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<Img
img="/uploads/cgi_c0fe75f0a0.png"
alt="CGI: What It Is and How to Apply It in Advertising"
/>

Marketing has long embraced technology. The IT industry has streamlined marketers' work with information gathering and analysis, while neural networks automate and expedite content creation. The advertising world has also adopted CGI from the film industry, where this technology brings non-existent worlds and fantastical characters to life, defying the laws of physics.

Thanks to computer-generated imagery (CGI), brand videos feature vibrant characters and gigantic objects on the streets of real cities.

This article will explain what CGI is, why it's used in marketing, and showcase examples that have left a lasting impression.

## What is CGI Graphics

CGI (Computer-Generated Imagery) is the creation of realistic or animated models of locations, objects, and people. Typically, these are 3D and 2D objects used in renders, videos, AR, and VR technologies. For a long time, CGI has been a part of the film industry, creating new worlds on screen, fantastical characters, or simply enhancing captured frames. Some films are nearly entirely made using CGI, such as "Life of Pi," which received Oscar nominations for its effects. CGI has opened up possibilities for writing any script, even the most implausible in reality.

The first film with computer effects was Alfred Hitchcock's "Vertigo" (1958), where animation appeared in the titles. The integration of graphics and shooting was first achieved in the 1973 film "Westworld." Since then, the technology has evolved, bringing increasingly realistic worlds to the screen. Films like "Star Wars," "The Matrix," "Jurassic Park," "The Lord of the Rings," "Avatar," and Marvel movies wouldn't have been possible without CGI graphics.

By the way, to seamlessly blend real objects with digitally created frames, filmmakers often use a single-color background, typically green or blue, a technique known as "chroma keying."

<Img
img="/uploads/endgame_movie_was_filmed_on_a_chroma_key_cd15253db6.png"
alt="Avengers: Endgame movie was filmed on a chroma key"
src="The massive battle of Avengers: Endgame movie was filmed on a chroma key"
/>

Gradually, other industries embraced the technology as well: interior design, development for modeling future homes and spaces, computer games. Of course, mass media channels adopted CGI too.

## CGI Graphics in Advertising

The nearly limitless visualization possibilities make CGI appealing for marketing. CGI advertising is widely used today, showcasing products and telling brand character stories in both 3D and 2D videos. For instance, the first CGI M&M's video debuted in 1995, and since then, [**clips featuring the red and yellow candies**](https://www.youtube.com/watch?app=desktop&v=utAw2j0khNk) and others have appeared for many years, with catchphrases even entering popular culture. This happened with the [**Christmas ad**](https://altcraft.com/blog/new-years-marketing) "He does exist! They do exist!"

<Img
img="/uploads/mms_christmas_advertising_video_d89bd30f7d.jpg"
alt="M&M's Christmas advertising video"
/>

## Why marketers use CGI design

**WOW factor and brand recognition.** CGI graphics allow the realization of any creative idea, increasing the chances of capturing audience attention and evoking emotions. Marketing campaigns with CGI videos garner millions of views, make headlines, and stimulate discussions, expanding brand audiences and enhancing recognition.

**Realistic product demonstration.** Particularly useful for products that don't exist yet. CGI can bring to life a future residential complex, strengthening [**marketing promotion channels**](https://altcraft.com/en/features/omni-channel-marketing). The visual representation of a product is the first thing users notice in the digital environment.

**Budget savings.** While CGI creation can be costly, in some cases, it's more economical than live shooting. It eliminates the need to assemble a large team for on-location shoots, providing the flexibility to create backgrounds digitally and film people in a studio.

**Ethical considerations.** High-quality CGI design is realistic enough to replace people and animals in a frame, sparing them from the potential discomfort of real filming. Representing animals like dogs, cats, tigers, bears digitally can be indistinguishable from real footage, avoiding stress for the animals and preventing brand audience backlash.

## How CGI advertising is created

Typically, a whole team collaborates on a CGI project, including animators, artists, 3D modelers, visualization experts, motion designers, CGI illustrators, and other specialists.

### Stages of CGI creation

To produce a CGI video, several stages need to be completed.

<Table>
| Stages | Description |
| ------ | ------ |
| Script writing | The first stage is coming up with an idea, which is turned into a frame-by-frame script. |
| Modeling | A model of an object is created that looks like a geometric figure with many faces. |
| Texture refinement | Textures are drawn on the object that they would have if they were real. |
| Working out the details (rigging) | Work out the light and shadows in the image to bring their appearance closer to more realistic ones. |
| Final assembly (compositing) | All created layers are merged and the final clip appears. |
</Table>

## CGI clips in advertising: examples

The most impactful and WOW-worthy advertising created with CGI often involves the appearance of impossible or challenging-to-implement objects in the real world. Such advertisements often leave viewers questioning whether [**video graphics**](https://altcraft.com/blog/video-marketing-for-brand-promotion) were used or if the brand actually crafted a gigantic installation.

### Jacquemus

In the spring of 2023, the Jacquemus brand had [**Bambino design handbags**](https://youtu.be/mnDNAv9HBSM?si=qAojI5fMm-VLnLt-) roam the streets of Paris instead of trams. The video turned out highly realistic and went viral. Global publications covered this advertisement, adding popularity to the company and the bag itself.

<Img
img="/uploads/viral_video_with_bambino_bag_by_jacquemus_89bbd72d46.png"
alt="Viral video with Bambino bag by Jacquemus"
/>

But the brand didn't stop there; in December, they released [**a series of CGI videos**](https://t.me/smmrus/10261) promoting the opening of stores in the mountain resort of Courchevel. The Jacquemus logo appears on ski lift cabins, on a snowboard carried by a diver, and even a Christmas tree with human legs skiing down the mountain.

<Gallery>
<GalleryItem
original="/uploads/courchevel_jacquemus_0c53329bb2.png"
thumbnail="/uploads/courchevel_jacquemus_0c53329bb2.png"
/>
<GalleryItem
original="/uploads/snowboard_carried_by_a_diver_ee400c6d13.png"
thumbnail="/uploads/snowboard_carried_by_a_diver_ee400c6d13.png"
/>
<GalleryItem
original="/uploads/ski_lift_cabins_jacquemus_6524b70175.png"
thumbnail="/uploads/ski_lift_cabins_jacquemus_6524b70175.png"
/>
<GalleryItem
original="/uploads/mountain_resort_of_courchevel_b6354e246d.png"
thumbnail="/uploads/mountain_resort_of_courchevel_b6354e246d.png"
/>
<GalleryItem
original="/uploads/christmas_tree_with_human_legs_77bb0466f2.png"
thumbnail="/uploads/christmas_tree_with_human_legs_77bb0466f2.png"
/>
</Gallery>

### Maybelline

Maybelline launched a CGI advertisement for mascara. A famous double-decker red bus with eyelashes [**drove through the streets of London**](https://youtu.be/zyaKUXOkeng?si=1ZYl6gG9SoJvia4r), and a giant brush attached to a building combed the lashes. Lashes also appeared on the subway train.

<Gallery>
<GalleryItem
original="/uploads/cgi_advertisement_for_mascara_eececbb809.png"
thumbnail="/uploads/cgi_advertisement_for_mascara_eececbb809.png"
/>
<GalleryItem
original="/uploads/maybelline_mascara_08eab67150.png"
thumbnail="/uploads/maybelline_mascara_08eab67150.png"
/>
</Gallery>


### Barbie

The advertising campaign for the movie "Barbie" was complemented by [**a giant doll coming out of its box**](https://www.youtube.com/watch?v=HNjqq8FJiVw) in Dubai near the Burj Khalifa skyscraper. Although the film featured many real locations, this appearance of Barbie only intensified interest in the project.

<Img
img="/uploads/advertising_campaign_for_the_movie_barbie_2132e2c4f5.png"
alt="Giant Barbie doll coming out of its box in Dubai"
/>

### L'Oreal

Another well-known cosmetic brand [**created road markings**](https://youtube.com/shorts/d5qAC300swc?si=bsSu-bSZ-n5XHwX1) in Paris using a retro car carrying red lipstick on its roof.

<Gallery>
<GalleryItem
original="/uploads/retro_car_carrying_red_lipstick_96c1fa280a.png"
thumbnail="/uploads/retro_car_carrying_red_lipstick_96c1fa280a.png"
/>
<GalleryItem
original="/uploads/retro_car_loreal_ffaa111acb.png"
thumbnail="/uploads/retro_car_loreal_ffaa111acb.png"
/>
</Gallery>

[**The advertisement for the brand's cream**](https://youtube.com/shorts/P0n-Ky029hA?si=GgJ2S0BJKnZFOgIX) became even more impactful as it showed a statue of Liberty holding and applying the cream to her face. Interestingly, before using L'Oreal's product, the main symbol of the USA has pimples, and they instantly disappear afterward.

<Gallery>
<GalleryItem
original="/uploads/the_advertisement_for_the_brands_cream_4b78dfe2d8.png"
thumbnail="/uploads/the_advertisement_for_the_brands_cream_4b78dfe2d8.png"
/>
<GalleryItem
original="/uploads/statue_of_liberty_with_cream_5f95769610.png"
thumbnail="/uploads/statue_of_liberty_with_cream_5f95769610.png"
/>
</Gallery>

### Rebranding of M.Video


The branding agency Linii vividly and effectively showcased the new logo for the "M.Video" company. The new three-dimensional brand symbol [**flies over the river**](https://www.instagram.com/reel/C0gxEDSCtdl/?igshid=MzRlODBiNWFlZA==) in Moscow with a helicopter. People passing by appear to be capturing it as if taking a photo.

<Gallery>
<GalleryItem
original="/uploads/new_logo_for_the_mvideo_company_7ae5be0509.png"
thumbnail="/uploads/new_logo_for_the_mvideo_company_7ae5be0509.png"
/>
<GalleryItem
original="/uploads/new_three_dimensional_brand_symbol_03c950ca42.png"
thumbnail="/uploads/new_three_dimensional_brand_symbol_03c950ca42.png"
/>
</Gallery>

### DOM.RU

A giant robot [**flies**](https://vk.com/wall-42949290_10438581?w=wall-42949290_10438581) around Samara and other cities, installing routers on buildings in an advertisement for the internet provider. The storyline of the video is presented as a live broadcast, adding realism to the CGI-created content.

<Gallery>
<GalleryItem
original="/uploads/giant_robot_7704d35728.png"
thumbnail="/uploads/giant_robot_7704d35728.png"
/>
<GalleryItem
original="/uploads/robot_in_domru_c62a15e1ac.png"
thumbnail="/uploads/robot_in_domru_c62a15e1ac.png"
/>
</Gallery>

### Sberbank

In 2021, [**a video featuring Gena and Cheburashka**](https://youtu.be/KX-3xPPyzzc?si=MarlTFDgc0lVh-Zl) waving to passersby from a screen in "Moscow City" was released. They then exceed the boundaries of the screen. The video goes on to highlight the products of the Sberbank ecosystem.

<Img
img="/uploads/sberbank_ecosystem_234e64f560.png"
alt="CGI ad by Sberbank"
/>

### Coca Cola

In the Coca Cola commercial, [**artworks come to life**](https://youtu.be/VGa1imApfdg?si=e9we83qeSOb1AEhp) in a museum, and visitors walk around. Of course, this happens to pass the iconic bottle of soda to each other. The actions of the exhibits remain unnoticed by people in the hall.

<Gallery>
<GalleryItem
original="/uploads/coca_cola_commercial_391bb97b81.png"
thumbnail="/uploads/coca_cola_commercial_391bb97b81.png"
/>
<GalleryItem
original="/uploads/coca_cola_artwork_9e8bf161ce.png"
thumbnail="/uploads/coca_cola_artwork_9e8bf161ce.png"
/>
<GalleryItem
original="/uploads/museum_advertising_coca_cola_ef0a168e56.png"
thumbnail="/uploads/museum_advertising_coca_cola_ef0a168e56.png"
/>
</Gallery>

### Balenciaga

The brand Balenciaga, in collaboration with Fortnite, has created a digital clothing collection. Characters from the online game serve as models [**on 3D billboards**](https://www.youtube.com/watch?time_continue=14&v=2lXwSJVlcwc&embeds_widget_referrer=https%3A%2F%2Foohmag.ru%2F2021%2F09%2F22%2Fbrend-sozdal-svoj-sobstvennyj-czifrovoj-mir-mody%2F&embeds_referring_euri=https%3A%2F%2Foohmag.ru%2F&embeds_referring_origin=https%3A%2F%2Foohmag.ru&feature=emb_yt_watermark). For instance, the Doggo skin is dressed in the brand's clothing.

<Img
img="/uploads/balenciaga_fortnite_collaboration_330e36a8ba.png"
alt="CGI powered  Balenciaga & Fortnite collaboration"
/>

### Pokemon Go

[**The Pokémon Go advertisement**](https://youtu.be/appsZyaDLn0?si=W6MgjBtAjhaobBBx) also appeared on a curved screen measuring 154 square meters in Tokyo. Popular game characters appear one by one, engaging in a short storyline. Objects seem to scatter beyond the screen borders.

<Img
img="/uploads/pokemon_go_cgi_b457811556.png"
alt="Pokemon Go CGI powered advertisement"
/>

### Alexander Wang Underwear

[**The video featuring a giant bra**](https://www.youtube.com/watch?v=-_Q93WbF1_k) hanging from a bridge in New York seems incredibly realistic. However, it's once again CGI, part of the advertising campaign for the Alexander Wang Underwear brand. Passing cars interact with the installation, creating doubt about its unrealness.

<Img
img="/uploads/giant_bra_4c94b9a605.png"
alt="A giant Alexander Wang Underwear bra above the bridge in New York"
/>

### Poison Drop

[**The jewelry brand Poison Drop**](https://www.instagram.com/reel/C00-oWFN6aH/?igshid=MzRlODBiNWFlZA==) announced the opening of a new store near Patriarch Ponds in Moscow with a CGI video on their Instagram* account. Initially, giant silver droplets appear on the street, dissolve, and then the Poison Drop sign descends on the building. The video includes moving cars and street noise for added realism.

<Gallery>
<GalleryItem
original="/uploads/poison_drop_66a9bc7e9d.png"
thumbnail="/uploads/poison_drop_66a9bc7e9d.png"
/>
<GalleryItem
original="/uploads/cgi_video_poison_drop_cf52bceedc.png"
thumbnail="/uploads/cgi_video_poison_drop_cf52bceedc.png"
/>
</Gallery>

## Summary

CGI (Computer-Generated Imagery) is a computer graphics technology for creating realistic objects and characters in video format. It can depict either an entirely digitally created world or individual non-existent elements in the real world. CGI has been utilized in the film industry for many years, and marketers have adopted this technology for advertising purposes.

These videos often evoke a WOW effect, realistically showcase products, and save costs compared to traditional filming, especially in challenging conditions with large production teams. Marketing strategies incorporating CGI provide an ethical means of content creation without using animals.

Specialized teams of CGI experts handle the creation of CGI advertisements, going through stages such as scriptwriting, modeling, texturing, lighting, detailing, and compositing.

* *Meta is a product of the company recognized as an extremist organization in Russia.*


CGI is a graphics technology for creating realistic objects and characters in videos in a fully digital world or as non-existent elements in the real world.

cgi.png

About what CGI is, why to use this technology in marketing and show examples that have produced a WOW effect.

CGI, Definition, Examples & How to Apply It in Advertising

CGI: What It Is and How to Apply It in Advertising

<Img
img="/uploads/neural_networks_8668b76426.png"
alt="Neural Network Hallucination, Types, Causes, Mitigation"
/>

Almost every day, there are news reports about the achievements of neural networks. ChatGPT, Midjourney, and others are highly popular and frequently searched on Google Trends. It may seem like neural networks can already do everything, and humans should prepare for unemployment in the near future.

Machines indeed solve many problems, but their "brains" are not perfect yet. Creativity is entirely beyond the reach of robots. Frequent hallucinations in artificial intelligence make it an unreliable replacement for humans, especially in fields where human safety and health are at stake.

Let's explore why and how neural networks make mistakes and how to reduce their hallucinations at the user level.

## How neural networks make mistakes and why

### Opacity of results

It's impossible to explain the underlying principles by which a neural network generates a specific result. Although we understand [**the principles of its operation**](https://altcraft.com/blog/neural-networks-in-business-marketing-and-life), the "thought process" of a robot remains a black box. For example, you show an image of a car to a neural network, and it insists it's a flower. Asking why it arrived at that result is futile.

While such errors might be amusing for an average user, the unpredictability can have unpleasant consequences for business processes.

This lack of transparency can pose a problem for any business that aims to communicate openly with customers, explaining reasons for rejections and other company actions. Social media and various platforms that rely solely on automated moderation are particularly at risk.

For example, in 2021, Facebook's* artificial intelligence (using neural networks as its data processing method) removed user posts featuring historical photos of a Soviet soldier with the Victory Banner over the Reichstag. The neural network deemed it a violation of community rules. The company later apologized and explained that, due to the pandemic, many content moderators were not working, leading to the use of automated checks that resulted in such errors.

Similar issues in AI moderation were reported on YouTube. During the pandemic, neural networks became overly zealous, removing twice as many videos for inappropriate content as usual (eleven million). Of these, 320 thousand were appealed and reinstated. Thus, the digital world still relies on human intervention to address these challenges.

### Discrimination by neural networks

Sometimes, artificial neural networks exhibit unfair behavior towards individuals of a certain nationality, gender, or race, especially in the fields of business and law enforcement.

In 2014, [**Amazon's AI**](https://www.reuters.com/article/us-amazon-com-jobs-automation-insight-idUSKCN1MK08G) assessed responses to job descriptions and consistently assigned lower scores to female candidates. As a result, female applicants were more frequently denied employment, despite the absence of objective reasons for such rejections.

In the United States, facial recognition systems have been known [**to incorrectly identify**](https://gizmodo.com/detroit-police-chief-admits-face-recognition-doesnt-wor-1844209113) a significant percentage of African Americans, leading to unjust arrests.

### Need for large volumes of data

The need for large volumes of data is a significant challenge for neural networks. They are data-hungry and require vast amounts of information for training, sometimes even personal data. Collecting and storing such data is neither straightforward nor cost-effective. When neural networks lack sufficient data for training, they tend to make errors.

For example, in 2022, drivers of right-hand drive vehicles [**started receiving fines**](https://lenta.ru/news/2022/05/23/shtrafy/) due to AI. The neural network couldn't distinguish between a person sitting in the seat and an empty seat, leading to fines for not wearing seat belts. Developers attributed this problem to data insufficiency. They explained that the AI needed a substantial amount of right-hand drive vehicle data to avoid errors. However, this doesn't guarantee accuracy, as AI can be confused by glares and reflections on cameras.

Sometimes, these cases can be comical. For instance, Tesla's autopilot system [**failed to recognize**](https://korzik.net/video/133351-tesla-mozhet-ponjat.html) a rare form of transportation – a horse-drawn carriage on the road. On other occasions, neural network glitches can be quite alarming. There have been instances where [**Tesla's system detected**](https://motor.ru/news/tesla-fail-13-01-2021.htm) a person in an empty cemetery, causing panic among drivers.

### Lack of definitive answers

Neural networks can sometimes struggle with tasks that a five-year-old child can easily handle, like distinguishing between a circle and a square. A child would accurately point out where the square is and where the circle is. In contrast, a neural network might say it's a circle with 95% confidence and 5% confidence that it's a square.

### Risk of hacking and deception of neural networks

Neural networks are susceptible to hacking just like any other systems. Hacking a network is almost like a scene from science fiction where the villain forces robots to go haywire. Indeed, knowing the weaknesses of a neural network allows manipulation of its operations. For instance, a car's autopilot might start running red lights instead of stopping for green.

In an experiment, researchers from Israel and Japan attempted [**to deceive a facial recognition neural network**](https://arxiv.org/abs/2109.06467) using minimal makeup, significantly reducing its accuracy. Prior to this, the network would malfunction in the presence of camouflage, glasses, or bright elements in the frame, but such disguises were highly noticeable. Therefore, this artificial hallucination was crucial to test whether simple makeup could confuse an AI, which was also developed using a neural network. However, poorly thought-out makeup did not induce any significant recognition errors.

In another demonstration, researchers from Toronto illustrated [**how a neural network could be hacked**](https://arxiv.org/abs/2106.09898) using simple symbols that are imperceptible to the user.

[**Since 2013, a vulnerability in neural networks has been identified**](https://arxiv.org/abs/1312.6199) – the adversarial attack, where a tiny amount of noise is added to an image. This causes the network to misidentify objects in the image, such as labeling a table as a car or a tree as a supermarket trolley. Even after a decade, there is no absolute solution to this problem.

### The complexity of neural networks

Like any complex system, neural networks are imperfect. They learn quickly and can process vast amounts of data, but they lack a complete analogue to human critical thinking. Although a neural network can challenge information and understand its mistakes, sometimes it simply "believes" in incorrect things and confuses facts, leading to the creation of its own fabrications. This tendency is especially pronounced when the initial information is derived from unreliable sources.

The complexity of neural networks and their aspiration to emulate human intelligence raise concerns in society. In March 2023, Elon Musk, the founder of Tesla and SpaceX, [**published a letter**](https://futureoflife.org/open-letter/pause-giant-ai-experiments/) requesting a six-month halt to the training of neural systems more advanced than the GPT-4 version. Over 1,000 specialists, including Evan Sharp, the founder of Pinterest, and Steve Wozniak, the co-founder of Apple, endorsed this statement. The number of signatures has now exceeded 3,000.

### Superficial assessment of information

When it comes to generating text, a neural network doesn't think metaphorically like a human; it merely uses statistics based on word usage and phrases. The system, in a way, predicts the continuation. It doesn't have the capability to conduct a deep analysis and find causal relationships in the text.

### Lack of uniqueness in results

Although a neural network is designed to generate new content based on a multitude of examples, there are instances where the robot might simply [**produce a slightly modified image**](https://arxiv.org/pdf/2301.13188.pdf) from its training data. In such hallucination scenarios, personal user data could inadvertently be included in images accessible to outsiders.

A probable cause for this error is attributed to the repetition of certain images in the training data.

### Neural networks do not understand human anatomy well

Often, images generated by various neural networks show extra or distorted fingers, additional hands, legs, or missing body parts, strange shapes for teeth, tongues, eyes, and more.

Neural networks particularly struggle with fingers, which may resemble animal paws more than human hands, and they often make errors in counting them. This is because the network processes images of people from various angles but lacks a deep understanding of how to anatomically position body parts like fingers, eyes, teeth, and so on, resulting in these kinds of images.

<Img
img="/uploads/Neuralnetworkhallucination_6e202446c3.jpg"
alt="Neural network hallucination problems with counting fingers"
src="When hallucinating, a neural network can generate a person with three fingers on their hand"
/>

<Img
img="/uploads/Neuralnetworkhallucination2_ab230210cb.jpg"
alt="Neural network hallucination produce pictures with strange eyes"
src="Generated image from several user photos that produced strange eyes"
/>

<Img
img="/uploads/Neuralnetworkhallucination3_0e192733c6.jpg"
alt="Neural network hallucination produce pictures with strange hands"
src="This photo is fine at a glance, but look at the hands"
/>

<Img
img="/uploads/anatomy_c566e22a74.jpg"
alt="Neural network hallucination produce pictures of knights with strange anatomy"
src="Here the neural network drew on-demand knights that turned out to have no eyes, not enough hands, and some don't even have feet"
/>

<Img
img="/uploads/creepycreation_b1c21b44b1.jpg"
alt="Neural network hallucination produce pictures with strange anatomy"
src="Sometimes the pictures generated by the neural network look kind of creepy. Like, for example, the kind of gnarled teeth that the monsters have."
/>

### Neural networks simply go mad


American researchers have found that [**certain neural networks**](https://altcraft.com/blog/what-distinguishes-chatgpt-bard-and-bing-in-the-world-of-marketing), such as ChatGPT and Midjourney, [**start hallucinating significantly**](https://petapixel.com/2023/08/11/ai-trained-on-ai-images-produces-terrible-results-study-finds/) after undergoing five training cycles. There's even a term for this phenomenon called Model Autophagy Disorder (MAD), where the results deteriorate with each new cycle of multiple training sessions.

Neural networks can sometimes be unpredictable. For example, in response to the query "Who was the sole survivor of the Titanic?" the neural network confidently provided the name of the supposed "sole" survivor and even shared some details about their life.


<Img
img="/uploads/wronganswerfromneural_84622eff6c.png"
alt="ChatGPT hallucinating"
/>


It's interesting to note that the neural network, when asked for sources in the subsequent query, promptly apologized for any misinformation and provided the correct information: that there were 705 survivors out of a total of 2224 passengers on the Titanic.


<Img
img="/uploads/correction_9404fb277d.png"
alt="ChatGPT corrects itself after hallucinating"
/>


Autonomous behavior was noticed in the MY AI chatbot from Snapchat, which once [**posted**](https://www.independent.co.uk/tech/snapchat-twitter-b2394029.html) an unclear photo in its stories. Users were alarmed by such behavior, and some even began to uninstall the app. Interestingly, initially, MY AI did not have the capability to create stories as part of its functionality. Hence, a small machine uprising occurred.

## Avoiding neural network hallucinations

Neural network developers are aware of these issues and are exploring solutions. For instance, [**OpenAI**](https://www.ixbt.com/news/2023/06/02/v-openai-pridumali-sredstvo-ot-galljucinacij-u-nejrosetej.html) has proposed a new method to combat hallucination. The idea is to reward the AI specifically for correct answers, not just any final outcome, encouraging the network to better verify facts. However, the problem is likely to remain relevant for a long time, as research is ongoing.

Despite these challenges, people continue to use neural networks and encounter difficulties. While the average user may not delve into the code, certain actions can improve AI outcomes.

**How to use neural networks to minimize hallucinations:**

**1. Be specific in your queries:** Avoid abstract tasks and provide clear, specific instructions. For example, instead of saying, "Write a text about fashion in 2023," say, "Write a text about fashion trends for the spring-fall season of 2023."

Paul McCartney reportedly used a method involving AI to collaborate on a song with John Lennon, who had long passed away. The same algorithm [**was applied**](https://www.cnet.com/tech/the-new-beatles-video-and-how-ai-is-helping-and-hindering-the-music-industry/) earlier in creating the documentary series "Get Back" about the legendary Beatles. Using neural networks with precise commands, they managed to separate Lennon's voice from the instrumental sounds.

**2. Provide more information:** Neural networks have vast knowledge from their training data, but understanding your request without context can be challenging. Explain your query in detail. For instance, if you expect a text about the Joker character in a Batman movie, specify that you mean "The Dark Knight" from 2008.

**3. Fact-check:** Verify the information provided by the neural network and point out errors if any.

For instance, in earlier versions of ChatGPT, it could be easily confused by questions containing deliberately unreal information:

<Img
img="/uploads/question_397bef3789.png"
alt="Neural network hallucinates, real example"
/>

The neural network confidently provides an answer even without understanding that a person cannot walk on water.

## Summary


Despite the high expectations for neural networks, they are far from perfect. Robots often make mistakes, providing incorrect information, generating strange images, misidentifying objects, and more. AI is also sometimes accused of discrimination and generating content that is not entirely original but slightly altered. In other words, they cannot operate without human supervision and corrections.

Hallucinations in neural networks occur due to the complexity of the system, the large volumes of data that need to be processed (and their insufficiency). The reasons behind decision-making are unclear, definitive answers are not always provided, and responses are often probabilistic. Additionally, neural networks are vulnerable to hacking, and they can sometimes go haywire due to frequent retraining.

To mitigate these issues, it is essential to provide clear and context-rich input to the neural network and always verify the results for accuracy.

**Facebook and other products by Meta are considered to be extremist and are forbidden in the Russian Federation.*


Neural networks may hallucinate, producing convincing but false outputs, raising concerns about the reliability of AI-generated information.

neural networks.png

Neural networks may hallucinate and produce convincing but false outputs. This leads to concerns about the reliability of AI-generated content.

Neural Network Hallucinations: Types, Causes, Mitigation

Neural Network Hallucinations: Types, Causes, and Mitigation

<Img
img="/uploads/nejroseti_8b681ef75d.png"
alt="Neural Networks in Business, Marketing and Life"
/> 

The technology market is growing: if in 2020 [**it was worth $14 billion**](https://www.alliedmarketresearch.com/neural-network-market), then by 2030, according to [**forecasts**](https://www.alliedmarketresearch.com/neural-network-market), the volume will reach $152 billion. Therefore, we will hear more and more about neural networks in the news.

Now it's part of our everyday life. Neural networks draw, generate texts, calculate complex data needed for decision-making in business, marketing, and daily life.

In this article, we will explain what neural networks are, how they work, and what benefits they bring.

## What are neural networks

Neural networks are data processing systems (software code) that simulate the workings of the human brain: digital neurons are connected to each other by virtual synapses, through which information is transmitted. Neural networks belong to the field of machine learning and artificial intelligence.

Due to their similarity to the human brain, artificial neural networks are capable of analyzing, memorizing, and even reproducing data. The first such system appeared in 1958, thanks to neurophysiologist Frank Rosenblatt. At that time, a simple neural network (a mathematical model) could simulate the perception of machine information, similar to how the brain does it.

The future of neural networks turned out to be promising: today they are used in people's everyday lives. For example, users can generate unique avatars from their images for social networks in just a few minutes. To get such a photo from neural networks, it is enough to install an application.

## How neural networks work: basic principles

Neural network technologies mimic the workings of the human brain, where electronic impulses are transmitted from one neuron to another. In the artificial version, neurons are represented by software nodes that obey set algorithms and transmit signals from one to another through synapses.

### What is important for the system to work:

- Prepare the input data to train the neural network. Without information, nothing can be created or recognized. Therefore, the answer to the question of how to create a neural network is to first gather data. To train, you need many examples so that the system can understand patterns.


*For example, if the task of the neural network is to learn to distinguish between handwritten "A" and "B", you need to load hundreds or thousands of files with images of letters.*


- Training a neural network involves human participation. In one scenario, a specialist selects the necessary data and uploads it to the system, which then analyzes it on its own. In another scenario, a human sets algorithms and corrects the robot's mistakes.


*For example, having  analyzed handwritten "A" and "B", the system produced a numerical value as a result (the task was to find "B"). The higher the number, the more confident the neural network is that this option is correct. The humans know the answer, and if there is an error, they adjust the parameters in the system and give the command to recalculate everything.*


### What happens inside a neural network

A basic neural network consists of three layers:

- **Input layer** receives information from the external world. Here, the data is analyzed, distributed, and passed on to the next layer.
<p>

- **Hidden layer** (one or several) is responsible for processing the information from the first layer and other hidden layers. Specific features are extracted.
<p>

- **Output layer** gives the final result.

<Img
img="/uploads/image5_7765d2c4b9.png"
alt="Layers of NN"
/>

This is a simplified description, as the structure of neural networks is much more complex.

## Classification of neural networks

Types of neural networks are distinguished by their structure, tasks, and subject matter. There are many classifications, but the most common ones are as follows:

<Table>
| Classification | Description |
| ------ | ------ |
| Convolutional | Recognize objects in photos and videos, classify images, and determine languages. |
| Recurrent | Work with information that changes over time. Can make predictions. Such neural networks are used in bots that communicate with humans. |
| Generative | Create images and texts on their own based on data. |
| Perceptrons | Work with complex calculations. |
</Table>

## Why neural networks are required

The application of neural networks covers various spheres of human life.

**Forecasting** is used in finance, industry, and in the operation of human life support systems. *For example, a system can calculate the load on power grids during a certain period of time.*


**A neural network for marketing** works in recommendation lists: it analyzes online user behavior and provides offers that they will definitely like. Such [**personalization**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters) increases sales.

**Facial and image recognition** is important for finding the necessary information and ensuring security. *For example, if the system finds images that are not allowed for publication on an online resource, it immediately removes them.*

**In medicine**, a neural network analyzes images of similar diagnoses and quickly provides a result.

**The ability to compare and classify** is useful for quality control of products. Thus, a neural network for businesses eliminates human error and speeds up work.

**Recognition of spoken and written speech** improves communication channels. Neural networks work in voice assistants, transcription, and analyze comments on the internet.

Artificial neural networks excel in **creative fields** because they can create unique art. However, some artists do not appreciate robots behaving this way.

Drawings generated by neural networks have caused controversy and even legal precedents. *Several artists [**have sued**](https://www.polygon.com/23558946/ai-art-lawsuit-stability-stable-diffusion-deviantart-midjourney) image generation services Midjourney and Stable Diffusion, as well as the creative platform DeviantArt, which uses its own neural network called DreamUp. The plaintiffs argue that copyright is being violated because thousands of images from the internet were used to train these systems.*

*Artists on ArtStation platform [**have also protested**](https://kotaku.com/artstation-ai-art-generated-images-epic-games-protest-1849891085) against neural networks, uploading images with “AI crossed out” as a form of protest. The reason for their dissatisfaction is the appearance of robot-generated "art" on the site alongside authentic content.*

<Img
img="/uploads/2_c515319e96.jpg"
alt="AI crossed out on ArtStation platform"
/>

## Examples of using neural networks in marketing, business and everyday life

- One of the most popular neural networks [**DALL-E 2**](https://openai.com/product/dall-e-2) can create original and realistic images based on textual descriptions. This is how the generated cover of Cosmopolitan turned out.

<Img
img="/uploads/3_258175c31c.jpg"
alt="Cosmo by DALL-E"
/>

- *Heinz* collaborated with marketing agency [**Rethink Ideas**](https://rethinkideas.com/work/heinz-ketchup/2022/digital-social/heinz-a-i-ketchup/) to create "the first-ever ad campaign with visuals generated entirely by artificial intelligence." The agency used AI image generator DALL-E 2 to create ketchup-related prompts, and the results looked just like *Heinz* bottles. The campaign featured social media posts and print ads featuring the best AI-generated images.

<Img
img="/uploads/photo_2023_05_03_15_43_33_523c99b731.jpg"
alt="Heinz used AI in their ad campaign"
/>

- [**Everypixel's AI-powered filter**](https://www.everypixel.com) rates the aesthetic value and commercial potential of stock images, providing more accurate and efficient search results for designers and image editors.

<Gallery>
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original="/uploads/2_268292e91d.png"
thumbnail="/uploads/2_268292e91d.png"
/>
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original="/uploads/1_49de9202d5.png"
thumbnail="/uploads/1_49de9202d5.png"
/>
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original="/uploads/3_687e2c9b21.png"
thumbnail="/uploads/3_687e2c9b21.png"
/>
</Gallery>

- *Perfect Corp.* has launched [**a new virtual try-on solution**](https://www.perfectcorp.com/business/products/virtual-hairstyles) that uses AI and AR technology to provide customers with hyper-realistic hairstyle simulations. Users can choose from 12 unique styles and view before and after simulations. The technology takes into account factors such as hair color and skin tone to create inclusive and impactful simulations.

<Img
img="/uploads/AI_hairstyle_1efa35a469.gif"
alt="AI-provided hairstyle"
/>

- An AI-created sneaker collection inspired by iconic *Nike* designs [**has gone extremely viral**](https://hypebeast.com/2022/12/nike-sneakers-artificial-intelligence-ai-clothingdaily-viral-instagram-tiktok) in December 2022 after being shared on Instagram* by @ai_clothingdaily. The digitally created shoes feature gothic and romantic elements with lace and beads, drawing attention from sneaker enthusiasts who praised the unique design and dreamed about buying a real item. The collection's popularity on social media could inspire *Nike*'s future design choices.

<Gallery>
<GalleryItem
original="/uploads/Krosy_5_b18c6af521.png"
thumbnail="/uploads/Krosy_5_b18c6af521.png"
/>
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original="/uploads/Krosy_4_d0aac616b2.png"
thumbnail="/uploads/Krosy_4_d0aac616b2.png"
/>
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original="/uploads/Krosy_6_39281655c9.png"
thumbnail="/uploads/Krosy_6_39281655c9.png"
/>
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original="/uploads/Krosy_7_82dbde5f6c.png"
thumbnail="/uploads/Krosy_7_82dbde5f6c.png"
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original="/uploads/Krosy_3_b49e079673.png"
thumbnail="/uploads/Krosy_3_b49e079673.png"
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original="/uploads/Krosy_2_9dc31687f5.png"
thumbnail="/uploads/Krosy_2_9dc31687f5.png"
/>
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original="/uploads/Krosy_1_e122be3598.png"
thumbnail="/uploads/Krosy_1_e122be3598.png"
/>
</Gallery>

- [**Kamil Banc**](https://www.amazon.com/stores/Kamil-Banc/author/B0BV79FGDR), an AI-assisted author, has published several books using AI image creator and prompts to speed up the writing and publishing process. His books, including an illustrated children's book “Bedtime Stories” and an adult coloring book, have received positive reviews despite only selling a few copies. It took Banc just four hours to publish an illustrated book. He credits AI for making the process simple and fast, saying he was surprised at how quickly he was able to go from concept to publishing.

<Img
img="/uploads/image14_51165340e1.png"
alt="Bedtime stories"
/>

- [**Looka**](https://looka.com) is a service that can generate logos. The system can create a logo for free within minutes, you just need to specify a few parameters. These are the options the neural network suggested for *Altcraft Platform*.

<Gallery>
<GalleryItem
original="/uploads/1_kartinka_ce0af926a2.png"
thumbnail="/uploads/1_kartinka_ce0af926a2.png"
/>
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original="/uploads/2_kartinka_098d97e065.png"
thumbnail="/uploads/2_kartinka_098d97e065.png"
/>
</Gallery>

The use of neural networks for such purposes in business speeds up the process of creating logos and makes it cheaper.

- The service [**Deep Nostalgia**](https://www.myheritage.com/) brings old photos to life. The neural network recognizes faces and animates the images.
<p>

- [**Lensa**](https://prisma-ai.com/lensa) app generates unique portraits from the user's photos using 10-20 samples.

<Img
img="/uploads/photo_2023_05_03_15_32_02_d49bb97566.jpg"
alt="Portraits by Lensa"
/>

[**Balaboba**](https://yandex.com/lab/yalm-en) is a neural network that generates text based on inputs and styles them to fit specific formats. Here's an example of the text that was generated with the phrase "marketing automation service".

<Img
img="/uploads/image10_3c2eaee137.png"
alt="Balaboba"
/>

The service for removing the background from photos, [**Retoucher**](https://retoucher.online/), also works based on neural networks. This is a useful function for marketing, especially when a company uploads images to online stores.

<Img
img="/uploads/10_1d5fcf30e3.png"
alt="Retoucher"
/>

- [**Disney's neural network**](https://studios.disneyresearch.com/2022/11/30/production-ready-face-re-aging-for-visual-effects/) is capable of changing the age of actors in a frame. Now it is possible to avoid the use of make-up and searching for similar actors to portray characters at a different age.

<Img
img="/uploads/photo_2023_05_03_15_30_01_227a76514e.jpg"
alt="Disney’s Neural network"
/>

Automatic content creation using neural networks is a possible solution to the problem of copyright when creating videos for business and marketing purposes.

## Summary

A neural network is a data processing and analysis system that replicates the work of the human brain. The software code imitates neurons and connections between them (synapses) through which information is transmitted. The system learns from previous experience or from algorithms provided by humans.

Modern neural networks generate images, write texts, create music, recognize faces, predict events, and much more. Technology is becoming part of everyday life and business, simplifying and speeding up human labor.

**The product belongs to Meta, a company recognized as extremist in Russia.*


Neural networks draw, generate texts, calculate complex data needed for decision-making in business, marketing, and daily life.

image20.png

Figuring out how a neural network functions and whether to use neural networks in your business?

Neural Networks in Business, Marketing and Social Life

Neural Networks in Business, Marketing and Life

<Img
img="/uploads/web3_95dcd31dca.png"
alt="Web 3.0: What It Is and How It Will Affect Marketing"
/>

Progress does not stand still, and Web3 has already appeared on the horizon. There are many rumors surrounding this concept and almost no specifics. However, it’s clear that marketing will have to face new realities. In this post, we will talk about what Web3 is, when to expect it and what marketers should prepare for.

## Third Generation Internet

The third generation of the World Wide Web, or the next generation of the Internet. This is how Web3 stands for. 

Web3 is the concept of a decentralized Internet space where power does not belong to giant companies such as Amazon, Google and Netflix, but to ordinary users. Web3 is based on blockchain technology, machine learning, big data and artificial intelligence. It is predicted that all this will make the Internet more accessible, and at the same time private and secure.

The first version of the Internet was introduced in the late 90s. It was a primitive web: simple fonts, inconspicuous buttons and blue hyperlinks. If you want to visualize the old version of the Internet, you just need to open any site using only HTML files. In fact, it was even worse.

Significant changes took place in 2005. Web2 users got the opportunity to watch new content, hang out on blogs and social networks. Everything would be fine, but a new problem has emerged in the process of evolution of the Internet. New marketing methods used by companies to work with customers have created [**a threat to the security of user data**](customer-data-privacy-issues-in-digital-marketing).

People began to distrust brands, despite efforts to protect Internet users and prevent confidential information from being shared with third parties. For example, in 2018 comedian Hasan Minaj stated on his Netflix show “The Patriot Act” that Amazon has control over the most important 21st-century commodity — data. The marketplace knows how much and where we spend money, and what we prefer to do in the digital space.

<Img
img="/uploads/glavnaya_stranica_amazon_ab73372337.jpg"
alt="Amazon website"
/>

It's not a joke at all. Amazon has grown from a bookstore to a tech giant. Now the scope of the corporation's interests includes e-commerce, streaming, cloud products and developments in the field of AI.

Web3 is supposed to solve the problem. The new generation of the Internet will allow users to independently control technical platforms. At the same time, they will no longer be in the role of “sheep” that campaigns shear for data. This can be done using the technology of tokens (cryptocurrencies) and blockchain. Blockchain will be owned by the one who owns the token. The more tokens you have, the more power you have over the World Wide Web. 

Critics of this approach agree that the attempt to decentralize the Internet looks too veiled, and in fact, people who have more money will continue to control the digital space.

<Img
img="/uploads/nft_kartina_382d17aed2.jpg"
alt="NFT picture"
/>

Anyway, tokens will soon take part in all digital processes: social networks, games, [**virtual art**](what-is-nft) and digital events.

## When to expect Web3

No one knows. Web3 has been a topic of discussion for several years, but the idea is still in its infancy. While the infrastructure required for implementation is evolving, there is no timeline for completion. Then what's all this noise about?

It is all about cryptocurrencies. They have become so popular that venture investors have invested $27 billion in cryptocurrency development projects in 2021 alone (according to [**The New York Times**](https://www.nytimes.com/interactive/2022/03/18/technology/web3-definition-internet.html?hubs_post-cta=blognavcard-marketing)). Therefore, everyone around is talking about the transition of the Internet to crypto technologies.

## What Web3 Means for Marketers

When Web3 appears, its arrival will greatly shake the world of marketing. 

### User data will become inaccessible

Web3 is characterized by high data privacy. Nowadays, all marketing is based on [**customer data**](first-second-and-third-party-data). Marketers collect all available information into a single client profile: contact details, socio-demographic status, behavioral characteristics.

All marketing campaigns are based on the analysis of behavioral data, for example, which places and sites the user visits, what products they buy. If companies know how much money customers spend, they can guess their income level and offer more expensive products.

Web3 assumes that users will be able to decide what information about themselves to share, and clearly control the scope of its application. This means that companies will have to bring transparency to the processes of collecting and using data. And also find more creative approaches to attract and retain customers.

### Communities will play an important role

Communities as a collection of users united by common ideas will be of particular value. Since the power in Web3 is concentrated in the hands of the “average” consumer, many such people together will have weight in determining the direction for the development of the digital space. The stronger the distrust of brands, the more interesting the idea of creating strong communities.

### Content will get more attention

How to attract potential customers if there are so many restrictions around? Use high-quality content. This is the content that the user will see and go to the seller himself.

Currently, content makers have to comply with the requirements of various platforms for posting materials, which seriously limits them. Web3 will give creators autonomy and remove the ceiling on potential earnings.

Charlie Neer, chief revenue officer at MIQ, stated in an interview for [**CMSWire**](https://www.cmswire.com/digital-marketing/what-does-web3-mean-for-marketing-and-customer-experience/?hubs_post-cta=blognavcard-marketing): “What does this look like in our current environment? Currently, when an individual downloads a song, the creator gets a fraction of the total revenue and the host (think Spotify or Apple Music) makes out like a bandit. The same goes for creators on YouTube, Twitch, etc”.

There is supposed to be more fairness in the age of Web3.

Most likely, we won’t see Web3 soon. However, those who keep abreast of the latest developments will win.

Web3 is the new generation of the internet. Read about when it will launch and what marketers should prepare for.

web3.png

Web3.0 is the next generation of the Internet. Let's break down what this means for the marketer.

Web 3.0: What It Is and How It Will Affect Marketing

How Web3 Will Change Digital Marketing

<Img
img="/uploads/chto_takoe_vebhuki_4d3dbae977.png"
alt="What are Webhooks"
/>

The human body knows exactly when to eat or sleep. We don't have to ask ourselves every time, «Are you hungry?». A signal received at the right time, without prior request. Webhooks work in the same way. Let's look into the subject: what it is and what advantages it brings.

## Webhook is the easiest way to communicate

The technology consists in sending system notifications to a specific URL in real time, as soon as the expected event has occurred. There is no need to regularly request a report on the state of the system. This is how APIs work. WebHooks will make themselves known if something happens.

Let’s consider some examples. Often after a meeting with friends, we ask them to report back as soon as they get home. We ask because we care about them. What's next? Your friends get home and text you, as promised. Your request in the language of technology is a command. The moment when friends get home is an expected event. Your phone to which messages are delivered is a unique URL that ensures the privacy of correspondence.

Bank cards work in a similar way. For example, you are waiting for a salary. To know about account replenishment, you can set up notifications about transactions in the mobile application. This is how the command is set. Now the system will automatically notify you of any changes in the bank account. The system will send an event notification to a unique URL — phone number, email or [**push**](mobile-marketing-101-push-notifications).

Webhooks are needed to exchange event data between independent systems. They are used in data management services, when setting up automatic debiting of money for the services provided. When funds are debited from the account automatically, the client needs a receipt confirming the payment. For this, a banking service and a webhook programmed for activity at the time of debiting are used. Thus, the client will automatically receive all checks.

## Why webhooks are used

Here are some reasons why businesses should use webhooks:

- Work efficiently with data.
- Easy automation.
- Consolidation of independent systems.

Any business collects and **processes data**. Often the results are used in several applications at the same time. The question is how to deliver them there without confusing algorithms and loss of information. In that case, webhooks are necessary. There are many other tools that work with events, but only webhooks send information to external systems as soon as the trigger fires. Think about bank notifications:  you set them up once, and you no longer have to request information - the system itself will notify you of all changes. 

Managers working with [**Big Data**](data-science-in-marketing-and-business) will highly appreciate this tool, because instant access to  the necessary information is often the key to success. The efficiency of work is also increased by the fact that the specialist gets rid of the need to manually check the status of the system each time.

**Automation of routine processes** is elementary with webhooks. They especially help in data management and data transport processes. The user sets up the command, defines the target event, and specifies the action to follow. The webhook will automatically transfer the necessary information online to the specified URL. Close control and manual control will be a thing of the past.

Imagine a situation where you want to set up user alerts that are sent every time a purchase is made. Automating the described process is fast if you connect webhooks to this.

**Webhooks build a direct connection** between applications, thereby achieving specificity and accuracy. It’s not necessary to combine several code elements in order to unite the data system. It’s much simpler than the API. At the same time, all information is secure and under full control.

## Action Hooks in Altcraft Platform

Advanced marketers have long appreciated webhooks: they make marketing easier, more accurate, and more effective. Optimization in the field of work processes is achieved, and the quality of data management is improved. Modern CDP has long provided users with this tool for work.

For example, [**Altcraft Platform**](/en) developed Action Hooks. It is a tool that sends notifications to external systems when an event is recorded in the platform. This includes system actions such as message delivery, profile import, triggered customer actions seen by pixels on your website or app.

Events are recorded in all connected databases or in a particular one. Captured events are sent in one batch in JSON format over HTTP or sent to the broker's queue asynchronously. As you have already noticed, the described technology provides unlimited possibilities for [**integration**](/features/integration). Improve your marketing — connect external BI, DMP and CRM and other tools. 

In this article, we talk about what webhooks are, how they work, and what benefits they have for your business.

chto-takoe-vebhuki.png

Webhooks open up endless possibilities for integration. Read about how this technology works.

What Are Webhooks and How to Use Them in Your Business

What are Webhooks

<Img
img="/uploads/NFT_4dbbc2853c.png"
alt="NFT: What is It and Why is It So Popular"
/>

Today, there's a lot of buzz going around NFT. It's the [**word of 2021**](https://blog.collinsdictionary.com/language-lovers/get-your-crypto-at-the-ready-nfts-are-big-in-2021/) according to Collins dictionary. And the popularity of the technology will continue to grow. The NFT market size reached $25 billion in 2021. According to forecasts, this number will reach $35 billion in 2022 and will increase to $80 billion by 2025. 
 
NFT allows one to sell and buy digital objects for cryptocurrency. Digital property prices reach thousands and millions of dollars. The core [**target audience**](creating-a-customer-profile) of NFTs are gamers, collectors and advanced investors. They tend to invest in NFTs rather than in stocks. The value of digital objects is growing, and NFT may soon replace documents in the real world. 
 
In this piece you will learn what NFTs are, how they work, what they are for, where to create, sell and buy a digital work of art or a digital object.

## What is NFT
 
**NFT (a non-fungible token)** is a technology that represents an entitlement its owner has to a digital object and confirms the uniqueness of a digital property. The concept came from the world of cryptocurrencies. Each NFT exists on a blockchain: a technology that records data in digital blocks in a certain order. Information on a blockchain can't be deleted or changed. Blocks are stored on multiple servers all over the world. It's almost impossible to hack a digital object on a blockchain. 
 
A **token** is a blockchain element or a digital record that can be compared to securities and stocks in the real world. There are fungible, partially-fungible and non-fungible tokens (NFTs). 
 
Let's look at examples.
 
### Fungible token

If you borrow the US one-hundred-dollar bill from someone, and then recover your debt with another one of the same value, there will be no difference for the person from whom you borrowed. Although the bills are different (i.e. each one has a unique number), they are of equal value and can replace each other. Cryptocurrency works the same way in the digital world. Any bitcoin is equal to the same one because each has a fungible token. 
 
### Partially-fungible token

A train ticket you buy is not unique because other passengers have the same tickets that can be exchanged. However, each passenger has a seat number specified in their ticket. It distinguishes one ticket from another. In the digital world, this ticket would combine the characteristics of a fungible token (the passengers of this train can exchange their tickets with each other and still get to their destination) and a non-fungible one because each ticket has a unique seat number. Therefore, a train ticket with a seat number can be viewed as a partially-fungible token. 
 
### Non-fungible token (NFT)

If you buy a painting that is sold in a single copy, you can't replace it with a reproduction because it has its own characteristics. When a unique object exists only in the digital world, it is assigned a non-fungible token (NFT). 

*An example of an NFT that is adored by many people around the world is a game called [**CryptoKitties**](https://www.cryptokitties.co/). There people buy digital pets with unique tokens. People breed NFT crypto cats and get new kittens. The blockchain code here functions as a genetic one: all new cats will be unique.*

<Img
img="/uploads/Crypto_Kitties_33c6faf574.jpg"
alt="CryptoKitties"
/>

## How the NFT Technology Appeared

The technology appeared in 2017 on the basis of the Ethereum cryptocurrency smart contracts. Smart contracts are agreement codes between a buyer and a seller and a way of using an object. In the digital world, a token performs the function of a signature. 
 
Initially, the NFT technology supported blockchain art: it protected the copyright of unique content. It is difficult to find out who the real author is in the digital world. For example, a JPG image of a cat doesn't differ from its copy. When you copy an image, it loses its uniqueness and the author remains unknown unless users don't specify their name under each post. If an image has an NFT, the copying history is saved and each user knows its author and owner. 
 
The first transition of a real work of art into the digital world became a performance. Injective Protocol bought Banksy's stencil «Morons (White)» created in 2007 for 95 thousand dollars. The work was burned, and only the virtual version in the form of an NFT was left.

<Img
img="/uploads/Morons_a3a09f84f4.jpg"
alt="Morons"
/>

Now, not only paintings, but also author's images, GIFs, music, photos and videos, game items can have an NFT. Even real-world objects can have it: cars, real estate. Perhaps in the future there will be no need for paper documents because NFTs will replace even passports.  

## How to Create, Sell and Buy NFTs

### How to Buy an NFT
 
First, you need to choose a platform. NFT platforms trade digital objects in cryptocurrency, sometimes in dollars. Examples of platforms: Juggerworld, Treasureland, Blockparty, Nfty Gateway, Rarible, OpenSea, NFT STARS, NFT-X and others.  
 
A buyer receives a digital certificate with unique blockchain data and stores an object on any device: smartphone, computer, flash drive. The object itself remains in IPFS (Inter-Planetary File System). Other users will be able to download and view the object, but only one user will have the private key (certificate). The owner has the right to issue public keys to users when copying to confirm the authenticity of the object.

### How to Create an NFT and Sell It 
 
You can use one platform for creation and sale. The user needs a crypto wallet to pay the platform commission (sometimes there's no commission) and the object itself. The owner uploads the content to the platform and sets the price.
 
NFT is created in one of the blockchain formats: ERC-721, ERC-1155, ERC-998, EIP-2309 and others that NFT platforms have. 
 
**An NFT author has the right:**

- To limit the number of copies. 
- To receive royalties from each sale (sometimes this process is automated). 
- Not to prove copyright, which is registered in the blockchain. 

## What are NFTs for

### Authors can earn money from their content

Usually authors promote the platforms with their content. In return, they get advertising and virality, but not money directly. With NFT, the author will receive royalties when someone uses their content. 
 
### Copyright protection

Before NFTs, it was necessary to specify the author's name on their creations. The method worked poorly, the author's name was often lost. The creator of the object, the current owner and the resale history are recorded in the blockchain.
 
### Replacement of digital documents and tickets

With NFTs, ownership of real estate or a car is confirmed with a token instead of a paper document. The technology is also used to sell tickets to events. The difference between ordinary e-tickets and documents and NFTs is in the degree of protection: NFTs can't be forged and stolen.
 
### Content interactivity

NFTs make media content interactive allowing the user to take part in its creation. 
 
Example. Creators of comedy series The Gimmicks distributed free tokens that users use to [**vote for plot development options**](https://www.sammobile.com/news/samsung-tv-buy-sell-hold-nfts/). Also, users receive a unique NFT character from the series and even become assistants in the production team. 
 
### Investment

Buying digital objects is a profitable investment. NFTs are getting more expensive, digital objects are being resold for impressive amounts of money, but still it's impossible to say for sure the price of which NFT will skyrocket in the future. Not all NFTs are valuable: it depends on the author and characteristics. For example, [**Elon Musk put up for sale his tweet**](https://www.cnbc.com/2021/03/16/elon-musk-is-offering-to-sell-his-tweet-as-an-nft.html) in the form of an NFT. The price of the item at auction exceeded one million dollars.

<Img
img="/uploads/tvit_ilona_maska_4917169831.jpg"
alt="Elon Musk put up for sale his tweet"
/>

## Examples of NFTs 

Some NFTs become famous all over the world, not just among collectors. Such objects are sold at famous auctions Christie's and Sotheby's. Sometimes NFT art seems primitive, but even simple images can cost millions of dollars. Below you will see a few examples of digital objects that cost like millionaires' yachts.

### CryptoPunks

This is an example of a very simple but expensive NFT. Only rich collectors can afford these [**unique pixel avatars**](https://www.larvalabs.com/cryptopunks).

<Img
img="/uploads/Crypto_Punks_55a6ec26df.jpg"
alt="CryptoPunks"
/>

A collection of nine rare CryptoPunks images was sold for almost [**$17 million**](https://www.christies.com/lot/lot-6316969) at Christie's.

<Img
img="/uploads/Crypto_Punks2_a3ab63d3f4.jpg"
alt="CryptoPunks"
/>

### The First 5000 Days

Artist Beeple published a new work every day for 13 years and then combined all the images into a collage of 50000 thousand elements and sold as NFT at Christie's. The image is called The First 5000 Days because the author decided to create a new picture every day for the rest of his life. The collage with the first days costs $69 million.

<Img
img="/uploads/pervye_pyat_tysyach_dnej_3eec316268.jpg"
alt="The First 5000 Days"
/>

### World Wide Web source code

English scientist Tim Berners-Lee created a token for the [**source code of the Internet**](https://www.sothebys.com/en/buy/auction/2021/this-changed-everything-source-code-for-www-x-tim-berners-lee-an-nft/source-code-for-the-www), which he invented in 1989. The cost of this NFT at Sotheby's is $5.4 million.

<Img
img="/uploads/iskhodnyj_kod_interneta_aac87ed64d.jpg"
alt="World Wide Web source code"
/>

### Campbell's Soup Can
 
Andy Warhol's famous painting of Campbell's soup cans also turned into an NFT. The work called «Untitled (Campbell's Soup Can)» was sold at Christie's for $1.1 million.

<Img
img="/uploads/banka_supa_campbell_s_73d98ef1bc.png"
alt="Campbell's Soup Can"
/>

### Transition by Pokras Lampas

Calligrapher Pokras Lampas digitized and sold for [**$29,000**](https://foundation.app/@pokraslampas/foundation/5441) an NFT photo depicting a projection of his work at the Chirkeyskaya hydropower plant.

<Img
img="/uploads/Transition_pokrasa_lampasa_e67041ca23.jpg"
alt="Transition by Pokras Lampas"
/>

### Nyan Cat

Creator of Nyan Cat meme Chris Torres made a token out of the [**Internet-famous cat**](https://foundation.app/@NyanCat/foundation/219) and sold it for more than $560 thousand dollars.

<Img
img="/uploads/Nyan_Cat_afdc9a304c.jpg"
alt="Nyan Cat"
/>

## Conclusion

NFT (a non-fungible token) is a blockchain-based technology that confirms the uniqueness of a digital object, protects copyright and keeps the history of changes and resales. 
 
It's impossible to support NFT, but it's easy to create one. A digital object is uploaded to one of the NFT platforms and the price is indicated in cryptocurrency (sometimes in dollars). With the technology, people sell works of art, images, music, GIFs and even game items. NFTs even replace paper documents when buying real estate or a car. 
 
This technology allows content creators to receive royalties. NFTs are also an alternative to conventional investment. Digital objects are growing in price and are often sold at auctions for thousands and millions of dollars.

In this piece, we will tell you what NFTs are, how they work and what they are for, where to create, sell or buy a digital work of art or a digital object.

NFT.png

NFT allows one to sell and buy digital objects for cryptocurrency. It may soon replace documents in the real world. 

NFT: What It Is, How It Appeared, What It Is For

NFT: What is It and Why is It So Popular

<Img 
img="/uploads/metavselennye_54c31b95d4.jpg"
alt="Metaverses"
/>

Metaverse is one of the main words of 2021 according to [**Collins**](https://www.theguardian.com/books/2021/nov/24/nft-is-collins-dictionary-word-of-the-year). Despite popularity in the media and the [**peak number**](https://trends.google.com/trends/explore?q=metaverse) of search queries in 2022, a lot of people do not know what this word means. Although metaverses are no longer fiction, but a real space for entertainment, education, work and marketing.
 
The metaverse development market has reached almost [**$48 billion**](https://www.statista.com/statistics/1295784/metaverse-market-size/). It is projected to grow to 678 billion by 2030. Large global corporations and small startups develop new digital worlds. Metaverses are often confused with virtual worlds and computer games, but the concept is broader. In this article, you will learn what metaverse is and why we need it. 

## What is Metaverse

<Note>
The metaverse is a digital space that creates a simulation of reality and integrates existing services, content and brand products into a single environment.
</Note>

The world of the metaverse exists alongside the real one, intersects with it or complements it. People study, go to virtual stores and meet with colleagues in a digital office there. 
 
The metaverse is referred to as a three-dimensional Internet. On the usual Internet, the user consumes content, while in the digital universe they are inside the content. In the metaverse, each person creates an avatar, a digital identity that other users see. You can control your avatar from a [**mobile device**](mobile-marketing). However, if you want to fully immerse in the "parallel universe", you will need a virtual reality headset. 
 
The everyday life of the metaverse resembles a sci-fi movie: characters sit at a desk in their office and discuss an important issue. At the end of the meeting, everyone disconnects and it turns out that everyone is in different places, and the office is virtual.  
 
Meetings in the metaverse will be held in much the same way. The difference is that movie characters need a small device (e.g. a button) to switch between the real and virtual worlds. In reality, we will need to wear a VR headset. It will resemble a Zoom meeting but with full immersion and the effect of presence. You will not need to share your screen because all information will appear in front of each user's avatar. Each user will see a virtual screen, almost like the character of the Marvel Cinematic Universe.

<Img 
img="/uploads/zheleznyj_chelovek_film_f1493ce0da.jpg"
alt="Metaverse"
src="A scene from «Iron Man»"
/>
 
In the metaverse, you can also see your friends in digital coffee shops, bars or in a fictional world. You can go to a workout or play a game together. If there are thousands of kilometers between you and your friends and you want to go to a cinema together, a virtual reality headset will help you. 

## Characteristics of the Metaverse

There are characteristics that distinguish the metaverse from a computer game and virtual reality:
 
**All actions happen in real time.** The metaverse cannot be paused, saved or rebooted. Events continue to occur when the user logs out of the platform.  
 
**At the same time, an unlimited number of users are active in the metaverse.** Each avatar is a real person. 
 
**Domestic economy.** The metaverse currency has the same value as the real one. You will have to earn money there, as in the real world. Domestic currency is sold, bought and invested.
 
**The metaverse encompasses the real and digital worlds**: open and closed platforms intersect, objects from one digital space freely penetrate into another. Characters from games and movies interact with each other, with metaverse objects and brands. For example, a user buys a bag in a virtual store of a real brand and then goes with it in a virtual cinema owned by another brand. The metaverse is like the spaces of different computer games glued together.
 
**Users** not only consume the product made by developers, but **create content and experience within the metaverse themselves**. 

## The Origin and Future of the Metaverse

It all started with fiction. The term "metaverse" first appeared in the science fiction novel "Avalanche" (1992) by Neal Stephenson. In the book, the author describes the virtual world that appeared in the XXI century. The users exist in the form of 3D avatars, they buy and sell real estate. 
 
The digital universe is also shown in movies. You can see virtual worlds in "Ready Player One", "Tron", iconic "The Matrix" and other movies. Something close to the metaverse exists in Fortnite and World of Warcraft in a platform that is called Second Life. It combines a virtual world and a social network. There, users' avatars move around online spaces, hold meetings, go shopping in marketplaces and choose outfits from virtual fashion collections.

<Img 
img="/uploads/metavselennaya_1bae10079f.jpg"
alt="The origin of the metaverse"
src="A meeting room in the Second Life platform"
/>

Companies all over the world develop metaverses: Microsoft, Decentraland, Roblox and others. But nowadays there is no unified and full-fledged digital universe. 
 
Heavy VR headsets make transition to the digital space harder. It is difficult to wear them for more than 30 minutes. There are not enough other tools to simulate physical actions, but companies are developing such solutions. A Japanese start-up [**H2L**](https://www.indiatimes.com/technology/news/japanese-startup-wants-to-inflict-pain-in-the-metaverse-using-electric-shocks-565298.html) created a suit for feeling pain in the metaverse. Panasonic introduced the [**Pebble Feel**](https://game-news24.com/2022/01/05/pebble-feel-is-a-personal-air-conditioner-built-for-the-metaverse/) system, which can heat and cool users in the digital world.  
 
However, it is a problem that different companies develop metaverses. It is difficult to combine different spaces. Companies need to agree on common currency, rules for user conduct and laws of the metaverse.

## Why do We Need Metaverses

### Business

**Simulation of an office and other meeting spaces.** During the pandemic, [**British illustrators moved**](https://pictolic.com/en/article/in-the-uk-working-online-conference-started-in-video-games) Zoom calls to Red Dead Redemption 2. The team created cowboy avatars and sat around a campfire in a Wild West setting. At the end, each participant mounted a horse and rode off into the night. Such unconventional locations and formats for business meetings will become a usual thing in the metaverse. 
 
**Buying and selling metaverse objects and investing.** With NFT technology, items become the unique property of the buyer, which is available for resale. There are even realtors for digital real estate, which is constantly growing in prices and becoming a lucrative investment. 
 
The metaverse will facilitate the solution of design tasks. It is easier to study and transform a 3D model of an object in the virtual world. Modelling in the metaverse should also reduce waste and speed up the process of developing new solutions.

### Marketing 

Brands are picking up the idea of promotion in the metaverses. The main goal is to attract millennials and generation X, who are the first to master new technologies. Even mentioning a brand in the context of the metaverse brings additional recognition to a company. 

**How to promote a business in the metaverse:**
 
**Create your own metaverse.** For example, Nike announced that they would [**develop a digital world**](https://news.nike.com/news/five-things-to-know-roblox) in partnership with Roblox. In [**Nikeland**](https://www.roblox.com/nikeland), users get into a copy of the company's headquarters and compete in sports mini-games. Lego has also decided to [**create a digital universe for children**](https://www.epicgames.com/site/en-US/news/the-lego-group-and-epic-games-team-up-to-build-a-place-for-kids-to-play-in-the-metaverse) in collaboration with Epic Games. 
 
**Open a store in the digital space.** Sell digital and real items in the metaverse, which will be delivered to the buyer's address after fitting or testing. 
 
Gucci created the first virtual sneakers - Gucci Virtual 25. The user can try on the shoes in [**augmented reality**](digital-marketing-trends) and wear them in Roblox and VRChat applications. The company also opened Gucci Garden in Roblox. It is a copy of a real digital installation in Florence.

<Gallery>
<GalleryItem
original="/uploads/virtualnye_krossovki_286df20b80.png"
thumbnail="/uploads/virtualnye_krossovki_286df20b80.png"
description="Gucci virtual sneakers"
/>
<GalleryItem
original="/uploads/virtualnye_krossovki_2_dedb9e13df.png"
thumbnail="/uploads/virtualnye_krossovki_2_dedb9e13df.png"
description="Gucci virtual sneakers"
/>
</Gallery>
 
**Virtual influencers and models.** Brands are already creating their own digital characters or collaborating with others. For example, a virtual model [**Lil Miquela**](https://www.instagram.com/lilmiquela/) exists only in social networks but gives interviews and releases music videos. Her virtual life attracts millions of users who follow her on social networks. 

<Gallery>
<GalleryItem
original="/uploads/lil_mikela_77f17b28ba.jpg"
thumbnail="/uploads/lil_mikela_77f17b28ba.jpg"
description="Virtual influencer Lil Miquela"
/>
<GalleryItem
original="/uploads/lil_mikela_2_4684b2b38b.jpg"
thumbnail="/uploads/lil_mikela_2_4684b2b38b.jpg"
description="Virtual influencer Lil Miquela"
/>
</Gallery>
 
**Outdoor advertising in the metaverse.** Here, everything as in the real world — billboards and digital screens are used for advertising. Placement ideas depend only on the creativity of marketers. 

### Entertainment and education

Metaverses are similar to games, so they expand gaming experience. Communication with other users and an immersive environment are added.

Events are already held in the metaverse. In 2020, [**Travis Scott performed**](https://www.youtube.com/watch?v=wYeFAlVC8qU) in front of 12 million players at a virtual concert in Fortnite because offline events were cancelled due to the pandemic.

<Img 
img="/uploads/razvlecheniya_v_metavselennoj_43c3422037.jpg"
alt="Why do We Need Metaverses"
src="Travis Scott's virtual concert in Fortnite"
/>

As for education, students can see what exactly they study in metaverses. For example, students can witness a historical event and future design engineers can see a spacecraft system for a detailed study. 

## Conclusion

The metaverse is a space in the digital world that exists alongside the real one. This is a parallel reality, but the actions in the digital universe affect the events in the real world.
 
The metaverse cannot be paused or saved, all actions take place in real time. Users use avatars to communicate with other real people in the digital world. Nowadays, there are no full-fledged metaverses, but dozens of companies all over the world are developing them. 
 
Metaverses will expand business opportunities with virtual offices and investments in digital objects. Companies are already opening their digital stores and placing advertisements on billboards in the metaverse. Events are held in the metaverse, and in the future digital spaces will become educational platforms. 

The metaverse is a new step in the development of the Internet, which becomes three-dimensional and adds the effect of presence.

Read about the metaverse in our new article: what it is, what the main characteristics are and how to use it in business and marketing.

metavselennye.jpg

Metaverses are often confused with virtual worlds and computer games, but the concept is broader. In this article, you will learn what metaverse is and why we need it. 

Metaverse: How to Use It in Business and Marketing

Metaverses: What are They and Why do We Need Them

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