Every once in a while, something new comes on to the scene that sends shockwaves through the media and marketing landscape as we know it. The introduction of Facebook in 2004. The launch of the iPhone in 2007. The emergence of AR through Pokémon GO in 2016. These paradigm-shifting events—and there are many more besides—all fundamentally transformed how brands think about their go-to-market strategies. Today, if we are to believe the hype (and the billions upon billions of investor dollars that are fueling the phenomenon), it appears the metaverse is well-positioned to become the next “big thing” to join that esteemed list.
In digital advertising circles, the metaverse is one of the most noteworthy trends of the moment—and with good reason. For one, there is all the forecasts and research: many are writing about the possible reach and highly lucrative potential of this nascent medium. One recent study by Bloomberg Intelligence estimates the global metaverse revenue opportunity could approach $800 billion in 2024. Another by Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse.
Then there is the constant stream of dialogue around the subject. Be it stories exploring how heavyweight tech companies like Meta are going all-in on taking the metaverse mainstream, or news about major metaverse-related acquisitions and funds, there is a noise across the industry that is growing louder and louder.
For many (if not most) brands, the sensible approach to the metaverse right now is to learn, observe, and wait for the concept to become more tangible, as it is still far too soon to know which investments will be viable in the long term. But for those looking to be early adopters in the space, there are a few initial metaverse solutions that indicate potential use cases for advertisers. Although this medium will not be replacing the way we interact digitally any time in the near future, by exploring it now, brands can help take part in determining how this new reality unfolds.
At this moment, it’s difficult to pin down an exact definition of the metaverse because, for the most part, it does not fully exist. Some of the basic building blocks are already in place, including 3D gaming, blockchain technology, and virtual and augmented realities, while other necessary technologies are emerging all the time—like 5G internet, for example, or more intelligent hardware, or non-fungible tokens.
What we do know is that the metaverse is a place where the physical and digital worlds coalesce; a shared, interoperable, and collaborative virtual universe rendered in three-dimensional form. Many advocates see the metaverse as the natural evolution of the internet and smartphones, but rather than interacting via keyboards or touchscreens, users are immersed in dynamic, participatory environments that make them live actors in cyberspace. It is a concept that promises to transform the way people connect with one another, and it has the potential to disrupt a raft of everyday activities—from gaming and sports to business travel and education, and everything else in between.
So, just how can digital marketers start tapping into the metaverse?
One great place to look for guidance is the video game industry, where marketers are already exploring how the social aspect of virtual realities can enhance brand engagement and create fresh avenues of data collection. Of course, not all video games fall into the metaverse category, but some of the most prominent ones today showcase core metaverse attributes such as personalized avatars, multi-player modes, and the ability to interact with fellow gamers in real-time. Roblox, Fortnite, Decentraland, Somnium Space, and Animal Crossing are a handful that tick all these boxes, making them ripe grounds for marketers looking to experiment with both paid and organic activations.
Let’s breakdown three of the most popular approaches brands are adopting:
Gucci was one of the first big names to plant an early flag in the metaverse, teaming up with Roblox to create a virtual, two-week-long immersive art installation titled The Gucci Gardens. Inside this dreamy experience, users could wander around multiple themed rooms that paid homage to famous Gucci campaigns, throughout which they could try on and purchase digital Gucci items such as bags, clothes, and sunglasses. This time-limited campaign became a viral success after select in-game NFTs went Roblox limited (aka only available on the platform for a limited time and in limited quantities), and it ultimately helped Gucci gain some valuable early exposure for both its brand and its products before Roblox’s very young user demographics—i.e., the next generation of consumers.
Other companies have taken this concept of temporary activation in the metaverse one step further by building permanent in-game spaces. Vans, for example, has created a virtual interactive skatepark it has called Vans World, where fans can go to socialize, take on daily challenges, and acquire exclusive Vans gear. Nike, too, has entered the fray with NIKELAND, a digital arena inspired by the company’s real-life headquarters that offers users the chance to compete in various mini-games and check out new product offerings.
Together, these examples symbolize how forward-thinking brands are beginning to address changing consumer behaviors and deliver new, meaningful experiences. Marketing organizations today are typically meeting their audiences on their website and social media channels (or, in the retail sphere, in-store). But as we hurtle towards Web 3.0, these virtual in-game worlds may be one of the calling cards of the future. With this new touchpoint in their arsenal, media buyers can do a host of valuable things, including:
Obviously, not every brand needs to create its own distinct micro world, or even has the means to. Indeed, many are testing the metaverse waters with something more modest.
Case in point? Just look at the fashion and beauty industry, where numerous heavy hitters are attempting to revolutionize their go-to-market strategy by creating virtual flagship destinations accessible through VR headsets. Lancôme, Nars, Charlotte Tilbury, and Dior represent just a small sample of those tapping into this trend, and initial consumer perceptions look promising. The ability of these immersive stores to mimic real-life retail spaces and facilitate the effect of browsing is an extremely attractive proposition for consumers and brands alike. Today’s standard 2D e-commerce interface—typically based around a grid model—is great for purposeful shopping if consumers know exactly what they’re looking for, but it is not necessarily conducive to discovery or inspiring spontaneous purchases. Consumers don’t always go shopping because they need something specific; sometimes, they do so simply to peruse what’s on sale, keep abreast of the latest trends, or learn about new discounts. Virtual 3D stores can encourage these things in ways traditional websites cannot.
In certain metaverse realms, opening such virtual hubs is becoming a huge business. Platforms like The Sandbox, Decentraland, Cryptovoxels, and Somnium Space are all virtual worlds that specialize in this area, offering users opportunities to buy or rent digital real estate with cryptocurrency. Celebrities, companies, media agencies, art galleries, and countless others are rushing to snap up parcels of land in these metaverses, and some of the numbers involved are mind-boggling. For instance, Swiss fashion house Philipp Plein hit headlines recently with the news they had bought a plot of land in Decentraland worth a massive $1.4 million. And they’re not alone: Adidas, Care Bears, Samsung, and even more buttoned-up brands like JPMorgan Chase have all opened virtual spaces on these platforms.
What these pricey endeavors embody is a deep commitment to an enduring virtual presence. They are evidence that some brands don’t see the metaverse as some passing craze, but as something that is here to stay and worth investing in.
Away from the glamor and glitz of world-building, there are other, more subtle opportunities for media placements in the metaverse through in-game advertising. This is not exactly a new concept: even going back 15 to 20 years, advertisers had the ability to show ads relevant to the moment in virtual settings. One of the most famous examples was when Barack Obama purchased ad space in a number of games from Electronic Arts to support his first election bid.
The same idea exists now, only it has been expanded into the metaverse. Companies like Bidstack and Anzu enable game developers to showcase ads within their worlds, offering sponsorships on advertising hoardings within sports stadiums or on digital billboards that dot the streetscapes in Roblox City. In good news for advertisers, gamers are actually fairly receptive to seeing brands as they roam about in the metaverse, yet they would expect product placement to be relevant to their environment—just like in the real world. Particularly for smaller brands, this type of metaverse advertising is a chance to get their foot in the door without having to invest upfront in large-scale projects à la Gucci, Philipp Plein, and co.
As things stand, we are still very much in the early stages of the metaverse, but that will likely not be the case for long. Things tend to move at lightning speed in the tech industry, and there are already a number of opportunities for brands to consider. Understanding and testing implementation now will help marketers get out ahead of the trend.
Want to learn more about how you can prepare for potential advertising opportunities in the metaverse? Check out our webinar on April 27.