Use of the Metaverse, NFTs Decline as Interest in AI Grows

As economic uncertainty looms in the coming year, marketers and agency leaders may be adjusting technology priorities after a year of ups and downs. After all, 2022 started with new tech like metaverse activations, nonfungible tokens (NFTs) and cryptocurrencies at the height of their hype. But the popularity of those trends soon began to teeter amid high-profile setbacks such as digital exchange FTX's implosion, investors souring on Meta's virtual world ambitions and general Silicon Valley malaise brought on by rising federal interest rates and inflation. Meanwhile, recent research advances have pushed generative artificial intelligence to a new frontier that is set to unlock more automation and creative augmentation in the coming year as capabilities to generate realistic copy and imagery start to have practical implications for creative fields. With that backdrop, some experts think 2023 could be a year in which marketers rein in experimentation and zero in on how new technologies can directly grow their bottom lines and achieve practical goals for the business. "2022 was all about escapism in a way. … We were kind of trying to find a new playground for all of us to play with something and get excited about it," said Elav Horwitz, McCann Worldgroup's svp of global innovation and creative partnerships director. "But I think 2023 is going to be more about realism and solving real issues." A metaverse and NFT winter With a true far-reaching metaverse still long from being a reality and NFT sales dipping precipitously, market research firm Forrester is predicting a cooling-off period for those technologies in 2023. Analysts said in a report that the metaverse has yet to see its "Pokémon Go moment," the catch-fire fad that could propel it into the mainstream in the same way the mobile game did for augmented reality in 2016. And with marketing budgets shrinking, that inflection point is unlikely to come soon. "This could all change if brands go bold in creating hybrid physical digital experiences, but we don't see that on the table for 2023," said Forrester analyst Mike Proulx. "Economic instability will result in slashed innovation budgets that will diminish brands' capacity to take the big and risky swings." Mark Curtis, head of innovation at Accenture Song and co-lead of the metaverse continuum business group, said that while he is still bullish on the long-term potential of the metaverse to transform how people interact on the internet, a lack of AR and VR infrastructure necessary for consumers to fully immerse themselves in virtual worlds is holding back the technology for the time being. "The pace of growth of the metaverse is going to be deeply responsive to hype cycles, which will go up and down," Curtis said. "My best guess right now is we're either at the bottom of one or on the downward slide toward the bottom of one." Though cryptocurrencies and NFT investment have suffered reputational damage from high-profile crashes like FTX's bankruptcy, Curtis still sees digital tokens as a useful tool for brands managing loyalty programs outside of more speculative uses, a view shared by many marketers who are sticking with the technology. What Marketers Say Deloitte’s CMO survey late last year captured execs’ attitudes toward technology and shifting budgets. Marketers currently report using AI and machine learning for around 8.6% of their work, but that number is expected to climb to 22.9% in the next three years.Marketers mostly report using blockchain close to “not at all”—an average of 1.4 on a seven-point scale where seven is “regularly.” That number has remained consistent from February 2020.After months of growth during the Covid-19 pandemic, CMOs expect digital marketing budget growth to slow in the next year from a growth rate of around 15% down to 10.1%. AI adoption growth Meanwhile, the adoption of artificial intelligence and machine learning has grown among executives to the point where 8.6% of executives in Deloitte's most recent CMO survey reported the technology as playing a significant role in optimizing marketing budgets. The firm expects that proportion to grow to 22.9% over the course of the next three years as tools like deep learning analytics allow marketers to squeeze more out of limited budgets. And on the more cutting-edge end of the technology, tools like realistic image generators and copy-producing chatbots are changing AI's creative capabilities at an accelerating pace. While these breakthroughs are still very recent, Curtis said the pace of change in the field means agencies and marketers should already be scrambling to see how these tools can augment their creative and production processes. "For me, this is one of the most important trends we've written about in the last five years, 10 years, maybe," Curtis said. "The things that agencies should be doing is beyond experimenting with this. They should be calculating now what it means for their business. We are already beyond the experimental zone."

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Marketers Could Reshuffle Priorities as Emerging Tech Hype Shifts

Metaverse experiences and NFTs are in decline, while AI continues to grow

Patrick Kulp

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Patrick Kulp