How should brands think about advertising in the metaverse?
The question is a little hard to answer when there’s no consensus about what exactly the metaverse is or what it might become.
You don’t need a headset, but you do. It’s like a video game, but not. Something about VR, but also something about AR. It’s an immersive virtual world. Scratch that – it’s multiple immersive virtual worlds that don’t talk to each other yet, but will.
In his 1993 cyberpunk novel, “Snow Crash,” author Neal Stephenson first coined the term “metaverse,” which he defined rather broadly as a world made out of code.
But certain brands and social platforms seem keen on defining it as a world where people will spend thousands of dollars to kit out their 3D avatars in luxury gear (just not pants, because there’s no point right now).
Meta recently introduced the Meta Avatars Store, where you can buy schmancy virtual apparel from the likes of Prada, Balenciaga and Thom Browne to dress up avatars on Facebook, Instagram and Messenger (but not VR, yet).
Mark Zuckerberg is betting that people will consider digital clothing to be an important form of personal expression, just as they do in their nonvirtual lives. Count me among the skeptics, although I don’t even like shopping in reality.
But there is precedent, as pointed out by Alex Kantrowitz, tech journalist and author of the Big Technology newsletter, on stage at the Collision conference in Toronto last week. Just look at Fortnite skins. And last year someone apparently spent $4,115 to buy a digital-only Gucci bag on Roblox, which is $800 more than the purse retails for in actual stores.
Bloomberg estimates the metaverse will be a nearly $800 billion market by 2024, and so the opportunity for brands to use it as a marketing platform is undeniable, said Gonzalo Brujó, global president at Interbrand Group, an Omnicom-owned consultancy.
“Are we ready? No. There is still a lot of innovation we need to do,” Brujó said. “But it can help you differentiate, be a more relevant brand and engage in different ways with your customers.”
To date, however, those “different ways” have mainly come in the form of one-off experiences, like the Wendy’s-themed Wendyverse in Horizon Worlds or branded NFTs. (“Why would anyone want a Burger King NFT?” Kantrowitz asked. Good question.)
But, cynicism – and multi-thousand-dollar virtual Gucci bags aside – the metaverse will take form at some point, like it or not, and brands are trying to figure out what their role should be, if any.
The tens if not hundreds of millions of dollars that companies spend on their physical retail experiences today will start to shift over toward digital interfaces and more metaverse-y (sorry, best word I can think of) experiences, Brujó said.
“Yes, the quality is not fantastic, but that is where clients will be in the long run,” he said. “The reality is, all brands around the world are thinking about where to go, but they need a strategy first.”
And, ideally, that strategy won’t involve a copy/paste job from Web2 over to Web3. There’s got to be some kind of a middle ground between luxury-branded gear that costs double what I made per month at my first job out of college and … display ads in the metaverse.
“I really hope it’s not billboards and banner ads – that would be a miss, just taking what we already know and not learning in any way,” said Amy Peck, CEO and founder of EndeavorVR, an AR and VR consulting firm.
“There can be an evolution in how we tell stories and bring brand experiences into this digital landscape,” Peck said.
For example, let’s move away from a traditional understanding of advertising and start thinking more about “a transparent value exchange for data,” she said.
Rather than spending billions of dollars to harvest data to understand someone’s behavior, why not just ask people for their data in exchange for some form of value, like early access to digital assets with a physical component, Peck suggested.
Sounds familiar. It’s the trusty old value exchange argument, but this time with nonfungible tokens. Wonder what a consent pop-up would look like in the metaverse?
Seems like the more things change, the more they stay the same.
