What Is the Metaverse and Why It Matters for Brands
What Is the Metaverse and Why It Matters for Brands
One defining word of 2022 has been ‘metaverse’. It was originally the name of a fictional 3D VR world in Neal Stephenson’s 1992 dystopian novel Snow Crash but since Facebook changed its name and declared a mission to bring the metaverse into reality late last year, the term ‘metaverse’ has taken on new meaning. Many brands and SMBs have been left questioning, what is the metaverse and why should it matter to us?
What is the metaverse
The metaverse currently only exists theoretically and in the early stages of its fruition. It is considered to be a future evolution of technology comparable to the dawn of the internet, whereby an unlimited number of users have access to a vast and interconnected network of real-time rendered 3D virtual worlds.
In order to qualify as a metaverse this virtual universe must continue indefinitely, give each user an individual sense of presence, as well as be synchronous, interoperable and an experience spanning across both digital and physical spaces.
Technologies that will make up the metaverse include:
VR or Virtual Reality - the use of technology such as head-mounted displays and handsets i.e. the Oculus Quest, to create a simulated environment with which a person can interact.
AR or Augmented Reality - the simulation of artificial objects in real-world spaces using computer generated visual information i.e. filters and effects on Instagram Stories
IoT or the Internet of Things - ‘smart’ devices that create an information sharing network without needing human involvement i.e. Fitbits and Amazon Echo
Web3 - a decentralised, autonomous and open third generation of the internet where each user has ownership of and compensation for their data, and doesn’t need permission from a central authority to post.
NFTs or non-fungible tokens - digital assets which are given unique and non-interchangeable units of data to establish proof of ownership.
Cryptocurrency - digital currencies that use encryption rather than bank verification to verify transactions.
Blockchain - a peer-to-peer decentralised network where transactions are publicly recorded in chronological order and maintained across several computers, acting as a digital ledger for transactions, certificates and contracts.
Why it matters for brands
The metaverse matters for brands because getting ahead of the curve allows you to seize more opportunities when they arise. Being a new technological advancement which consumers are drawn to, many are drawing parallels between the VR worlds that are emerging now and the early emergence of social media platforms. With Hubspot writing:
‘It's important to remember that the metaverse is getting both the same hype and skepticism as social media did when MySpace and Facebook began to launch. In a world where technology is quickly evolving and improving, what's not accessible to all today will be used by most people in the future.’
Entertainment and gaming companies are currently leading the way in the metaverse, with brands like Roblox reporting almost 50 million users and a revenue growth of 108% to over $1.9 billion in 2021. But they aren’t the only ones seeing massive profits, fashion brands like Nike have seen success in sales of luxury virtual goods as NFTs and in advertising immersive experiences. Other retail brands like Coca-Cola, Hyundai, Selfridges have followed suit, using VR experiences and NFTs to build brand awareness and demand in metaverse spaces.
The metaverse has potential as a powerful marketing tool. Not all brands will find metaverse opportunities viable at this stage, as testing out marketing strategies even in these early stages can be expensive and target audiences may not align with the metaverse yet, however it’s definitely worth having an awareness of the marketing opportunities available for brands in the metaverse.
Ways to utilise the metaverse as a brand
Current metaverse spaces include Meta’s Horizon Worlds, The SandBox and Decentraland. The latter two are free to access, decentralised, virtual spaces where users can play and create games, as well as buying and selling NFTs and NFT real estate. In all three worlds it’s possible to host virtual events.
Opportunities for brand marketing in these metaverse spaces include:
Hosting or sponsoring virtual events
Investing in influencer or community marketing of users in order to build brand awareness
Creating branded games, avatar fashion, shops or locations
Buying advertising space in high traffic virtual locations
How to get started with the metaverse as a brand
The best way to begin a metaverse strategy as a brand is to consider where the metaverse lies as a priority for your consumers. If your consumer demographic is younger, they’re more likely to have an interest in the metaverse, which means there’s a greater opportunity for your business - your timeline for investing in the metaverse should adjust accordingly.
An initial investment should be in knowledge. Whether you decide to hire a metaverse marketing expert to consult or take the route of independent research, it’s important to learn all you can about the market, its technologies, its opportunities and how your competitors and consumers are using it. Then you can go on to make the most informed decisions for your business, ones which are most likely to pay off.