Marketing in the Metaverse | INCAE Business School

Marketing in the Metaverse

May 17 2022
Diego Ramos

Technology has been growing and changing rapidly: the Marketing in the Metaverse is a clear example of it. We are seeing innovations that were previously unimaginable. One of these innovations for many people includes the metaverse, a unique immersive virtual environment that is rapidly taking over the internet. You may have first seen it in sci-fi movies like Ready Player One or The Matrix series, but now it's more than fiction.

With the continued rise of virtual reality (VR) and augmented reality (AR), the metaverses are taking over the internet. While the Metaverse isn't quite what science fiction has portrayed, it still continues to produce unimaginable value as a new computing platform.

On the one hand, the mainstream media seems to agree. Forbes even started a column with Cathy Hackl, a renowned technological futurist and strategist of the metaverse. More than that, there is an existing fund called Metaverse Investment Fund ATF (NYSE: META). All of this points to the growing importance of the metaverses at this time.

And consumers seem to be catching up. The keyword “metaverse” produces 677.000 results on Google. Meanwhile, the #metaverse hashtag is widely used on Instagram, with more than 60,000 posts on the social media platform and being tweeted more than 500 times per hour on Twitter.

Now, what are its implications when it comes to social media, PR, and digital marketing? Here, we dive deep into this virtual universe.

Understanding the Metaverse

Today, the metaverse involves a shared virtual space where users are represented by virtual avatars. These virtual worlds continue to evolve and grow based on user decisions and interactions within the space. It reflects the real world in the sense that it has no "end". It's just a universe that continues to expand as more and more users come in.

It is not just a simple virtual theme park where the layout is centrally planned; neither is it a simple game exclusively for the enjoyment of children. It's also not a simple app that you can download from the app store and "play" at your convenience.

Metaverses are virtual universes that merge reality and the virtual world.

If you find it a bit difficult to understand, here are the key features:

  • Always active. Metaverses don't stop when you leave them, nor do they end. They simply continue indefinitely.
  • It exists in real time. The metaverse has a timeline that syncs up with real-world time.
  • Players have individuality. Players can be doing separate activities at the same time. One could just stand in the corner while others interact with each other.
  • Autonomous and fully functioning universe. The metaverse is a fully functioning universe that allows users to create, own, sell, and invest. Users can also be recognized and rewarded for the work they do in the metaverse.
  • Mix of different platforms. Different platforms can work together in the metaverse. For example, in the case of video games, you should be able to carry items from one game to another.
  • User Generated Content. Metaverses are more than just virtual spaces for users to hang out. Users can create content that other users can also enjoy.

Marketing in the Metaverse

Digital marketers need to keep up with the latest technological developments. This includes understanding the metaverse and its full potential. What marketers need to understand is that the metaverse isn't just a fad; It seems that it is here to stay and is making its way to become the next big thing.

How can marketers adapt as this metaverse expands?

First, marketers need to consider the value of millennials and Gen Z's as a target market. These generations are also avid users of some forms of metaverses, in games like Roblox and technologies like VR. With that in mind, let's explore how marketing can be done in the metaverse.

Marketing in the metaverse parallels real-life marketing

Create marketing experiences that tie into real-world experiences or parallel what your brand already does in real life. For example, AB InBev's beer brand Stella Artois worked with Zed Run in June to create a Tamagotchi-like experience crossed with the Kentucky Derby. They did this because AB InBev's Stella Artois is a big sponsor of sporting events, particularly horse racing. Therefore, creating an online platform where non-fungible tokens (NFTs) are traded, raced and bred horses seems like a natural entry point for them.

Marketing in the metaverse

Immersive experience is key

You can offer virtual advertising in the metaverse. For example, Bidstack, a video game ad tech company, went from working on real-world outdoor advertising to placing ads on virtual billboards.

However, you can go beyond virtual billboards. Since metaverses are experiential and immersive in nature, it's best to take advantage of this by offering the same immersive experience with your ads and marketing initiatives. Offer branded installations and events that users can interact with, rather than just placing ads.

We've seen pioneers offer immersive experiences to their users, such as a Lil Nas X concert on Roblox, visits to the Gucci Garden experience, and the virtual rendition of the Washington Heights neighborhood as part of Warner Bros. promotion. Brands have discovered recently new sources of income through collaborations with the Roblox metaverse and other metaverses.

Make collectibles available

People like to collect things, and the metaverse is yet another space to show your interests. You can make the same experience available in the metaverse by offering limited edition assets or items that can only be collected in the metaverse.

For example, the Gucci Garden experience in Roblox offers The Collector's Room. Allows people to collect limited Gucci items in the metaverse. Gucci, from its initial sales of collectible items, collected 286,000,000 Robux from the game.

Interact with existing communities

Generally, people oppose advertising. So as brands try to penetrate the metaverse, it's important not to show up and upset people who are already there. More than that, you will need positive reception from these users as you will be trying to market to them.

Remember that you cannot just enter a new platform without taking into account the new format. On Roblox, for example, brands get more traction when they partner with members of the Roblox developer community to create items and experiences. Similarly, when O2 held a concert on Fortnite, they partnered with creators who were already experts on the Fortnite platform.

Think of these as influencer campaigns. User-generated content is important, so community members become an integral part of running your campaigns.

continually experiment

It's an exciting time for marketers. While there are guiding principles that could inform what kinds of strategies and tactics marketers can do, the metaverse is still a generally new platform that offers plenty of room for experimentation. The best practices have not yet been properly established and the paradigms have not yet been fully and comprehensively created. This gives marketers a lot of room to try to be unique and experimental in their approaches.

The future is in the metaverses

Now, many companies are investing in metaverses. They are betting on it, not only for entertainment purposes, but also for business and professional purposes.

For example, the largest social media platform, Facebook, sees itself as a metaverse company of the future. Mark Zuckerberg focuses on building social metaverses and investing in Oculus, Facebook's AR and VR technologies. In August 2021, Zuckerberg unveiled a work metaverse for Oculus that allows people to work together, sit in a conference room, and interact as if they were in an office. This is the perfect time as more and more offices are switching to work from home.

More than Facebook, Silicon Valley in general has been busy betting on metaverses as the next generation of the internet. There are also many games currently incorporating metaverse-like elements into their platforms. For example, Fortnite and Animal Crossing allow concerts in their game.

On top of that, HTC is making its way towards business-based VR technology, rather than consumer-based. This is a sign that VR technology is slowly becoming more than just entertainment.

If all of the above hasn't already convinced you, then perhaps this will: People are buying up real estate in the metaverse, particularly on Earth 2. Now, that's a strong indication that technology is here to stay.

Challenges in the metaverse

The metaverse promises an exciting future for brands, but there are still some challenges to overcome along the way.

For one thing, while metaverses are gaining in popularity, they can still use some more traction. Due to the technological requirements of the metaverses, accessibility is an issue for them. Not everyone has access to the necessary devices to enjoy the metaverse, such as high-end computers and virtual reality glasses. This greatly limits the potential market for brands and hampers mass marketing efforts.

Brands should also be careful when navigating the metaverses. Seamless integration is crucial to avoid driving players away from the brand. Because the technology is new, brands may still struggle to find their proper place in the metaverse and their messaging may be too direct. Plan your placements well and make sure it feels natural and well integrated into the metaverse.

There are also a lot of misunderstandings around metaverses. People often think of them as a simple game for children. Not everyone understands the value of metaverses, so brands risk not being taken seriously for their efforts to establish a presence within these platforms.

Data privacy and security remain a challenge in the metaverse. With new technology comes the need for more evolved security measures. This requires building new methods of privacy and data protection where there were none. For example, personal verification may require more data from users, increasing data privacy risks.

Lastly, because metaverses are free to everyone, brands need to be careful about protecting their image. The more control users have in a metaverse, the more likely your brand will appear alongside questionable content. There is also the risk of users destroying or disrespecting their locations. This is why it is important to be fluid, conscious and precise with your marketing strategies so that users can feel good about sharing the virtual space with you and interacting with you there.

Ultimately, metaverses offer a promising future for computing and the Internet. Furthermore, they offer plenty of room for innovations for both marketers and advertisers. Despite these challenges, the opportunity to be experimental, provide an immersive experience, and be innovative wins.

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