Marketing and the metaverse

CMO takes a deep dive into the world of the metaverse, the brands innovating in this space and how you can start to build your strategy

It’s been described as the new age of the Internet. But what does the metaverse mean when it comes to your brand and your customer approach?

It was equity strategist at Investment Bank Jeffries, Simon Powell, who described the metaverse as “nothing less than the digitisation of human activity and the disruption of everything that hasn’t yet been disrupted”.

Add to this Bloomberg’s expectations the metaverse will be an US$800 million opportunity by 2024, the fact Facebook changed its parent company name to Meta and has already invested billions into R&D, and Microsoft’s belief the metaverse has the ability to stretch beyond the barriers and limitations of the physical world, and you get a sense of the profoundness of what we’re witnessing right now.

Just like cloud computing and social media before it, the ‘metaverse’ has become a concept and catchcry used to describe a mind-boggling array of immersive technologies, virtual worlds, digital currencies and ownership constructs and online behaviours.

“Just because you can’t easily define it, that doesn’t mean it’s not real,” 3arc by DBM executive director, Matthew Bond, tells CMO. “The metaverse is giving us an additional universe to live experiences in. It’s turning the Internet into an experiential realm, rather than a rewrite endeavour for us all. The metaverse is a term to describe a state, rather than just one thing.”

“Metaverse is an elusive, mysterious word that can conjure up different ideas and confusion,” agrees Be Media by Animoca Brands CEO, Jordan Fogarty. The digital marketing agency was acquired in April 2022 to help advance digital property partnerships and innovations around the open metaverse.

“The best way to describe this is a more immersive set of connected and different virtual worlds, accessed through AR [augmented reality] and VR [virtual reality]. Gaming is a huge part of this, and it’s a way to have that deeper engagement and reward. Another big component is NFTs [non-fungible tokens], which are a way to have digital property ownership in this next era,” Fogarty explains.

“There is also a huge community component to all aspects of metaverses. Utility and interoperability is a further key element. Interoperability is then about being able to take these assets through different games and experiences.”

The final element is the supply and demand characteristics of cryptocurrency and economic drivers in these environments, Fogarty says.   

Infosys AVP marketing for Australia, New Zealand and South East Asia, Wilhelmina Duyvestyn, sees the metaverse creating a unified, virtual community where we can work, play, relax, transact and socialise. Yet she argues metaverse is an evolution, not a revolution, noting key constructs like virtual economy, digital currency, mixed reality, blockchain, AI and 5G exist today.

Forrester defines the metaverse as the 3D experience layer of the Internet. Yet unlike the pack, the analyst firm doesn’t believe we have realised metaverse yet. “What exists today are ‘metaverse precursors’, which are standalone immersive platforms,” CMO lead and research director, Mike Proulx, explains.  

In Forrester’s explanation, metaverse precursors will evolve to a ‘primordial metaverse’, where links will let users go from one place to another, including separate creator worlds. The third phase is ‘federated metaverse’, where governance structures, values and other social structures vary but platforms adopt common systems for enabling and enforcing portability and persistent identity and property.

The opportunity for brands now is to be able to activate on any given number of standalone, immersive platforms, Proulx says.

“Depending on the brand’s objectives, they may be attracted to Web 3.0 enabled platforms, such as Decentraland or Sandbox. However, if the objective is more scale and reach, use of blockchain-based immersive platforms pales in comparison from a user standpoint.”

From a sector perspective, brands experimenting in the metaverse skew towards fashion, luxury and mainstream. It’s not surprising given identity and self-expression are huge parts of immersive spaces and platforms. Perhaps more surprisingly is how many traditional financial services brands are dabbling. HSBC’s partnership with Sandbox on a piece of virtual real estate sees it developing new experiences to engage and connect with sports, esports and gaming enthusiasts.

Over on Web 2.0 platforms, immersive activations integrate real products and services into core experiences. Ferrari’s activation in Fortnite, for instance, allowed players to drive its newest car. A wealth of brands are also adopting mixed reality tech like AR to bridge the physical-digital gap. Just look at Ikea’s Place, L’Oréal’s Modiface virtual try-on tool or Yahoo’s Future Art collaboration to turn digital artworks into 3D viewable experiences.

Another well-documented sporting example is from Tennis Australia, which built an experience in Decentraland to coincide with the 2022 Australian Open. This was complemented by 6776 pieces of generative art created for AO Art Ball collection. Each Art Ball’s metadata was linked to a plot on a physical court’s surface. If the winning shot from any AO match landed on that plot, the NFT owner could receive the tennis ball used in the championship point. Additionally, NFTs could be used to unlock limited edition wearables and AO merchandise.

There’s no doubt there’s a first-mover advantage to jumping into these spaces, with brands getting as much kudos for giving the metaverse a go as for what they’re actually doing. But FOMO is not a sustainable argument.

“Any NFT or metaverse project needs to start with this question: What is the community, why do they care and why would someone spend time with us?” Fogarty asks.

For Bond, the very first thing brands must do is actually take the metaverse seriously.

“We don’t know exactly how to grasp this opportunity yet, but someone will work it out. That could be your brand,” he says.

Want to know more about who’s in the metaverse, how to discern between platforms, brands innovating in this space and some tips and tricks on how to start to build your metaverse strategy?

Just login and you can check out CMO’s in-depth report into marketing in the metaverse in our digital edition, now available to download for readers here.

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