Metaverse: An Opportunity for Innovation in MarketingJune 2022
Talks about the metaverse have become quite common lately. Facebook’s changing its name to Meta and Microsoft’s acquisition of the game giant Activision drew attention to the metaverse. Internet searches related to Metaverse increased by 7200 percent.
Not only is it talked about, but the investments made by companies in the metaverse also draw attention. Fortnite maker Epic Games has committed $3 billion to fund its long-term vision for the metaverse and has partnered with LEGO with the dream of building a metaverse for kids.
So what is the Metaverse?
It cannot be said that a common definition of the metaverse, which we discussed in our March blog post, is agreed upon. If we consider the common points of the definitions, we can list the properties of the metaverse as follows:
- The metaverse encompasses immersive environments, often (but not always) using virtual- or augmented-reality technology.
- The metaverse is “always on” and exists in real time.
- The metaverse spans the virtual and physical worlds, as well as multiple platforms.
- The metaverse is powered by a fully functioning virtual economy, often (but not always) built on cryptocurrency and digital goods and assets, including nonfungible tokens (NFTs).
We can describe the Metaverse as the evolution of today’s internet. It can fulfill the promise of vast digital worlds parallel to our physical world. For marketers, the metaverse represents an opportunity to engage with consumers in new ways while pushing brand innovation in new directions.
How will the metaverse exist in our lives?
Just as some people were prejudiced against the internet in the 1990s, the same is true of the metaverse today. In addition, although it is not known which company will lead the metaverse technology revolution, consumers show serious interest. This interest shown by people actually shows that there has been a great change in the way technology is used. If the metaverse is the next version of the internet, marketers should not remain indifferent to a technology that consumers are so interested in.
Metaverse will be even more effective from today to tomorrow and will shape many areas as a permanent power. We can support this view with six items.
- Constantly evolving technologically:Although there are still deficiencies in technical equipment, technological developments are made continuously. Visual designs of virtual universes are being developed, a serious increase in connection speed will be seen with 5G, and the connection of mobile devices will be strengthened.
- Big investments are being made in metaverse infrastructure: Many companies are increasing their investments in the metaverse. For example, in 2021 Meta invested $10 billion.
- It promises a wider usage area: Playing games on Metaverse attracts everyone, but it is constantly evolving to offer experience in different areas (retail, entertainment, sports, etc.).
- Online commerce is changing dimensions: The virtual goods economy continues to grow. The connection between the virtual universe and the real universe is getting stronger, the scenarios of shopping in the virtual universe and ordering the real universe are getting stronger.
- The wind of demographic change is blowing: Especially those who are in their twenties, the so-called Z generation, are rapidly adapting to the metaverse. They are more familiar with virtual worlds than the previous generation.
- Brand marketing and engagement is more consumer driven: Individual creators have gained a significant market over the past five years. A significant portion of the innovative and engaging experiences for this shifting metaverse will likely come from these creator users
Rewriting the rules of Marketing with Metaverse
We may be at the beginning of consumer interaction with Metaverse, but we see that some brands have already achieved success. Although the critical elements of marketing in the metaverse are similar to those of the physical universe, the implementation part can be very different. As approaches to online value creation continue to evolve, active consumer engagement in the metaverse will play a key role in success.
Consumers tend to see brands in the metaverse as innovative, so the bar for delivering innovative experiences is high.
So, what should brands pay attention to when determining their marketing strategy in the metaverse?
- Define your metaverse marketing goals
- Design experiences appealing to target audiences
- Experiment with money-making models
- Create, leverage, and partner for new metaverse capabilities
- Proactively plan for risks to the brand
- Rethink how you measure marketing success
With the metaverse, marketers may need to define new engagement metrics accounting for the unique behavioral economics at play.
Tread carefully but firmly
Clearly, the metaverse already gives companies ample opportunities for brand building and marketing. The current technological limits and modest level of mainstream adoption are not likely to be major obstacles for experimenting, learning, and finding success with marketing in the metaverse.
A few questions will shape its longer-term evolution. Marketers should be aware of these as they shift their focus and marketing budgets to the metaverse:
- How will interoperability, or the ability to transfer digital avatars and assets across multiple worlds, work in the metaverse? What implications does that have for brands offering digital assets, such as virtual clothing, today?
- How will the social contract and legal framework for the metaverse evolve? How will user safety be ensured, particularly for youth? Sensitivities around marketing to minors have always existed, but as generational shifts occur, they come into sharper focus in the metaverse. What additional responsibilities should brands take on for child safety?
- How will first-party consumer data be stored, managed, and protected? How will data privacy laws apply to the metaverse in the future? And how can brands secure consent and source data to enhance their own consumer insights, especially in a world without cookies?
No matter how the metaverse evolves, levels of innovation and consumer adoption will probably accelerate. When you consider how quickly platforms are evolving and the new use cases emerging, it’s clear that brands will have incentives to go on testing and learning. It will also be imperative for marketers to secure the talent required to keep up with rapid new developments in areas such as augmented and virtual reality, consumer journey analytics, and social commerce.
Finally, the metaverse has great future potential beyond marketing. To create value throughout the enterprise, companies must take the time to think through the potential strategic implications of the metaverse for sales, operations, production, R&D, and HR. Organizations and brands that plan and execute now will benefit most from the future of the metaverse.