In this opinion piece Dan Young, managing director of Pulse, explores what the metaverse means for marketers.
It’s almost 30 years since Neal Stephenson wrote about the metaverse in his dystopian novel Snow Crash. This was a convergence of the physical and digital worlds in a persistent, shared online space.
Titles like Fortnite and Minecraft have built on this concept, offering fans somewhere to hang out with friends, play games and buy stuff. The virtual goods economy is now a $US50 billion market. It could also become somewhere we go to work, which gets more appealing every day with Sydney now in its sixth week of lockdown.
It’s no surprise that big tech has latched onto the metaverse, with Facebook CEO Mark Zuckerberg and Microsoft CEO Satya Nadella both using the term in their most recent earnings calls. Zuck went all in, announcing a five-year plan for Facebook to become a metaverse company. He described it as “an embodied internet that you’re inside of rather than just looking at”.
Buying in the metaverse
People sit up and take notice when a trillion-dollar company makes a commitment like this, but the metaverse is already a significant category with a selection of virtual worlds that offer varying levels of sophistication and completeness. They attract large audiences buying virtual goods and experiences with their own digital currencies and economies.
Decentraland is one of these worlds. It’s been described as a next generation social platform where people can acquire and control digital assets in the form of non-fungible tokens (NFTs).
This 3D virtual reality platform is powered by blockchain and administered by a decentralised autonomous organisation (DAO), which owns the most important assets and a substantial portion of MANA, the Decentraland currency. The property boom is real here, with prices for a single parcel of land (a non-fungible token or NFT) increasing from $20 to upwards of $6,000.
Brands are investing in this virtual world. Sotheby’s acquired an area of land and then hosted an auction for NFT artworks in Decentraland. Coca-Cola recently auctioned off NFT collectibles to commemorate International Friendship Day and BOSON, a blockchain protocol, spent $US700,000 on a plot of land to establish a shopping mall.
Roblox is another world within the metaverse. Many of the games here lack a clear objective because the point is simply to be present with your real-world friends. It’s a virtual form of existing, hanging out and consumption.
Roblox has a larger user community than Decentraland. With more than 40 million daily active users, it attracts serious interest from brands, entertainers and creators keen to tap into the Gen Z audiences spending freely on the platform. Users invested $US1.9 billion ($AU2.6 billion) in its Robux currency in 2020 on virtual goods, game credits and developer tools.
Gucci is one of the first major luxury brands to partner with Roblox. Fans can choose from a range of clothing and accessories to enhance their avatar including a Gucci GG Marmont bag for 425 Robux. Brand integrations extend beyond digital objectives, with the Gucci Garden experience, Roblox users could immerse in an experience which celebrated their individuality and the fashion house’s creative vision.
Fortnite offers a range of brand integration opportunities. With 350 million users, it’s one of the hottest metaverse worlds for brands to play in. Fans can purchase custom skins from high-profile labels like Nike, NFL and Marvel, or attend virtual concerts featuring the likes of Marshmello and Travis Scott. Araina Grande was the latest performer to feature in a Fortnite event.
Tomorrow’s digital economy
The metaverse is a new frontier for brand engagement that will eventually become a completely alternative reality. In the novel Snow Crash, some humans chose the metaverse over the real world plugging themselves in permanently.
The metaverse can be a frightening prospect but it is perhaps an inevitable destination for the digital economy, offering huge potential to improve access and create new markets. User numbers will increase as the enabling technology matures and experiences improve. The mainstream will follow younger audiences and creators into the metaverse, a now familiar pathway for social platform growth.
Aspirational brands like Gucci and Nike will find it relatively easy to translate their resonance and social currency into the virtual world. Commodity, low-involvement and non-aspirational brands will find converting real-world value more difficult. These brands need to find ways to play a meaningful role in culture or consider brand extensions and sponsorships.
Brands can treat the metaverse as a discreet sandpit to experiment in. At least for now. It will eventually spawn its own native brands, some of which will morph into the real world and present a challenge to established logos. Wherever and however brands choose to show up in the metaverse, winning will require joined up strategies that connect virtual and physical touchpoints.
The metaverse brings new meaning to the idea of integration and is a new place for brands to consider in their marketing mix.
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