Demystifying the metaverse for brandsMay 4, 2022 | By Raja Rajamannar
Marketing is fundamentally about communicating, connecting, engaging and inspiring people — and convincing them to prefer your brand over others. To do this, you need to go to people where they are. When consumers were in front of the TV screens, we showed up there. When they moved to the internet, we reached them through that medium. Now, if consumers start spending time in virtual worlds — the metaverse — we need to be present there, too.
Every new medium requires adaptation. For example, you can’t just take the ads you’ve created in the current digital environment and slap them into the metaverse. Your presence needs to be native to the environment and be contextually relevant and appropriate to the audience.
Many companies have been venturing into the metaverse and there is a lot to observe and learn from them. You need to come up with your own playbook for your brand or company.
The way I think about how marketing can play in the metaverse is by looking at what we do today in the real world and then imagining how that can be adapted to and advanced into the metaverse. The huge difference between our current reality and metaverse is that there are no constraints in the latter — either physical or logical — that we have to deal with today in the physical world. That is very liberating in so many ways and can unleash creativity to a completely different level!
Another big difference: In the real world, we can do real multisensory marketing; while in the metaverse we are dealing with only the visual and audio senses — and some level of haptic. Interestingly, I find that testing and launching concepts in the metaverse are much more economical and the speed to market can be blazing!
Let’s look at various areas of marketing and how they can be deployed in the metaverse:
Consumer insights: Can we do focus groups in the metaverse? Yes — I have been in one and it was pretty interesting, albeit a bit clunky at times. But technology will improve and smoothen the experience. Can we follow the consumer journey (with their permission) and gain insights into their thinking? Yes. Algorithms are coming up that can help you do exactly that, particularly when the consumers are visiting your lounge, mall or arena in the metaverse.
Advertising: Many brands are already advertising in the metaverse, including high-end fashion brands such as Louis Vuitton. There are examples from simple, stationary and moving ads on virtual billboards to naming rights of virtual malls and stadiums. Brand logos are showing up on virtual clothing and accessories for avatars and sponsorships of virtual characters with branded skins. Balenciaga, for example, has an interesting integration of its branded accessories into Fortnite.
Product demos: Some hotel chains are allowing potential guests to virtually tour available hotel rooms and explore the views. By providing consumers with an immersive experience, you can get them excited and also let them know exactly what to expect once they arrive. Likewise, brands are coming up with demos of how certain physical products can be assembled, while seeing them work and giving consumers a “feel” for those products. IKEA has been using augmented reality to drop furniture from its catalog into your physical space to show you how your room looks with that furniture. Now this concept can be expanded dramatically as the metaverse advances.
Sales: Brands such as Nike have begun selling (and selling out!) virtual merchandise as non-fungible tokens. They also make real-world counterparts of these virtual items. They work beautifully in tandem. The appeal of this space is also extending to luxury fashion brands: Gucci, for example, sold a virtual handbag for the equivalent of about $4,000, more than the real-world price for a physical Gucci bag of the same model!
Engagement: Marketers have started on the path to consumer engagement in the metaverse in many ways. Brands such as LVMH have treasure hunts and Hyundai has mobility adventures. Live concerts are now big time with big names and offer sponsorship and engagement opportunities for brands. The scale of these concerts is much bigger compared to real-world events.
Creating/buying spaces: Several companies have announced that they are going to launch their own metaverses, including Disney. The Atlanta Braves have announced that it will be launching an MLB stadium in the metaverse. Virtual shopping malls are cropping up. Brands are buying land in Decentraland and creating their own presence, including Adidas. Even B2B brands like PwC bought land in Sandbox!
Marketers should also take a look at more speculative ventures, such as the buying and selling of virtual property. This may seem a bit silly to traditional marketers, but it is currently taking off in much the same way as regular real estate transactions. And if a brand acquires the naming rights for a virtual stadium in the metaverse — and it is attended by millions of consumers — how is that different from having the naming rights for a physical stadium? It’s the same concept, adapted to the new space where consumers are spending time — and that is good marketing.
We are on the verge of an entirely new dynamic. Marketers need to be aware so they can start planning and experimenting.
Long story short
As people begin spending more time in various virtual worlds, there will be a significant impact on brands and marketers.
Many will argue that the experience is still too clunky at this point in time to drive major change. And that’s probably right. Modern headsets are heavy and can even be nausea-inducing, but the technology is improving rapidly. Tech companies are working on slimmer, more sophisticated and more manageable interfaces. Instead of a massive headset on your face, you can have something light and easy that allows you to flip back and forth between physical and virtual reality with the touch of a button (or even without it!). Broad accessibility will come through a multiplicity of devices.
We are in the early stages of what will be a tremendous evolution in how we interact with our surroundings each and every day. It’s time that marketers really dive in and understand what possibilities exist, what talent is required, which tech stacks need investment, and what regulatory landmines could be ahead.
All in all, the metaverse represents a fascinating opportunity for creators, companies and consumers, and extraordinary scope for business and commerce.
About this blog
Marketing Sense is a blog series from Raja Rajamannar, Mastercard’s chief marketing and communications officer. Every month, Marketing Sense will bring you unique, original, relevant content to equip you with the knowledge that will keep you ahead of a rapidly changing industry. We’ll filter out the noise to focus on key marketing trends backed by new findings and support from thought leaders from across the trade.
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