The word metaverse has become an increasingly common term over the past year, with major tech companies investing millions of dollars in the production and development of this new technology. But what is the metaverse? And what does this mean for the future of marketing?
The metaverse is defined as an immersive digital environment populated by virtual avatars that represent real people. It is a self-contained, fully functional universe that contains user-generated content, is always-on, and exists in real time. Using a combination of Virtual Reality (VR) and Augmented Reality (AR), the Metaverse creates an integrated network of 3D worlds; a place parallel to the physical world, where you can spend your digital life.
Marketing in the Metaverse
Creating a virtual platform that everyone can access opens a huge door for companies and brands to market their products and services. The metaverse is still in the development phase, but brands are already stepping in the door and reaching out to consumers on this virtual platform.
The marketing mix is made up of four Ps: product, price, promotion and place. The metaverse offers new marketing space and new methods of promotion, so it’s no surprise that marketing teams around the world are excited to find their way there!
The metaverse allows you to create your own platform, by designing a universe dedicated to a brand’s products or services. This process requires a lot of time and research, as well as a significant financial investment, but has already proven itself with a multitude of brands.
Shopify, an e-commerce platform for online stores, held its 2022 summit inside the Metaverse. In partnership with Spotify and Uber Eats, users could buy goods, listen to music, and get real food delivered, all from inside the experience. Hosting a virtual convention exponentially increases the size of the potential audience compared to a physical event limited by location and available space.
The metaverse has opened up new opportunities for virtual collectibles, which have proven successful in the past through various online video games that allow players to purchase collectibles; direct-to-avatar sales of virtual goods represent a $54 billion market. Nike used this in the metaverse by creating a purpose-built metaverse space named Nikeland, using the Roblox platform. Users can purchase exclusive Nike digital products, which can be worn by their avatar and displayed in their own personal section of Nikeland. Since launching in November 2021, Nike has over 7 million users on the platform.
Native advertising is transferable to the metaverse, with billboards available to advertise on virtual roads, as well as product placement on the platform. There are also various sponsorship opportunities for sporting and musical events held in the metaverse.
Big brands like Coca-Cola and Samsung have already used advertising on this new platform. Coca-Cola launched a limited-edition drink inside the metaverse, and Samsung created a scavenger hunt on the platform where users played to win a Galaxy S22.
Virtual reality and augmented reality both open up a world of marketing opportunities for a variety of brands. By hosting products in the metaverse, users can see a virtual 3D model of the product before purchasing it. Hyundai has used this feature by creating a virtual Motorstudio on the platform, where users can experience different vehicle models, watch informative videos and purchase goods.
Augmented reality can benefit a host of brands selling products such as homewares and furniture as well as apparel companies. Augmented reality allows customers to “place” the piece of furniture in their home before buying it to ensure they like the style and that the product is sized appropriately. This also translates to clothing brands, where customers can use augmented reality to see themselves wearing the clothes before buying them.
The challenges of marketing within the metaverse
Accessibility is a huge challenge for brands looking to market within the metaverse. Currently, to access the Metaverse, a high spec computer with fast internet speeds is required, along with a VR headset for many virtual aspects. Not everyone has access to these expensive technologies, so not everyone will be able to access the metaverse immediately. Some consumers may be desperate to get their hands on the technology required to be able to immerse themselves in this new world, but others who may be more skeptical of the metaverse won’t be rushing to spend big bucks to make it happen – if your target consumer is most likely to adapt to the latter, the metaverse may not be the best direction to take your brand right now.
Many people remain skeptical of the Metaverse. Despite countless tech pros explaining why the concept is so much more than just a kids’ video game, many people can’t figure out how or why it could be more than that. It’s still very early days for the metaverse, it could be years before the general populace accepts this new market for what it really is. At least for now, mass marketing is definitely hampered in the metaverse due to the widespread mixed opinions.
The metaverse is free for everyone to access (with the right technology), and there is currently no regulatory authority for the platform. This is a huge concern for brands looking to promote within the metaverse, as you have no control over other user-generated content that appears alongside your brand, and you run the risk of virtual vandalism.
There are privacy and data security issues related to the deployment of the metaverse. New privacy and protection methods are being developed to adapt to this new environment, but the confidence we can place in this newly developed technology is currently unknown. It’s too early to tell if the Metaverse will have a set of security and privacy rules on each platform or if different countries will require their own regulations, although the latter seems the most likely. Depending on the outcome, marketers could be hit hard when trying to expand their reach internationally through the metaverse.
Another marketing challenge in the Metaverse is determining how to track performance, as traditional metrics cannot be directly translated as the Metaverse provides new marketing methods. It’s not a breach of contract, it’s just too early for marketers to know exactly how to approach this. Through calculated trial and error, it won’t take long for proper analytics to be mastered on this platform.
Is this the future of digital marketing?
Investors continue to pour money into the development of the platform at an incredible rate; by the first half of 2022, more than $120 billion had been invested in the development of metaverse technology and infrastructure. Popularity is growing and big brands are quickly becoming the first to use the platform for promotional purposes.
Not everyone agrees with the Metaverse, with many people totally opposed. While opinions of this nature will most likely change as the platform grows in popularity and popularity, I don’t see a world where everyone is using the metaverse to its fullest potential (except maybe 100 years from now) .
The Metaverse provides a new kind of platform, but it won’t replace traditional marketing methods, at least not for the foreseeable future. Not all businesses will benefit from what the metaverse has to offer, but others will. I think we’re going to start hearing an increasing number of brands spread across the metaverse, however, we’re not going to completely wipe out reality for a virtual release.
There is no clear answer as to whether this is the future – who knows? I would like to have a window on the future to see how far this can really go!