Opportunities and challenges of marketing in the metaverse
If you follow me on my social media channels, you may have noticed that I have been posting some pieces about marketing and CX in the metaverse for the past weeks. Check my blog for other posts if you’re as intrigued by the phenomena as I am. Today, I want to write about the opportunities and challenges of the metaverse, in the hope of helping you reap the benefits when you start experimenting with it.
I want to start with the opportunities first, because I really do believe that the metaverse has great potential for brands to offer a better, richer and more immersive experience to their customers.
First mover advantage
In a new space, with not many brands participating, you can have the luxury of the first mover advantage. Though that concept may be more complex than it first seems – timing is everything and sometimes being too soon can be a disadvantage too – I believe that in this case it will pay off to start experimenting with CX and marketing in the metaverse. Just think about what being the first online bookstore has meant for Amazon? Maybe just start with something small – like an advertisement banner in an e-sports game – just to get the feeling of it and start to understand how it works. Experimenting will allow you to really grasp what the real possibilities are.
Interesting cross-channel mix
It’s important for brand recognition and overall accessibility that brands are present on all the channels that are relevant to their customers. If a new channel pops up, offering the possibility for a whole new audience, it’s a bad idea to ignore it. If consumers can’t find you in the metaverse, chances are that they might desert you on the other channels too.
Plus, when it comes to cross-channel customer experience, the richer the mix, the richer the experience and that is exactly what you want for your customers. You could use AR in store to share in-depth information, display additional features and use cases, etc. or combine a live event with a metaverse counterpart. Gucci for instance opened the two-week virtual experience Gucci Garden on Roblox in combination with a real-world installation called the Gucci Garden Archetypes, which took place in Italy.
Laws of physics don’t apply
Thank God for the laws of physics in this world. But just think of the sheer creativity that their absence in the metaverse could unleash. The sky is absolutely not the limit there. You could allow your customers to fly, float through space, morph into eccentric avatars, walk in buildings without ceilings (like in the Gucci Garden) and allow so many things that are not possible in real life. Disney World is one of my favorite places because of their mastery of storytelling. Well, the metaverse is a Disney-like place on steroids. Use all of its possibilities. Don’t just stick to replicating the ‘boring’ real world.
It’s still pretty affordable
Seeing that branding, marketing and advertising in the metaverse are so new, prices to run a campaign are still pretty affordable. Obviously it depends on what you’re willing to do there. If you’re going to build a world from scratch like the Hyundai Mobility Adventure in Roblox, featuring five different themed parks, you’ll obviously need to invest a lot of money (which, by comparison will still be a lot less than building 5 physical themed parks, of course). But investing in virtual billboards within video games like Football Manager and Hyper Scape – like Coca-Cola, Samsung, and Volkswagen have – will indeed be a lot less pricey than the IRL alternative.
Also, events in virtual locations will have less impact on the bottom line than real ones. You can cut costs on employee travel and lodgings, rent or energy consumption.
Reaching new audiences
If your brand wants to keep reaching Gen Z, Millennials and even Gen X, you will need to follow them on their channels of choice. The younger the generation, for instance, the likelier they are to play games. Around 81% of Gen Z gamers, for instance, reported playing games in the past six months, spending an average of 7 hours and 20 minutes on the pastime per week. As an example: 67% of Roblox’s demographic fall below the age of 16. So it makes a lot of sense that brands are manifesting themselves in metaverse games like Roblox and Fortnite to reach them.
A limitless scale
One of the big advantages of experiences in the metaverse is a scale that IRL events cannot possibly match. Just to give an example, the game Roblox has 200 million active users, who spent $319 million on in-game currency in just the second quarter of 2020 while Fortnite has 350 million players across the globe. And yes, these numbers are nothing compared to those of let’s say Facebook’s 2.92 billion monthly active users. Then again, the latter’s count of global daily active users was recently reported to decline for the first time ever. Not much compared to the total (1 million), but it proves that people are starting to look at other channels to satisfy their needs. Add to that the fact that Meta’s also heavily investing in the metaverse, and you’ll definitely see early warning signs of a change.
Just to compare the scale of music events: the record for biggest concert attendance ever is held by Vasco Rossi (225,173 in 2017) for a ticketed concert and Rod Stewart (3.5 million in 1994) and Jean-Michel Jarre (3.5 million in 1997) for a free concert. In July 2020, 45.8 million people watched Travis Scott’s Astronomical Tour in Fortnite.
Going beyond the product
Things that are for sale in the metaverse often com in the form of an NFT. For those who don’t know what an NFT or non-fungible token is, it’s a record on a cryptocurrency’s blockchain that represents a piece of digital media. Non-fungible means that it is a unique digital piece and that it cannot be replaced with something else. NFTs are often used as collectibles: an example is Mike Winklemann’s aka Beeple’s piece of art titled ‘Everydays – The First 5000 Days’ which was sold for USD 69.3 million at a Christie’s auction on 11 March 2021.
This collectibles part is probably a bit of a hype, but the huge potential here is that NFTs hold the promise to deeply change the game in customer loyalty. That’s because they can offer smart contracts, which could play an important role in boosting customer engagement. And we are seeing quite a few early warning signs of that. Kings of Leon, for instance, were the first band to release an album as an NFT and their tokens – also including 18 unique-looking “golden tickets” – unlock special perks like limited-edition vinyl and front row seats to future concerts.
It’s the combination of a fully immersive VR and AR experience with the fact that all products have the potential to add a service in the form of an NFT contract, that seems very exciting to me.
But every new technology and platform also have their drawbacks, which are important to think about as well. Even Meta’s Mark Zuckerberg recently admitted that it could take up several years for the main features of the metaverse to become mainstream.
Not yet enough VR and AR headset owners
First of all, even though the scale of for instance events and concerts is a lot bigger in the metaverse, the total of consumers who own the infrastructure – VR and AR headsets and even an internet connection – to enter them is still significantly lower than those of them who can’t. Mid 2021, 26 million VR and AR headsets were owned by private consumers. Even if experts believe that demand for VR headsets will increase almost eight-fold within the next five years (up to 2025), that number still pales in comparison to the total number of smartphones: according to Statista, the current number of smartphone users in the world today is 6.648 billion (83.89% of the world’s population). If the metaverse will want to enable some breakthrough changes, the scale of global users has to rise to the numbers of the smartphone.
A flawed Customer Experience
The VR and AR experience is currently far from frictionless, which obviously also explains (next to the affordability) why the adoption described above is still pretty underwhelming. Users of virtual reality games have reported harmful side-effects such as damage to their vision, disorientation, and even seizures. Another challenge lies in having high-quality and high-performance models that can achieve the right retina display and pixel density for a realistic virtual immersion. And let’s not forget the fact that most headsets are still quite bulky, heavy and therefore too uncomfortable to wear for a long time.
Rethink narratives in three dimensions
We are so used to developing stories for non-immersive environments like video and podcasts, that we’ll need to learn how to tell stories differently in the metaverse. Tech futurist and Metaverse strategist, Cathy Hackl, has warned brands that they “will need to rethink their narratives in three dimensions” if they want to become successful.
Also, metaverse marketing might be largely driven by creators as users can be both developers and players. Brands will need to re-examine their own positioning, from the narrator of the story to the co-creator of the story. For example, they may buy land and build communities in some virtual communities, but the stories in the communities are generated by player interaction. The challenge of brands is to keep playing a part and stay visible – beyond just being a ‘dumb pipe’ – in that story which they cannot completely control themselves.
Measuring is hard
Last but not least, though some believe that it is only a matter of time before the metrics catch up, the measurement and tracking we’re used to with other marketing tactics isn’t there yet. That’s obviously an issue for determining the return-on-investment. If brands are not able to track return on ad spend as clearly as other digital channels, their marketers might find it difficult to justify what they spend over there. According to Natalia Vasilyeva, VP of marketing at Anzu “Some [brands] are cautious because of the inability to measure everything from A-Z”. But her stance is that “the early days of social media were not perfect” either and that “you can’t expect the new medium to be perfect in terms of everything.”
So these are the challenges and opportunities of the metaverse that I see. Do you think I missed important ones? Let me know in the comments of my social channels.
The original article was posted here.