Advertise in the Metaverse? It’s Complicated.

If the metaverse becomes a place where billions of real people interact and have expendable currencies, brands will leverage experiences to drive consumers down a purchase funnel, just as they do in the physical world. But how that ecosystem of brand/advertiser, media and consumer take shape is still in flux. Our SVP of Marketing Christian Jones has some things to consider when jumping in.

Advertise in the Metaverse? It’s Complicated.

If you’re confused about the metaverse — what it is, how it’s changing the way people interact with each other and brands, whether marketers can create value from metaverse ads, etc. — you’re not alone. The metaverse is still taking shape, and the long-term implications of ephemeral or persistent virtual worlds that can be accessed via augmented reality (AR), virtual reality (VR), mixed reality (MR) or even a humble browser (via platforms like Decentraland or Roblox) are as yet unknown.

A recent article in Wired compared today’s discussions about the metaverse to people talking about the internet in the 1970s. The pieces of a new way to interact are coming together, and it has massive implications for society and enormous commercial potential, but we’re not sure what final form it will take. Personally, I think of the metaverse as “XR”, not as a catchall for AR, VR or MR but instead as “extended reality”. In the metaverse, we’ll interact as virtual extensions of ourselves in some form, human or otherwise.

Marketers are curious about the potential of the metaverse, and some are frantically trying to get up to speed due to fear of missing out. Since the metaverse is still taking shape, it makes sense for marketers to watch closely and understand the factors that may influence its direction. How might the metaverse emerge and what could it mean for brand building and marketing now and in the future?

Driving Virtual Consumers Down a Real Purchase Funnel

If the metaverse becomes a place where extensions of billions of real people interact and have expendable currency — whether via in-world crypto, tokens or offline official government currency accessible via digital wallets — brands will have an opportunity to use advertising and/or curated experiences to drive consumers down a purchase funnel, just as they do in the physical world. But how that ecosystem of brand/advertiser, media and consumer take shape in the metaverse is still in flux.

In the physical world, the mechanics of advertising are well known. We’re familiar with ad units by channel, and we can calculate how much those units or impressions will cost and factor in the value of an impression in terms of meeting critical KPIs. That’s not to suggest it’s simple — the real world ecosystem is fractured and constantly in flux, but it’s knowable, manageable and familiar too.

But in an entirely new world, how do we value a new set of ad units or XR engagements? Audiences are often anonymous, and demographics are potentially inscrutable. Is the person behind the avatar a 63-year-old professor or a high school sophomore? We don’t know, so how can a brand or advertiser measure value? Non-fungible tokens (NFTs), which provide proof of ownership of a digital asset, are forming the connecting bridge, for the moment at least.

NFTs function as a talisman for brands, a way to engage virtual audiences and confer status on NFT holders. Brands like Stella Artois, Papa John’s, Acura, the NBA and many others are experimenting with NFTs, some to promote products or provide product functionality, others to highlight good causes and support charitable work. AdAge keeps a continually updated list of how brands are using NFTs.

Another way brands connect with virtual consumers is by creating experiences on platforms like Roblox. At Nikeland on Roblox, one of the earlier, high-profile brand entries in 2021, users could dress their avatars in branded sneakers and apparel, play games and unlock sports superpowers. Branded virtual apparel as a digital commodity is a straightforward implementation. Gucci just upped their profile from Gucci Garden to Gucci Town – dropping virtual bags and apparel within limited-time windows to style your Roblox avatar. Other recent brand implementations include a McLaren F1 Racing experience and a Chipotle Burrito Builder event – the possibilities are staggering.

The Value Conundrum

As these examples illustrate, major brands are already betting on the metaverse, and their participation generally falls on one of two tracks. The first is brand integration, like the user experience strategy Nike, Gucci, Hyundai or Chipotle have pursued on Roblox. Users can interact with the brand, hopefully developing an affinity of lasting duration that extends to the brand’s products in the physical world.

The second track is to create NFTs and associated content, placing assets in virtual storefronts or other digital venues and marketplaces. This strategy requires finding a way to create scarcity because virtual land and digital content like NFTs are valuable in proportion to their perceived authenticity and ability to generate demand that exceeds supply. As Scott Galloway observed “credible scarcity and authenticity will unlock real value in digital markets”.

So, the question remains: what is the value of a potential customer interacting with an avatar brand representative in your virtual apparel showroom? What’s the value of out-of-home signage for your virtual showroom if placed on a plot of land adjacent to Snoop Dogg’s virtual plot? How much will it cost to design and build a truly immersive virtual brand environment, and what’s the return on that investment?

The truth is, we just don’t know yet. It’s not a coincidence that most of the brands now active in the metaverse are there to drive awareness rather than conversions, at least so far. The metaverse may develop in unexpected ways, so for marketers who want to get their digital feet wet, now is a good time to watch closely, drop into some virtual worlds and interact with whoever is there now. Just like traveling to a new country in the physical world, take some time to observe with an open mind and respect the local customs of that corner of the metaverse. It’s complicated, but then again, isn’t any new world?

16 Ideas Agencies Can Use To Tap Into The Power Of The Metaverse

The metaverse is being talked about everywhere you look lately, and yet many consumers aren’t quite sure what it is. The truth is, not even its creators know what it will become eventually—many moving parts are constantly evolving, which opens up some exciting opportunities for agencies seeking new avenues to reach target audiences.

Forbes Agency Council

When an agency is among the first to embrace a new technology or platform, it can learn a lot about how to best leverage that innovation to meet its clients’ goals; however, compared to its late-adopter competitors, it also has a shorter on-ramp before audiences see what their efforts have produced. Here, 16 members of Forbes Agency Council offer exciting and creative ideas an agency can use to ensure any brand activation crafted expressly for the metaverse provides a memorable customer touch point

1. Build Creative That Is Personalized

Based on user profiles, agencies can target individuals with unique content. For example, an agency can retarget a client that has purchased a product already with a custom coupon code that is unique to them for future purchases. Using interactive ad units in the metaverse, the agency can design a personalized ad for this purchaser. – Geoff Crain, Kingstar Media

2. Bridge Digital And Physical Worlds

For me, it would need to be an activation that bridges digital and physical, as the jury is still out on the metaverse and its potential. Given the sectors in which we work, a music event would work. For example, take a well-known festival to the metaverse and then create a pop-up at that same real-life festival where people can enter the metaverse while at the actual event. – Jules Herd, Five in a Boat

3. Create Immersive VR Experiences

To move beyond other early adopters, agencies should find ways to surprise and delight where the real world and metaverse meet, such as a virtual reality test drive at a car dealership that immerses the client in an exciting driving experience. Or, imagine a family vehicle where kids get their own VR headsets and can choose different soundtracks and scenery for virtual rides while their parents listen to the sales pitch. – John Dutton, Camden Advertising

4. Craft Digital Apparel For Avatars

Digital clothing and footwear for metaverse avatars is an area that fashion brands can run campaigns around. This could be a new skin in Fortnite or custom accessories that can be purchased in Roblox. – James Ross, Hype Partners

5. Elevate A Core Aspect Of The Brand Experience

The most effective brands are focusing on a core aspect of their brand experience and then extending it in ways that elevate it—whether that’s hosting a virtual sports event, creating an immersive storytelling and virtual showroom or setting up shop in already-established virtual worlds. All of the best metaverse examples have two common threads: confidence in the experience and meaning in the value exchange. – Bryan Specht, Salient Global

6. Do Brand Education And Build Consumer Loyalty

There’s an enormous opportunity to do brand education and build consumer loyalty in the metaverse. For example, spirits brands can take consumers on a tour of their distilleries, offer cocktail-mixing classes and provide access to invite-only panel discussions with the brand’s founders for superfans or non-fungible token owners. The metaverse is in its infancy, and we’re just beginning to uncover its possibilities. – Kim Lawton, Enthuse Marketing

7. Consider Adopting Extended Reality Experiences

Before overhauling your digital strategy, start with a building block toward the metaverse: Consider adopting extended reality (XR) experiences, such as virtual makeup try-on tools or floor model shopping. Combining the virtual with something more tangible will provide a memorable experience for your customers and add an engaging aspect to your retail and e-commerce space. – Lars Lehne, Incubeta

8. Showcase Talent In Gated Brand Zones

Create a branded experience in the metaverse with talent, such as a musical artist performing live on a given date, thus generating user engagement. Another way is to create gated brand zones with exclusive content, drops and more, which can only be accessed with specific NFTs that act as entry passes for customers. This requires the brand to have an NFT collection, however. – William Soulier, Talent Village

9. Build Community And Activate Connections

Brands should look at the metaverse as an extension of their community-building efforts (events, groups, chats and so on) to foster connections between consumers and their brand mission. Activations could include concerts, speaker series and NFTs that link real-world products with metaverse skins (clothing, cars, products, etc.) as a way for people to represent who they are in the metaverse. – JP Johl, AdTribute

10. Offer ‘Digital Twins, But Better’

If you offer a product in real life, offer a special code for a digital version—but break limitations with the metaverse version. If you encounter a consumer through the digital version, offer a code for real-life engagement, such as an in-store experience or product purchase. – Hamutal Schieber, Schieber Research

11. Foster Unique Interactions That Bring Consumers Together

Instead of looking at the metaverse as a digital extension of experiential marketing, brands should be thinking of it as an extension of apps such as Discord or Reddit: a place to foster unique interactions that bring their consumers together. For example, imagine a phone brand connecting strangers and asking them to overcome challenges together in a virtual reality using everything but their voices. – Mike Popowski, Dagger

12. Provide Unique Value Aligned With Core Brand Values

Brands should worry less about what is “exciting” and more about what is relevant and authentic. In the short term, brands may generate attention from the still-nascent metaverse by just being there. But ultimately, if the experience doesn’t align with core brand values, consumers will see through it. Instead, imagine how your brand can provide unique value in this new environment. – Matt Miller, X-FCTR

13. Build Trending Elements Into Your Brand Experience

Before entering the metaverse, it is key for advertisers to know their audience and create experiences relevant to that audience. Then, consider what other types of games or experiences your audience is engaging with now. For example, socializing or playing with other gamers live is a popular experience. Building these elements into your branded experience could lead to success. – Donna Robinson, Collective Measures

14. Exchange Actions For Tangible Products Or Services

The metaverse has vast potential for brand and consumer interaction. However, especially in these early stages, companies must ensure that human connections can be made within the metaverse. There must at least be some action taken within the metaverse that results in a tangible product or service being delivered to the consumer afterward so that a memorable link is made. – Jessica Hawthorne-Castro, Hawthorne LLC

15. Create An ‘Up Close And Personal’ Consumer Experience

We work in agriculture, and consumers are increasingly interested in where their food comes from. The metaverse is a great place to create an “on-farm” experience. Consumers can get “up close and personal” by using a robotic milking machine, harvesting apples or growing their own corn. Brands can then put those NFT apples, milk and corn flakes up for sale. – Sara Steever, Paulsen

16. Design ‘Liminal Spaces’ To Turn Processes Into Journeys

Design “liminal spaces” that convert average processes into exciting journeys by focusing on the job customers are trying to achieve. By creating these thresholds, you can make people feel as if they are on the precipice of their physical location while facing a virtual extension of the world. Liminal spaces can deliver physical, emotional or metaphorical experiences that help consumers connect with the brand. – Rodolfo Salazar, iDigital Studios