The term metaverse has been getting a lot of buzz lately. While the concept remains fluid, its potential to unleash the next wave of digital marketing revolution is undisputed. Marketers need to grasp its full potential and not dismiss it as a fad. Let’s dive straight into what metaverse is all about and the opportunities that lie ahead with real-life use cases.
What is Metaverse?
The metaverse, simply put, is a virtual environment that perfectly merges our real and digital worlds. It is a new dimension that mirrors the actual world in an immersive and collaborative 3D experience via the use of technologies including augmented reality, virtual reality, artificial intelligence, blockchain, digital currency, and social media.
Describing metaverse and giving a rationale for Facebook becoming a metaverse company, Mark Zuckerberg said, “It’s a virtual environment where you can be present with people in digital spaces. You can kind of think of this as an embodied internet that you’re inside of rather than just looking at.” So, in many ways, it is like a dual-life platform – meaning one that allows you to create your own life-like avatars in an alternative virtual world and that could be a virtual retail store, a gaming platform, a concert, a classroom, an advertising channel, and more– the possibilities are limitless.
Characteristics of Metaverse
In the metaverse, you can be who you want to be, create what you want, where you want, for whom you want, and how you want. The following 5 underlying characteristics of metaverse, empowering users to take their digital lives into their own hands, are hyper-accelerating its popularity and adoption rates:
1. Always-on immersive experience: The metaverse is a fully immersive and social experience. Users can communicate and collaborate with each other. It'll be a parallel reality that persists in real-time and never stops.
2. Cross-platform interoperability: In the metaverse, different platforms can collaborate. For example, you can transfer and use assets from one virtual world in another.
3. User-generated content: It is a decentralized environment where users can produce and share their original content with the rest of the community as they see fit.
4. Fully functional economic world: Digital worlds will have fully functioning economies based on cryptocurrencies and blockchain, offering opportunities for buying, selling, investing and true ownership.
5. Autonomous universe: The metaverse is an autonomous universe which is controlled by no one and owned by everyone meaning the user remains in control of their online identity and data, instead of the Big Tech or Government.
Metaverse has significant market potential
The metaverse will provide immersive places where engaged audiences will gather, create, discover, collaborate, and ultimately spend money. McKinsey’s latest report, 'Value Creation in the Metaverse', estimates annual global spending related to the metaverse could reach US$5 trillion by 2030. Of which, its market impact on e-commerce is expected to be between $2 trillion and $2.6 trillion, $144–$206 billion on the advertising market, $180 - $270 billion on the academic virtual learning market and $108–$125 billion on the gaming market.
Metaverse is emerging as the go-to distribution channel for accessing a totally new demographic that holds the key to future i.e., the Millennials and Generation Z – majority of whom are passionate users of metaverse and its related applications like Roblox, Decentraland, The Sandbox, and not exposed to traditional channels such as TV or billboard.
Years not decades - that’s what the metaverse, unlike the internet- web 1.0 (read only web) and web 2.0 (participative social web), will take to reach masses by offering a more personalized experience and true ownership of data to users. A growing number of businesses are already investing in metaverses for not only entertainment but for commercial reasons. Taking early-bird opportunities in this domain can help companies achieve the visibility they aspire. Sky is the limit in the metaverse. The future is here and now.
What does this mean for Marketing?
What this means for digital marketers is that it’s time to take experiential marketing to the next level to engage consumers in new ways by pushing creative and technology boundaries. Here are 4 marketing specific metaverse use cases that marketers should take note of.
1. Online shopping: Metaverse will revolutionize e-commerce as we know it, offering a more immersive and social platform for buying and selling, which in turn will lead to increased sales and revenue. Nike launched NIKELAND, its virtual store on Roblox, attracting more than 10 million visitors from December 2021 through April 2022 from over 224 countries. The space allows users to try on virtual products in addition to playing to the strengths of Roblox as a platform with games such as dodgeball. AnamXR uses game-engine technology to create cloud-based, virtual e-commerce platforms for 3-D immersive shopping experiences.
2. Metaverse events: As the concept of hybrid conferences gains traction post-Covid, Metaverse can play a big role in how companies create such marketing experience. In 2020, Deutsche Bank Corporate Bank experimented with the metaverse to provide an avatar-based immersive conference experience to top Corporate Treasury Heads in partnership with The Economist and as part of its own digital ‘Festival of Finance’ event on the side of a major digital banking industry conference. Virtual concerts, live selling events, and virtual product try-ons are other ways to dip your toe into the virtual reality world. In 2020, rapper Travis Scott held a fully digitalized immersive concert experience inside of Fortnite, gathering around 27.7 million players, all in order to promote new music.
3. Limited NFT editions and Collectibles: People in the metaverse are personified by virtual avatars and they enjoy collecting artefacts. Non-Fungible Tokens (NFTs) offer a great way for brands, especially luxury brands, to create unique experiences and reach a new audience of art-loving, cause-driven individuals who want to belong to the community.Louis Vuitton, Starbucks, Gucci, Nike, Matteland Coca-Cola are some high profile names that stand out for experimenting with everything from limited-edition NFTs, hottest digital sneakers, sweatshirts, or handbags in the past year to advertise on the metaverse.
4. In-game branding and advertising: VR games like The Sandbox and Fortnite are offering product placement opportunities within their game. The Sandbox has proven popular with brands wanting to establish their metaverse presence with landowners including Snoop Dogg, HSBC, Warner Music, PwC, and Paris Hilton. Started out as a mobile game, The Sandbox has now turned into a truly centralized metaverse platform that allows users to build 3D items - characters, vehicles which are then minted as NFTs and can be traded via the platform’s built-in marketplace. Gaming giant and Fortnite creator, Epic Games has partnered with major advertising agency WPP to train advertising specialists on creating custom brand experiences in Fortnite, as well as on how to use its Unreal Engine for developing metaverse content.
The Future of Marketing in the Metaverse
The metaverse is ripe with marketing and advertising possibilities. The blurring of lines between the physical and digital worlds is enabling brands to ride this digital revolution to target specific audiences and deliver personalized interactions. But success will depend on defining metaverse goals, identifying the right metaverse platforms that have a brand fit, and then creating fully immersive experiences that appeal to chosen audiences. Brands will be served well to experiment, learn, and then scale their ability to deliver such experiences. A new-age breed of marketers will be born with specific skillsets to successfully build such new realities and engagements. However, robust governance around issues such as data privacy, safety, equity, diversity & inclusion, and ethics needs to be established as we tread with cautious optimism.
While we do not know what the future holds, surely the ability for brands to participate in the next evolution of creativity, communication, and technology promises to be an exciting roller-coaster ride.
