Prepare for Web 3.0. A Conversation with SCS’ Sean MacPhedran

Just when you thought you had mastered Web 2.0, we now welcome Web 3.0. While the definition of 3 is still forming, Sean MacPhedran, Senior Director of Innovation at SCS, an agency start-up in California, is able to predict some of the certainties from the findings of their recent  Metaverse Report.

Charlene Weisler: What is Web 3.0?

Sean MacPhedran: The specific definition of Web 3 changes based on who you ask. Broadly speaking, it is an evolution of how we interact with digital media driven by the convergence of multiple new technologies that will create a similar level of disruption as we saw in the shift from Web 1 to Web 2. At that time, Blockbuster was replaced by Netflix, AOL by Facebook, and Taxis by Uber. Common themes of Web 3 are Decentralization, Artificial Intelligence, Ubiquity and the Spatial Web. Blockchain and related trends like NFTs, Crypto Games, Decentralized Finance, Decentralized Apps and Decentralized Autonomous Organizations (DAOs) are all examples of Web 3 coming to life. A good example of a potentially disruptive Web 3 company is Hivemapper, where drivers can earn cryptocurrency by feeding data to a crowdsourced map designed to compete with Google Maps.

Weisler:  You also speak of the Spatial Web and the Metaverse. What are those?

MacPhedran: Web 3, the Spatial Web and the Metaverse are sometimes used interchangeably. The spatial web is the ability to explore data or navigate the web beyond two dimensions, for example by exploring content through a 3D engine in your web browser, playing with AR in Pokemon GO on your iPhone, or navigating around in VR in your Meta Quest 2 headset.

The idea of the Metaverse was coined in 1992 by science fiction author Neal Stephanson in his novel Snow Crash, a dystopian cyberpunk novel where it comes to life as a perfectly spherical digital planet populated by avatars and virtual real estate accessed through VR goggles. In our world, it’s frequently used to describe virtual worlds that run on cryptocurrencies like Decentraland and The Sandbox, as well as NFT-driven communities like Bored Ape Yacht Club and creator-generated VR worlds like Meta Horizon Worlds. Ultimately, the idea is that we will be able to lead parallel lives in a persistent, explorable 3D world that encompasses all of this content interchangeably, where we have digital identities and can do more than just play and socialize, but also work and earn money.

Weisler: So let’s talk about your recent study. What are the highlights, takeaways and any surprises?

MacPhedran: The study explores the overarching trends that lead us to Web 3 and the Metaverse, but likely the most interesting for readers is the original research we conducted by polling US consumers on topics that give us a sense of how far along things are now. Some highlights:

●     The gaming industry is bigger than Hollywood and the music industries combined and it’s setting the stage for the metaverse. In the 16-34 bracket of our respondent group, games often referred to as “Metaverse precursors” had been recently played, with Minecraft (47%), Fortnite (44%), Pokemon Go (36%) and Roblox (29%) taking the lead. Crypto-games with integrated NFTs were also mentioned, including The Sandbox (10%), Axie Infinity (7%) and Decentraland (7%)

●     16.5% of respondents have their own VR device with 41% considering a purchase in the next 12 months.

●     Looking to the future, 65% are interested in purchasing AR glasses when they become more widely available as long as they’re fashionable.

●     44% of respondents have directly purchased or indirectly invested in cryptocurrency with Bitcoin (85% of buyers) and Ethereum (54% of buyers) leading the pack.

●     About half (49%) of respondents view crypto as a valid investment vehicle.

Weisler: What type of data is thrown off from Web 3.0? What can best be done with this data and how is it impacted by privacy concerns?

MacPhedran: Because the concept of Web 3 includes the idea of the ubiquitous Internet, or the Internet of Things, as well as AI, there will be far more data available tomorrow than there is today. The Verge recently published a piece around how users Amazon Alexa voice AI conversations are now leveraged in advertising targeting. The flip side is that deeply ingrained in the philosophy of Web 3 is that users will own and control their data, ultimately being the ones to profit off its usage. In the Hivemapper example, the entire business model of the company is built around users earning money for the data they create (location data, HD photography, videos, etc. used in street-level mapping). Tomorrow, the average IoT fridge with cameras might be smart enough to keep a real-time inventory of everything inside, and have the ability to replenish itself through a grocery delivery API. In Web 3, in theory, the owner will be able to choose to provide that data to 3rd parties in exchange for value, perhaps through targeted discounts or bidding to “own” replenishment for a fixed time period. How this will manifest itself in the next 5, 10, 15 years will be interesting. 

Weisler: What are the challenges with moving this forward?

MacPhedran: Likely one of the biggest challenges we will see is around decentralization. Billions have flowed into crypto and NFTs over the past few years and the crypto market cap is currently 1.8 Trillion USD. But traditional organizations have been resistant to embrace these platforms, creating a very large pool of stored value that has some trouble getting back into the market, though we are now seeing companies like theatre chain AMC accepting crypto like Bitcoin and Ethereum to buy tickets.

Weisler: What are the benefits to people with these advancements?

MacPhedran: In theory, in the long term, these changes should give the average person more control over their data, the ability to earn money from it (as well as to earn money through various digital activities like crypto gaming or digital creativity), and overall a better experience with social media, information search, commerce and entertainment. We’re already seeing how Zoom allows us to reduce our time spent commuting and on unnecessary travel, and in many ways meeting in VR takes this a level beyond. In other areas, it can bring people even closer together. Meta is rumored to be working on what is effectively a universal translator that could allow people from different countries, speaking different languages, to work and play together in 3D spaces. The number of innovations we will likely see over the next decade, and how they will impact our lives, is hard to predict. I hope that in the area of accessibility especially, that some of these tools will create a more level playing field and equitable web. Be My Eyesis an incredible example of new technology being put to good use for blind and low-vision people, as is an increasingly voice-enabled web.

However we may also see negative elements. As we continue to allow technology to be our social intermediary, through channels like Facebook or video conferences as opposed to old fashioned time together, and children increasingly grow up with tablets and digital entertainment, we collectively need to ensure that we don’t completely lose ourselves in the digital world and forget to shop at the farmers market or play in a puddle.

Weisler: Give me some predictions. What do you see three years from now in this space?

MacPhedran: In the next three years we will likely see a few new unexpected billion-dollar “unicorn” companies emerge in the space. Yuga Labs, the creators of Bored Ape Yacht Club, is already one of these companies with its $4 billion valuation. If the consumers we polled were accurately predicting their own behavior, VR devices will be a lot more widespread. Apple is rumored to be very close to releasing their first VR headset, which will push the technology further into the mainstream. Following that, we’ll see the first proper wave of consumer AR glasses, which are in development at companies like Snap and Meta, though miniaturization of all the required technologies may take longer than 3 years to create something fashionable and functional with a decent battery life. Overall I think we’ll see a lot of creativity in the space, as more tools for both creativity and monetization become available.

 

This article first appeared in www.Mediapost.com

Artwork by Charlene Weisler

Simulmedia’s Dave Morgan Talks Media

Dave Morgan, CEO and Founder of Simulmedia, is a media legend and a serial entrepreneur, who sees the value of media in prescient ways. 

His company’s latest initiative, to be announced this week, is the roll-out of the licensing of its software product called Vamos that will enable marketers to drive their own campaigns to make their TV ads to be more targeted, similar to the web. Morgan sees great disruption in the media industry over the next few years and has strong opinions about the introduction of blockchain technology to media as well as how to best approach attribution. 

I sat down with him and asked him the following questions:

Charlene Weisler: Where do you see the media challenges in the next couple of years?

Dave Morgan: I think that the challenges we will have over the next couple of years are probably the ones that we have anticipated, maybe over-anticipated, in the last decade or two. We are getting to a moment in time where the advertising and marketing industry is going to confront several really significant realities: 

One: Are marketers prepared to really make their advertising or marketing operations a profit center and not a cost center? I see the entry of really significant and smart private equity firms into the consumer brand space and the retail space. Whether that is 3G and Burger King or whether that is looking at the folks that took over PetSmart and are now buying Chewy. You will have really smart, numbers driven people who are not just about cutting costs – they are actually very smart people – but smart investment people. They are going to start at structurally changing industries, many times through smarter marketing.  And that is going to have an impact on people who just view advertising and marketing as a cost center without connecting the dots to how you actually drive profits and value and create customers. So that is one bucket. 

The other bucket is what we have always talked about and that is that silos will inevitably come apart - The idea that different media or different marketing are valued differently and measured differently. If we become more results focused, cost focused, then it is really easy to figure out what is the common currency. This is something you and I have talked about for many years – how do you build out a multi-channel currency. It is hard to build out a multi-channel currency if you are trying to equate a cost of an audit bureau circulation number for a newspaper with a BPA number for a magazine, with an ad server impression number for a banner with a YouTube number with a Facebook number with a Nielsen Arbitron number for radio and a Nielsen C3 or C7 or C30 for TV and a comScore / Rentrak number for a secondary currency. That is hard to pull them together and equate them at the commodity level, which everybody does. But if you focus only on the output, sales or exactly how many people did I reach (which is also sales), that is really all that matters. We are on the cusp of bringing all research together – experimental design and scientific method – all of that is going to come together and that will probably be the most disruptive thing in our industry.

Weisler: How will blockchain technology impact media?

Morgan: It’s a big question. It’s like saying ‘How will electricity impact media?’ Blockchain is the core building block technology. Most people know it today because it powers bitcoin which creates a lot of preconceptions and maybe controversy. But fundamentally it is a transparent, de-centralized ledger system that lets you take what would have otherwise been a spreadsheet or a ledger and be able to share it with thousands, tens of thousands of different processors to be able to solve some computing tasks. And the ones that tend to work best are very hard to compute. But very easy to verify. In the bitcoin world it verifies what you have in the bank, in your wallet, and in the advertising world it will be one of the ways to verify ad delivery. It is a very interesting way to attack things like viewability and fraud because if you could never afford to look at all of the internet protocol addresses of all impression deliveries at the browser level across every supplier.  It is highly de-centralized, really efficient and verified against every other point.

Weisler: As well as being privacy compliant and secure as in bitcoin.

Morgan: Right, privacy compliant so you can put out the data anonymized. Now, it is transparent as to its result but it can be anonymized as to its consumer source.

Weisler: I consider attribution to be a very big challenge. Where do you see the perfection of attribution?

Morgan: I say that attribution is in the eye of the beholder. It is going to be determined by the marketer, not by the people who are selling the service. Sure, they will apply their own data as they think it will help in attribution but it is going to be determined by those that sell things. It will always be an imperfect science but it is becoming a better and better science. And science doesn’t just mean focus groups. Science really means being able to understand the multivariate impact. Of different commercial communication and determining what actually impacts sales. And it not just about classic last click, last exposure but it is really understanding what are those critical heavy swing purchasers and understanding category buyers and understanding the impact on them. And this will be done in a very proprietary way.

This article was first appeared in www.MediaVillage.com