by Levi Matkins, CEO of LifeStreet
The metaverse is coming, whether we understand the hype behind it or not. The soon-to-be reality of merged digital and physical worlds becomes increasingly evident when we see companies like Niantic receive a $300 million investment to build the ‘Real-World Metaverse’ and key industry players like Microsoft, Meta, and Epic Games, building heavily towards this ‘hypothesized iteration of the Internet’.
The term metaverse has several definitions and even though it doesn’t fully exist, there is a shared conviction that combining virtual and physical reality will further humanize digital interactions that have been limited by their two dimensionality. As we have been acutely reminded by pandemic restrictions, personal interactions are important, especially when we are physically separated.
Spurred on by the Covid-19 pandemic, many thought that metaverse gaming platforms wouldn’t sustain their popularity as the world reopened. However, with Facebook’s announcement of its rebrand to Meta, and its concurrent pivot towards positioning themselves as metaverse pioneers, it comes as no surprise that investment and interest in metaverse gaming platforms have continued to grow at speed. According to Bloomberg, the global Metaverse revenue opportunity which was $500 billion in 2020, could approach $800 billion in 2024. Most likely, the metaverse will impact many, if not most, aspects of our lives, changing how we learn, work, shop, and advertise, as we devote increasing amounts of time and attention within it.
Why the hype around advertising in the metaverse?
While we have to take great care to avoid a dystopian future where more invasive personal data is collected to shape user behavior (it’s critical we as an industry learn from mistakes made in the past), the metaverse offers the opportunity for advertising to be embedded in our online lives to a greater degree than it currently is. For example, as the digital becomes more entangled with our physical world, it is likely we will see some form of shoppable reality. Shoppable TV already exists, with scannable QR codes appearing in ads. In the metaverse, however, we’ll be able to take this further to offer a fully connected experience. Imagine, the eye tracking in your AR glasses will register your interest in a product. From there, you’ll be able to order it with your connected bank card, and have it shipped, ready and waiting for you when you get home, thanks to having your address details input already. This interconnectedness also offers huge benefits for advertisers as easier processes facilitate purchases.
In much the same way that advertising dollars followed users’ attention from desktop onto mobile, we are likely to see budgets shift again as more people spend more time in the metaverse.
Today, we are seeing a glimpse of what the metaverse may become with games like Roblox, which had 47.3 million daily active users in Q3 2021. While the Covid-19 pandemic greatly contributed to the platform’s recent success, it’s projected longevity as a metaverse platform can be attributed to the variety of virtual social encounters Roblox offers beyond games. It’s a place where people hang out with friends and family, enjoy concerts, and actively participate in the Robolox community and economy. In 2020, over half of US kids under 16 played Roblox and for advertisers who want to reach the next generation of consumers, Gen-Z, advertisers anticipate that the metaverse is the next Internet space where we will find them.
So, how do you advertise in the metaverse?
Because the metaverse technically doesn’t exist yet, we can’t know if we will be living the kind of ‘reality plus’ championed by Niantic; a world of avatars where everyone has a custom or branded skin, like Fortnite; or an internet space where real estate is bought and sold, much as it is in the real world, as in Decentraland. But we do know that interactions will be richer, the possibilities endless, and user engagement entirely redefined. Brands can already connect with consumers via virtual showrooms, product demos, and exchange virtual goods for real money. And this is only the beginning.
While we do not know exactly what form engagement will take, we can, however, predict that the buying models will not change significantly from what we currently work with in the programmatic space. The same considerations that drive us now – transparency, brand safety, scale and efficiency – will continue to underpin our practices. Indeed, given that RTB (real-time buying) is already a key part of many advertisers’ programmatic strategies, it will likely remain a principal buying tool. As ad formats diversify and become more experience-based, my prediction is that existing gaming platforms are best suited for what will undoubtedly be the new Wild West of advertising as many games already have their own universes and community of players who are used to interacting with advertisers in bespoke environments.
What are the next steps?
As the metaverse evolves, marketers will have the opportunity to shape it to their advantage but in order to do so, they will need to ask themselves how they envision themselves fitting into the future, and what will be their brand’s metaverse experience. Building a metaverse marketing strategy will lean on many of the same principals that have guided other facets of advertising. If your audience is digitally savvy, you will need to adapt more quickly than legacy brands that can continue to connect with their audience through traditional media channels.
- Get to know the metaverse mindset. Take the time to understand your audience’s changing mindset between when they are playing games, shopping, hanging out with friends, watching a movie or working in the metaverse.
- Learn new platforms. When any new advertising strategy is employed, there will be a learning curve. Marketers who take the time to understand the culture and community of each metaverse and take the time to realize the full scope of advertising possibilities will see the greatest ROI.
- Start small and with something familiar. While replication of currently available formats – such as billboards – may work well as first steps and don’t hesitate to draw on past experiences to drive future practices.
- Be experimental and innovative. Marketers who will achieve the greatest success are those who will be able to innovate not only in their ad formats, but in the delivery of these ads. If programmatic has not been part of your marketing strategy, now could be a good time to start as programmatic continues to dominate digital advertising.
By keeping these principles in mind, marketers can enter the metaverse with a strategy that can underpin any campaign across any metaverse platform. As always, the most important consideration for marketers will be to balance the dichotomy of tailored content and privacy. As we transfer more and more of our lives into digital experiences, marketers need to build on the lessons learned in the Internet’s current iteration as a first step towards our brave new world.
