While widespread metaverse adoption may take some time, top brands have rewritten the rules of marketing.
Discussion of the metaverse has been popular over the past few months.1 By 2021, Internet searches for the term have increased by 7,200 percent. In December, Facebook changed its name to Meta, and CEO Mark Zuckerberg stated his ambition was to “help bring the metaverse to life”. A month later, Microsoft said its proposed acquisition of gaming giant Activision provided “building blocks for the metaverse”.
It’s not just talking; Private capital is also rapidly pouring in. In 2021, metaverse-related companies reportedly raised $10 billion, more than double the previous year. Over the past 12 months, a single company — Epic Games, the makers of Fortnite — has not only raised $3 billion to fund its long-term vision for the metaverse, but also announced a partnership with LEGO to Build a supermarket for kids. The opportunity to create global value from the metaverse can run into the trillions.
What exactly is the metaverse? Currently, the stakeholders cannot agree on any definition. But most descriptions — including this particularly insightful one from venture capitalist Matthew Ball, who recently shared his thoughts on the promise of the metaverse with McKinsey — have a few things in common:
- Metamodels include immersive environments, often (but not always) using virtual or augmented reality technology.
- Metaverse is “always on” and exists in real time.
- The Metaverse spans the virtual and physical worlds, as well as multiple platforms.
- Metaverse is powered by a fully functioning virtual economy, often (but not always) built on cryptocurrencies, commodities, and digital assets, including non-existent tokens. usable (NFT).
- Metaverse allows people to have a virtual identity, presence, and “authority,” including peer-to-peer interactions, transactions, user-generated content, and “world building.”
We believe the metaverse is best described as an evolution of the internet today — it’s something we immerse ourselves in instead of something we look at. It can realize the promise of a vast digital world that will parallel our physical world. For marketers, the metaverse represents an opportunity to engage consumers in entirely new ways while driving internal competence and brand innovation in new directions.
Now is the right time to adopt an experimental and learning mindset, be open to experimenting in the metaverse and move fast from failure and capitalize on success.
We continue to see a large amount of skepticism about the metaverse and companies may want to exercise caution, as the promise can take a while to catch up with the hype. But we believe we are on the cusp of a fundamental change in the way people use the Internet.
Marketers will be disqualified if they don’t start exploring what the metaverse can offer. Now is the right time to adopt an experiment and learn mindset, be open to experimentation and move fast from failure and capitalize on success.
Rewrite the rules of marketing for the metaverse
We may still be in the first wave of consumers with the metaverse, but lessons have emerged from companies that achieved early success. In some ways, the key elements of marketing in the metaverse resemble the design elements of authentic and engaging brand experiences in the real world. But the application of these elements in the metaverse can be very different. As approaches to driving value online continue to evolve, effective consumer engagement in the metaverse will require its own evolving formula for success.
Here’s what this landscape looks like today and how organizations can think about their integrated marketing strategies for the future.
Define your metaverse marketing goals. Why do you want to be part of the metaverse? If your brand’s consumers are there, do you want to increase awareness among new audiences, position your brand and generate goodwill or promote loyalty? Is your goal to spark innovation in your marketing team? In the short term, the primary goal of brands should not be to directly drive sales, as sales of virtual items are still much smaller than physical sales. Moreover, today’s multilateral audience, especially on online entertainment platforms like Roblox, is often more skewed towards the younger generation, which presents both opportunities and risks.
Identify the platforms that offer the best opportunities and fit the brand. Currently, Roblox, Fortnite, Decentraland, Minecraft, and Meta Worlds Horizon are just a few of the existing metaverse games and platforms. Some will be better than others for specific purposes. There are plenty of opportunities to experiment with multiple platforms to see what works. For example, luxury brand Gucci conducted a variety of branding activities to figure out where and how to connect with Gen Z. Last year, it attracted 19.9 million visitors in two weeks when it launched its version. metaverse of Gucci Garden in the real world on Roblox. Gucci has also partnered with fashion-focused hyper-focused Zepeto, which has announced plans to launch virtual worlds on blockchain-based platform The Sandbox and create content for games including The Sims, Pokémon GO, and Animal Crossing. .
Design experiences that appeal to your target audience. Consumers tend to view brands in the metaverse as creative, so the standard for delivering a creative experience is very high. Companies need to determine the ideal balance between native advertising, immersive experiences (including games, virtual stores, events, and sponsorships) and real-world activities to complement the metaverse. Take, for example, what skateboard retailer Vans did last fall when it launched its “Vans World” interactive skate park on Roblox. To build brand awareness and appeal to the company’s core demographic, Vans allowed visitors to virtually explore skating sites with friends. Visitors can also earn points through the game to spend on virtual sneakers and apparel items, as well as build custom skateboards in a virtual skate shop. This has successfully attracted both existing and new fans — and has had more than 48 million unique visitors to date.
Consumers tend to view brands in the metaverse as creative, so the standard for delivering a creative experience is very high.
Experiment with monetization models. Direct selling may not be at the heart of the metaverse right now, but that doesn’t mean brands shouldn’t think ahead and plan to capture future potential. Avatar direct selling is already a $54 billion market, and a number of futurist brands are experimenting with different opportunities to generate revenue. For example, Forever 21 sells a beanie at Roblox for under a dollar. On the other end of the scale, last year Gucci sold a digital version of its Dionysus bag for $4,115 – well above the price of a physical item itself. Nike is experimenting with unique NFTs with the recent release of the Nike Cryptokicks (a virtual Nike Dunk sneaker), designed by creative studio RTFKT,
Just as converting online to offline sales is the norm today, we can also expect to see more opportunities from converting to offline in the future. In April, Chipotle announced it was the first brand to allow Roblox players to exchange digital currency for real-life rewards by offering burritos vouchers to the first 30,000 guests to its metaverse restaurant.
Create, leverage, and collaborate for new metaverse abilities. For the metaverse, as for any new business venture, brands should assess the skills they will need, determine what skills they already have and what they must acquire, and point to them. Designate someone to lead the development and implementation of a coherent strategy for capturing value. Brands should also aim to collaborate with and learn from others, including the independent creator and developer communities active on these platforms.
For example, Roblox has hundreds of thousands of people in the developer community who are actively developing a variety of experiences and learning how to monetize them. Last November, NASCAR teamed up with Badimo, the developer of the popular Roblox game Jailbreak, to add a branded vehicle to the game for a 10-day event. During that time, gamers accessed the Jailbreak 24 million times — a 30% increase over the number of concurrent players. Advertising, branding and marketing agencies are also rapidly rolling out new service models and super diverse capabilities, including their own virtual studios.
Furthermore, celebrities and influencers are increasingly attaching their names to super-reverse initiatives. In some cases, they are deeply involved in the actual creation of new immersive vehicles for the metaverse. For example, last year rapper Snoop Dogg built his own “Snoopverse” in The Sandbox. A few months later, he released his first music video entirely in the metaverse. “The House I Built,” like previous Snoop Dogg videos, features scenes of dancing, swimming poolside, and driving nice cars. But this time, it’s his digital twin enjoying the lifestyle.
Proactively plan for brand risks. There are many warning examples of brands putting themselves at risk by interacting directly with consumers online without preparing for the rounds. the rapid response of the internet or the potential virality of social media. In the metaverse, the risk can be higher, as these events take place in real time and are more immersive. Brands would do well to establish ground rules of engagement — such as detailed and enforceable policies they can follow — for customer experience, intellectual property management, user safety, data security and misinformation. In some cases, things didn’t go as planned.
Rethink how you measure marketing success. Measuring return on marketing spend is always important, but the right metrics for the metaverse may not be what you expect. Digital marketing often focuses on metrics like number of visitors, conversions, “likes” and shares, and the cost of acquiring customers. With the metaverse, marketers may need to identify new engagement metrics that take into account unique behavioral economics at play (such as NFT’s “scarcity”, which is supposed to be unique). For example, online food delivery company Deliveroo has implemented virtual drivers to make virtual deliveries in Nintendo’s popular Animal Crossing game, including promo codes to activate in real life. During the first hours of play,
With the metaverse, marketers may need to identify new engagement metrics that take into account the unique behavioral economics at hand.
Read carefully but surely
Clearly, the metaverse has given companies plenty of opportunities for branding and marketing. Current technology limitations and modest mainstream adoption are unlikely to be major obstacles to experimenting, learning, and finding success with marketing in the metaverse.
A few questions will shape its long-term development. Marketers should be aware of these as they shift their marketing focus and budget to the metaverse:
- How will interoperability or the ability to televise digital representation and cross-world content work in the metaverse? What does that mean for brands that offer digital assets, such as virtual clothing, today?
- How will the social contract and legal framework for the metaverse evolve? How to ensure the safety of users, especially for teenagers? Sensitivities around marketing to minors have always existed, but as generational shifts occur, they become more concentrated in the metaverse. What additional responsibilities should brands take on for children’s 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 advance their own understanding of consumers, especially in a cookie-free world?
Regardless of how the metaverse evolves, innovation and consumer adoption are likely to increase rapidly. When you consider how quickly platforms are evolving and new use cases emerge, it’s clear that brands will have an incentive to keep experimenting and learning. Marketers will also be required to secure the talent needed to keep pace with rapid new developments in areas such as virtual and augmented reality, consumer journey analytics, and social commerce. .
Finally, the metaverse has great potential in the future beyond marketing. To create value across the enterprise, companies must take the time to think about the potential strategic impacts of the metaverse on sales, operations, manufacturing, R&D, and HR. Organizations and brands that plan and execute now will benefit most from the future of the metaverse.
Reference source: McKinsey