My first memory of a virtual reality type set-up was whilst watching Arnie’s blockbuster movie Total Recall in the early 90s. 30 years on, some of the futuristic technological advancements are big business today. Many predictions have come true. We’ve seen the creation of self-driving vehicles (Tesla have recently reached a market cap of $1 Trillion), video conference calls are often used as a primary form of communication (Zoom hit a market cap of $44 Billion), and in-home exercise programmes can be delivered virtually through hologram coaches (Peloton has a market cap of $8.93 Billion). The next frontier has been coined the metaverse.
In simple terms, the metaverse is a virtual-reality space in which users can interact with a computer-generated environment and other users. It’s a coming together of the physical and virtual worlds, through a VR headset, where avatars (a virtual representation of oneself) are used to navigate the virtual and augmented world. In recent times, the metaverse has become synonymous with Netflix’s ‘Black Mirror’, Mark Zuckerberg’s Meta (AKA Facebook) and virtual concerts via Fortnite. The level of excitement and momentum is certainly building with ‘#metaverse’ now being tweeted over 700 times per hour! Advertisers are working towards actively discovering a plethora of ways to connect with consumers, particularly within gaming.
Gamified virtual outcomes
While the metaverse remains conceptual, the technology behind it is very real and advertisers willing to embrace new experiences will gain insight on what it takes to be successful. Microsoft has recently announced acquisition plans worth £56bn to takeover Activision Blizzard, with Satya Nadella (Microsoft CEO) claiming that ‘gaming will play a key role’ in the evolution of the metaverse.
In the last few years, we’ve seen Pokémon Go turn AR mainstream, Roblox create over 24m immersive 3D experiences, and brands like Gucci create virtual gardens and collectables for avatars to celebrate the past and present. Mobile game, The Sandbox, sold a plot of virtual land for $4.3m, so no doubt we will continue to see even more innovations that capture consumer interest. In-game advertising opportunities currently create great branding opportunities for advertisers, whether in the guise of sponsoring virtual billboards or branded in-game character clothing, all of which can be bought programmatically (e.g. Roblox).
This provides a very interesting podium, as these virtual spaces can be used to bring together entertainment, social and commerce under one holistic experience. Much like the rise of social commerce, which is now expected to drive over $36 billion in sales in 2021, new engagement paradigms can deliver meaningful business outcomes from the likes of virtual showrooms and product demonstrations.
Whilst the opportunity is large, there is also a large degree of evolution that needs to take place to move the metaverse away from conceptual to accessible, and an everyday seamless experience for consumers and advertisers.
We have spent the last decade understanding the importance of how media, content and owned properties help to create a frictionless experience for the consumer. Currently the metaverse rush is somewhat hamstrung through the absence of interoperability between metaverses. For example, you cannot transport a digital currency or avatar from one ecosystem to another, meaning experiences are disparate and therefore advertising opportunities for creating holistic experiences are limited.
AR and VR devices are still evolving
The technology giants are pushing significant investment in this space to drive rapid evolution. According to e-marketer, shipments in AR and VR devices will reach £20-30m by 2025. AR and VR devices are pivotal to driving the accessibility of virtual / augmented experiences and the success of these experiences are much reliant on the technological infrastructures that sit behind it. The development of 5G, for example, acts as an enablement for the metaverse, allowing for lower latency and better user experience. Currently 30% of the world has 5G availability and there are some quarters that believe we will need to be 6G ready to fully realise the potential of the metaverse and advertising experiences within.
Superfluity of signals and data vs data privacy
Advertiser opportunities could be significantly bolstered through the overabundance of data and signals that are potentially available within a metaverse. This provides a huge opportunity where eye/voice tracking or emotional sentiment responses are measured (for example, what is to stop heart rate data via smart watches?) in relation to advertising experiences. This opens exciting opportunities for advertisers to engage with users immersed in richer experiences. Payment models will continue to evolve to a structure that rewards a positive experience (cost per positive experience) or some form of attention metric cost.
Connecting those data sets back with traditional data collected could enable revolutionary customer profiling and segmentation opportunities for advertisers. This won’t be without some clear complications around privacy, consent as well as brand safety and suitability of environments. When it comes to brand safety, brands must ask themselves what their guidelines and goalposts are in the virtual world. How do you control or open access – a lot of this is still to come through regulation and design of the metaverse but brands need to think about any inherent risks upfront.
How should we be thinking about the next frontier?
Many existing core principles can be applied to the next frontier to ensure brands can win in this newly developed space.
Continue to drive valuable experiences for the consumer
There’s lots of thought going into how the metaverse can work for brands, but fundamentally advertisers shouldn’t forget that consumers will only interact with your content if it’s fun, engaging, useful or interesting. As with any marketing activity, focusing on the customer needs, desires and interests will help deliver meaningful metaverse content that people actively seek out. Be open to new intent signals, some of these could be subconscious so targeting and the data brands glean from customers in the metaverse will be very different.
Ascertain the value the metaverse can bring to your brand
It’s a new world, so it will take time to understand what kind of value can be extracted for brands. There is work to be done to define what ‘good’ looks like in the metaverse before you even start trying to tie back to overall commercial goals. There is danger of over investing in metaverse properties and creating a repeat of the 90s dot com bubble, however, a business that is too focused on assigning direct revenue to metaverse activities may struggle to get an initial foothold. Surround yourself with the right level of expertise and utilise the tools available in the market to take a balanced approach to testing, learning and understanding commercial value. We can draw value from many quarters; brands could start to champion how the metaverse improves credentials in the sustainability space for example: less wastage, try before you buy or digital versions of physical products.
Embrace innovation through braver plays
There are very few rules currently, and we are still years off identifying the ‘winners’ of the metaverse. Taking a brave approach to opportunities will ensure your brand gets on the forefront of this new wave of innovation and exciting next step in our connected world. Experiment with NFTs. Research with your customers to determine how the metaverse can create a better relationship with your brand or services that could move to virtual. Much like Arnie’s beloved blockbusters, taking a playful approach to the future will deliver the most interesting results.