COVER STORY: Marketing in the metaverse

The immutable law of advertising is that money follows eyeballs. But right now the money is getting in early. According to McKinsey and Company, US$120 billion has rushed into metaverse investments in the first half of 2022. Investors have adopted Wayne Gretsly's famous maxim of skating to where the puck is going, not where it has been.

Your definition of metaverses determines the size of the opportunity. Meta which favours a model where meta writes the rules says it expects a billion users on metaverses by the end of the decade. Citi, which has a more expansive view of what a metaverse means says up to 5 billion consumers and an addressable market worth between $8 and $13 trillion dollars.

All those delicious consumer dollars waiting to be corralled, but where to begin? Marketing on the metaverse may seem like a daunting task but those who take advantage of the opportunities it brings will most likely see future success.

The metaverse already gives companies ample opportunities for brand building and marketing, as another McKinsey report explained.  

“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.”

According to KPMG, continued advancements and availability of assets such as augmented reality (AR) and virtual reality (VR) tech, coupled with evolving digital platforms will change the way products and services are developed and new ways for brands to engage with customers.

As Gen-Z will make up 30 percent of the workforce by 2030, marketers are looking to innovative, immersive technologies to capture and retain their attention.

For example, KPMG explains that brands are creating digital twins of shopfronts and head offices to foster more intuitive, immersive, and engaging environments. This enables brands to transition away from the traditional 2D e-commerce customer journey – to immersive virtual commerce.

Dr Mark van Rijmenam, author of Step into the Metaverse and future tech strategist spoke to Digital Nation Australia and said there are plenty of ways brands can benefit from the metaverse.

“The best way that I like to see this is that any organisation that wants to step into the metaverse, needs to take a different approach to reach out and connect with the consumers. Consumers who are already in the metaverse, they require a different approach,” he explained.

“They require an experience and I think any organisation that wants to interact with them should acknowledge that they should understand that if you want to deal with customers in the metaverse, you have to rethink your role as a brand owner.”

Van Rijmenam said this requires four steps, the first step is creating a unique virtual experience with low entry barriers.

The second step is connecting with customers, “It means that you need to connect with your customers so that they can participate with whatever you're doing here.

“A good example is Forever 21, an American apparel brand that created a Forever 21 shop city on Roblox, which allowed the players to create their own Forever 21 store, design their own clothes, sell their own clothes in their own store and make a bit of money off that,” he said.

Thirdly, brands should embrace innovation, “What is important if any brand that wants to do something in the metaverse is that they have to be very innovative and don't copy physical reality because in the end in the metaverse, the laws of physics wouldn't apply,” he explained.

Lastly, companies should celebrate and connect with their customers.

He said, “It means creating unique virtual experiences connecting with your customers at a location where they are, don't copy physical reality and celebrate your customers using NFTs and gamified rewards.

“If you are able to do that, then as a brand you can have a big impact and create loyal customers.”

An “undefined” space

From a marketing standpoint, the potential of the metaverse remains largely undefined according to Tania Mushtaq, a B2B specialist and regional marketing director, ANZ at Rimini Street, an enterprise IT business headquartered in Las Vegas.

She explained, “Although we cannot understand the full scope of opportunities it presents for brands just yet, there’s no shortage of speculation on how it may be leveraged to deliver business value.

“For example, while B2C marketers can turn to the metaverse for product placement, as well as immersive and spatial experiences, there will still be a limit to sensory experiences, such as smell and taste, that are critical for some B2C brands.”

Meanwhile, for B2B marketers – especially those in services industry – this may prove a bit more challenging since services are not tangible, Mushtaq said.

“This is where creating rich, engaging and interactive experiences as an alternative to real world is a possibility. For example, creating a virtual town for a local council that wants to see how its investments will deliver value for the citizens,” she noted.

“Content marketers may also be able to leverage NFTs to create differentiation against competitors vying for the same audiences. Having said that, the metaverse is still being built. As we gain more clarity into what this will actually look like, the opportunities it may offer will also become a lot clearer.”

Mushtaq added that the metaverse is not going to be seen as another channel but an evolution of digital, allowing new opportunities for marketers to recreate their message and brand personality to extremely targeted audiences with hyper-personalisation.

Opportunities

When marketing on the metaverse, brands are inundated with various opportunities and new ways to sell their brand.

According to Andrew Frank, distinguished VP at Gartner, “The metaverse provides economic opportunities using new digital business assets and value exchange models. Digital marketing leaders can connect their marketing strategy with digital business by exploring virtual world product development, brand placement, customer engagement and new revenue models.”

Van Rijmenam said the metaverse lets marketers be creative, think out of the box and build a strong community.

“The fact that you can create a system which if done well goes way beyond the traditional loyalty systems that we're familiar with. For those brands who truly embrace this and understand that you can do something really fantastic with this, it offers a tremendous opportunity.

“But you have to think carefully about it and you have to think outside the box in order to do something,” he said.

Carmen Bekker, partner-in-charge, KPMG Customer said the metaverse offers new methods to engage with customers in a fast developing medium.

She said, “For example, the Gucci Garden in Roblox, which was a set of brand-themed rooms that was timed to align with the launch of physical stores.

The metaverse also allows brands to test new product designs – L’Oreal for example has filed 17 patents for NFTs and the metaverse. It can also be an interesting virtual extension to loyalty programs, as Adidas demonstrated with the Bored Ape Yacht Club NFT release, which provided access to physical street wear drops.”

B2B and B2C brands can view the metaverse in separate ways according to Mushtaq.

“For B2C brands, where physical products or services such as concerts are being marketed, the target audience and therefore opportunity is incredibly broad. For instance, in the world of virtual reality (VR), product placement will provide powerful experiential differentiation,” she said.

“For B2B marketers, however, the pace of change in strategy may be prolonged as focus remains on avenues such as virtual events, which have been effective for two years, and earned a place as the new norm with virtual platforms now offering enhanced functionalities.”

Hurdles ahead

Mushtaq said marketers shouldn’t view the metaverse as just a money-maker to avoid their brands being shunned from digital communities.

“While there’s extraordinary amounts predicted to be invested into the metaverse, marketers will need to be calculated in engaging users to avoid much of the backlash that social media and content platforms experience (from over-promotion),” she said.

B2B marketers will face a bigger challenge in differentiating what already exists in terms of virtual experiences that exist today versus what they can create in the metaverse, Mushtaq said.

“However, for marketers, while the metaverse will provide significant opportunities to reach, connect and engage target audiences faster, it will be important to test, observe, refine, learn, optimise, and scale in order to ensure they are heading in the right direction as the metaverse matures. We don’t need to, and many likely won’t rush to jump into the deep end with their budgets,” she added.