By Alisa Martell
What is the Metaverse?
Technology grows and shifts at a rapid pace. We’re starting to see innovations that were previously unimaginable. One of these innovations includes metaverses—unique, immersive, virtual reality environments that are accessed with the use of a VR headset or goggles—and they’re starting to take over the internet. Popular metaverses include Second Life, Roblox, IMVU, and Meta’s Horizon.
The keyword “metaverse” yields 677,000 results on Google and the hashtag #metaverse is used all across Instagram, with more than 60,000 posts. The hashtag is tweeted more than 500 times an hour on Twitter.
So, what does the future of virtual reality look like for consumers, businesses, and marketers?
Immersion is Key
Companies like Gucci, Nike, and Adidas have all taken a shot at immersive experiences using virtual reality.
Gucci announced its presence on metaverse platform, Roblox to sell digital handbags in its Gucci Garden Exhibition. Soon after the original sale, scalpers resold the digital merchandise for exorbitant prices. One of these coveted bags sold for $4,115, a price $800 higher than the bag’s value in the real world. Gucci made a profit of about $3.5 million from their initial sale of these virtual collectibles.
Nike also took the leap into the metaverse and created their digital marketing hub, Nikeland in Roblox. Nikeland offers players access to exclusive games and their digital showroom, where they can organically navigate the company’s range of shoes, apparel, and accessories. This organic approach allowed Nike to reach over 6.7 million Nikeland visitors since its launch in November of 2021, which has translated into real-world sales.
Adidas partnered with VR agency Somewhere Else to follow the mountain-climbing journey of two elite athletes. Viewers were able to follow the climbers through the entire process and put themselves in the shoes of world-class alpinists. This experiential style allowed Adidas to market its line of outdoor apparel in a way that stuck in consumers’ minds, in part, because it wasn’t just about consumer goods. Adidas’ marketing strategy was successful because they offered consumers more than just a product, they offered entertainment and intangible value.
Digital Marketing in the Metaverse
First, marketers need to keep in mind the value of millennials and Gen Z as their main target audiences. The brands that cater to these demographics will need to adapt to the metaverse faster than others.
Early advertising in the metaverse will mostly consist of virtual reality billboards. They’re easy to design and insert into existing apps. Sponsored content, ie social media feeds with sponsored and organic content, will come on the scene next. As metaverses develop their own proprietary ad formats, they will also develop full marketing attribution and tracking analysis.
The biggest advantage for marketers in the metaverse will be the ability to offer immersive, interactive experiences for their consumers that integrate their brand story with consumers’ purchasing experience.
Marketers will face some challenges as the metaverse evolves. Because the metaverse is decentralized, companies will have to grapple with blurred branding boundaries. Virtual reality billboards could be vandalized or distorted or the billboards could be placed in problematic contexts within these virtual worlds.
Companies may also be faced with the challenge of replicating products in real life. Product engagement could fall if brands fail to deliver similar experiences in the real world due to hyper-customization in virtual reality and high consumer expectations.
Sensory overload is another issue that marketers may face. The metaverse is far more intrusive than the digital world in its current form. Data privacy and other ethical issues will inevitably arise. Will advertisers have the ability to target ads based on the appearance and properties of consumers’ avatars in metaverses? Do individuals consent to targeted ads because they choose to upload an avatar? The development of metaverses necessitates new methods of data privacy and security. In their current form, metaverses do not have the security infrastructure in place.
Businesses are Betting Big on the Metaverse
Consumers are not only collecting items in the metaverse – they’re making big purchases, like real estate. Digital real estate company, Republic Realm recently announced the purchase of a $4.3 million plot in the Sandbox metaverse. Another Sandbox user paid $400,000 to be Snoop Dogg’s neighbor within the platform. This is an indication that the metaverse is not just a passing trend. An early presence in the metaverse gives businesses the advantage over businesses late to the game. Early adopters will have a stronger, more personal relationship with their customers and have a better understanding of how to ethically navigate the metaverse as it evolves.