Aussie startup invests big in immersive tech to realise the promise of the metaverse

For a concept no one seems confident to define, the metaverse is proving incredibly costly, with McKinsey estimating in June more than US$177 billion had been sunk into it since 2021.

Many of those investments will never see a return. But for those organisations who invest wisely, there is always the hope the upsides will be significant. This is certainly the hope of Trent Clews-de Castella and his team at a Melbourne-based immersive technology startup, Phoria.

The company was recently called into the spotlight by Meta CEO, Mark Zuckerberg, at the Meta Connect conference, which showcased Phoria’s Spatial Fusion, an extended reality (XR) platform that merges digital information into the real world and can run in a standard browser without specialist headsets or other technology.

"We created it as a showcase to demonstrate to brands what's now possible in this XR space," Clews-de Castella tells CMO. "When you build something over the immersive Web, you can actually reach many devices and surfaces, not just a VR headset."

While concepts behind XR, such as augmented reality (AR) overlays, have been in existence for some time, Clews-de Castella says what makes them relevant now is improvements in the technology that underpins them, and the broader understanding among marketers they can be used for more than just advertising purposes.

"Content software is evolving to be more experiential, and so with that you can imagine a lot of brands can extend beyond the screen and create campaigns and messages and product interactions that ultimately just feel more real," Clews-de Castella. "What we have built with Spatial Fusion is really just a sign of things to come. The kind of paradigm we are shifting through now is that if you can see 'it' in mixed reality, in your space, at scale, in first-person, then it is going to feel more realistic and contextual.

"That is what we keep coming back to with mixed reality – context. It is a connection to the product or the place you are in, in a way that drives a sense of presence and a realistic lived experience."

Unlike some metaverse proponents who have been gushing in their predictions, Clews-de Castella has taken a more measured tone regarding how it might reshape consumer behaviour.

"We don’t think the metaverse is going to replace the same experience of physically being there. But I think it is the next best thing, and you can unlock new capabilities you couldn't do in the real world," Clews-de Castella says. "It is going to be faster and easier to go and buy shoes on Nike's website than it would in the metaverse store. But I think the experience I would have in the Nike metaverse store would be one-of-a-kind in comparison to the any Nike store I can go to in the real world."

Phoria has been having numerous discussions with numerous brands about the use of immersive headsets for full 3D virtual experiences. Yet for Clews-de Castella, this is only one part of what the metaverse will offer, and one that will work best in specific implementations such as physical location-based activations.

"The metaverse is just an evolution of the internet, it doesn’t necessarily need to be Second Life," he says. "It's just the same way that we consume and share content and information, but more experientially, three-dimensionally and immersively.

"New standards mean you can deliver really high-quality content effectively and scale to billions of devices – not just headsets. If you are running a campaign, you should be thinking of XR, because it is actually an extension of the same work that is already underway."

Clews-de Castella points to brands such as Nike and Balenciaga, which are creating differentiation within crowded markets through investing in campaigns using XR concepts. However, unlike with some traditional channels, he says XR campaigns tend to work best when they are based around an experience, and this is enabling brands to have a different kind of conversation with customers.

"It is values-led, rather than about the value proposition of a product," Clews-de Castella says. "We hope that brands will want to create more experiences that have a tangible value and utility, and so that is going to be a fun space for us to explore and experiment in."

Augmented installations with Mecca

Phoria already has an extensive history inXR projects, including a 2017 installation in conjunction with the City of Melbourne and IBM which transformed Melbourne laneways using augmented reality (AR).

Clews-de Castella says Phoria has also worked on multiple AR activations with the beauty products retailer, Mecca, including one which involved the National Gallery of Victoria and the creation of AR filters for Instagram which showcased original artwork by the Chinese-Australian artist, Louise Zhang.

"We have more in store that haven't completely spun up yet for public sharing," Clews-de Castella says. "Mecca is a great partner – they really focus on creating fun and engaging experiences through deep collaboration with artists. It's been a wonderful journey working with them these last few years."

He says Mecca also represents a brand taking the possibilities of XR to heart to have different engagements with customers.

"We have been doing a lot with Mecca in this space – not just for make-up in extended reality, but around their brand values, and how they can reach a wider audience and connect with people beyond the sales pitch," Clews-de Castella says. "That is the space that we feel is more authentic."

Whether XR provides the platform through which brands can forge more meaningful long terms relationships remains to be seen, but through continued development of Spatial Fusion, Clews-de Castella hopes to be able to open new possibilities.

"The space for us is about exploring, experimenting, and understanding mixed realty and the utility that it can provide, and then hopefully harnessing that to create experiences that have a positive impact on the user - and as a by-product of that, then on to the planet," he adds.

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