The metaverse encompasses immersive environments, often using virtual or augmented-reality technology. Powered by a fully functioning virtual economy, it is usually built on cryptocurrency and digital goods and assets, including NFTs (non-fungible tokens). The space enables users to have virtual identities, a presence, and agency, which includes peer-to-peer interactions, transactions, user-generated content, and world-building. It would be best characterized as an evolution of the internet, but it is something we are immersed in instead of something we just look at.
Although the widespread adoption of the metaverse might take some time, leading brands have already rewritten the rules of marketing. This virtual realm may realize the promise of vast digital worlds that parallel our physical one. It represents an opportunity for marketers to engage consumers in completely new ways while moving internal capabilities and brand innovation in entirely new directions.
Rewriting The Rules Of Marketing In The Metaverse
In 2021, metaverse-related companies raised more than $10 billion, more than twice the amount reported in 2020. In the past 12 months, Epic Games, maker of Fortnite, has raised $3 billion to fund its long-term vision for the metaverse. They also announced a new partnership with LEGO to build a metaverse for children. The global value creation opportunity the metaverse offers could be in the trillions.
Although we may still be in the first wave of consumer engagement in the metaverse, lessons are already emerging from various companies that have found early success. Let’s take a look at some of their strategies.
Define Your Marketing Goals
Identify the platforms providing the best opportunity and brand fit. There are ample opportunities to experiment with multiple platforms and see what works. For example, the luxury brand Gucci conducted multiple brand activations to figure out where and how to connect with the demographic Gen Z. Last year, it had 19.9 million visitors in two weeks after it launched a metaverse version of the real-world Gucci Garden on Roblox. As well as Gucci partnering with the fashion-focused metaverse Zepeto, the brand also announced plans to launch a virtual world on The Sandbox. It has created assets for games, including The Sims, Pokémon GO, and Animal Crossing.
Design Experiences Appealing To The Target Audience
Companies must determine the ideal balance between native advertising, immersive experiences (such as games, virtual stores, sponsorships, and events), and real-world activations to complement the metaverse. For example, when the skateboarding retailer Vans launched the interactive skatepark “Vans World” on the platform Roblox to build brand awareness and appeal to their core demographic, they enabled visitors to virtually explore skating sites with friends. Visitors can earn points through gameplay to spend on virtual sneakers and other items, or to build customized skateboards in the virtual skate shop. It has successfully engaged existing and new fans and has seen over 48 million visitors so far.
Experiment With Money-making Models
Direct sales might not be front and center in the metaverse right now, but that doesn’t mean brands can’t think ahead and make plans to capture the future potential. Direct-to-avatar sales of virtual goods is already a $54 billion market. Some forward-thinking brands are testing different opportunities for generating revenue. Forever sells a beanie in Roblox for less than a dollar. On the other end of the scale, Gucci’s digital Dionysus bag was sold for $4,115 last year, which is more than the price of the physical bag itself. Nike is testing out unique NFTs with its release of Nike Cryptokicks (a virtual model of the Nike Dunk sneakers), designed by the creative studio RTFKT (which Nike acquired in December).
Just like the online-to-offline sales conversions have become the norm, we should expect to see more metaverse-to-offline opportunities in the near future. In April, Chipotle claimed they were the first brand to allow Roblox players to exchange digital currency for real-life rewards with its offer of vouchers for burritos to the first 30,000 visitors to the metaverse restaurant.
Create, Leverage, And Partner
For the metaverse, as with any new venture, brands should assess the skills they will need and identify which they already have and which they must acquire. They should also appoint someone to lead the development and execution of a coherent strategy to capture value and aim to work with and learn from others, including independent developer and creator communities active on the platforms already.
Celebrities and influencers have increasingly attached their names to metaverse initiatives, and in some cases, they’re deeply involved with the creation of new immersive media for the metaverse. Last year, the rapper Snoop Dogg built his own “Snoopverse” in The Sandbox. He went on to release the first music video that takes place entirely within the metaverse called “The House I Built”. Like previous Snoop Dogg videos, it features dancing, hanging out by the poolside, and driving fancy cars. But this time, it’s the digital Snoop Dogg enjoying the lifestyle.
Proactively Plan For Risks To Your Brand
There are many examples of brands exposing themselves to risk by engaging with consumers online without preparation for the rapid feedback loops of the internet, and sometimes further damaging, the potential virality of social media. In the metaverse, these risks can be even higher because events are live in real-time and more immersive. Brands should establish basic rules of engagement for customer experience, data privacy, intellectual-property management, user safety, and misinformation. Already, in some cases, things didn’t quite go to plan. A global electronics brand that launched a new line of products with great fanfare on its metaverse venue was left with disappointed fans who had trouble gaining access and had to form a virtual queue to enter the venue. In the metaverse, marketers may also need to define new engagement metrics to account for the unique behavioral economics at play.
Tread Carefully But Firmly
Clearly, the metaverse gives companies ample opportunities for brand building and marketing. Technological limits and a modest level of mainstream adoption shouldn’t be major obstacles to experimenting, learning, and finding success marketing in the metaverse. No matter how it evolves, levels of innovation and consumer adoption will probably accelerate. Considering how quickly platforms are currently evolving and the new use cases emerging, brands will have incentives to go on testing and learning.
It is imperative for marketers to secure the talent they need to keep up with the rapid new developments in areas such as virtual and augmented reality, social commerce, and also consumer journey analytics.
The metaverse has great potential beyond marketing. To create value throughout the enterprise, brands must take the time to think about the potential strategic implications of sales, operations, production, R&D, and HR in the space. Organizations and brands that plan well and execute now will likely benefit most from the future of the metaverse.