase of, like, ‘Okay, how do we measure this? How do we connect this with other things that we’re doing? How do we build a strategy moving forward?’” Soon said.

Still, Canaves said she’s surprised by the amount of activity she’s seeing from brands playing in the Web3 space. For example, she pointed to Bloomingdale’s, which recently debuted a virtual store featuring brands like Nespresso, Ralph Lauren, and Chanel. (This intrepid reporter would describe the five minutes he spent in Bloomingdale’s virtual space as both cozy and nauseating.)

Nike’s Swoosh Web3 platform, which will hold the company’s “virtual creations,” according to its website, is currently an invite-only beta. In late 2021, the company acquired the virtual-goods company Rtfkt for an undisclosed amount.

Notably, nowhere on the Swoosh site do the words “NFT,” “crypto,” or “metaverse” appear. There’s only a brief mention of these concepts, where Nike assures customers that they don’t have to be Web3 experts to use Swoosh.

Similarly, Reddit recently decided to make its NFTs “more approachable,” its head of global client solutions told Ad Age last month, by calling them “collectible avatars.”

“Overall, consumers have become a lot more skeptical. They’ve seen NFTs used in scams; they’ve seen pump-and-dump schemes. Brands have to have some awareness of that when they try to sell this to consumers,” Canaves said.

Blend together

Of course, many of the chief metaverse officer roles that were created in the last year haven’t yet been put out to pasture.

Though the role was in “skunk-works mode for nearly a year” before a more formal announcement, Jeremy Cohen was named Publicis Groupe’s SVP and head of Web3 investment in May. 2021 was great for “recognition,” he told us. Now comes the hard part.

“The headwinds are where you have these terms—metaverse, crypto, Web3—they’ve all been kind of blended together. And that has caused confusion and some problems,” he told Marketing Brew.

Cohen helps clients enter the largely unregulated world of Web3. Publicis is currently working on tools that are designed to help them not only navigate the space, but also alleviate potential advertiser  concerns, like “crypto exposure and liability,” he said.

“Our thesis has been that the largest hurdle for brands entering Web3 is the lack of regulatory clarity around what companies—especially large, publicly traded companies—can and cannot do,” he said. “The most significant challenge,” he said, is that few brands have the ability to transact in crypto, or have built wallet infrastructure.

Still, as his title would suggest, he is bullish on its applications, and he said clients are still interested. “We have not seen a falloff in interest and demand…The complexity is ramping up,” he said. “Brands are starting to realize they’re not just going to mint an NFT for the sake of minting an NFT.”