Mind Your Metaverse FOMO

In this guest post, The Pistol’s strategy director Shaunn Anderson (lead image), argues that no one understands the metaverse now, but, he argues, they will when it goes mainstream and brands need to be readying themselves…

An old interview with Bill Gates from 1995 resurfaced recently. It’s an amusing exchange on The Late Show with David Letterman in which Gates tries to explain the idea of the Internet to his host. Unconvinced, Letterman openly mocks the idea but admits “it’s easy to criticise something you don’t understand.”

The joke’s obviously on Letterman now, but you can’t judge him for his naivety at the time. The Internet was a new concept to most people, and it was hard for non-nerds to get their heads around. Even Gates himself couldn’t have fully appreciated the transformative impacts it would have on our lives in the years to come.

Fast forward 27 years and there are a lot of parallels as the Internet’s third iteration, Web 3.0, takes form. Web 3.0 represents a move towards greater decentralisation and interoperability between big tech and emerging players, rewarding users at the forefront, and spawning immersive virtual realms known as the ‘metaverse’.

A lot of hype is being met by an equal measure of head-scratching about this new digital ecosystem, the metaverse. Will it have the same transformative impacts? If so, in what ways?

The metaverse today is still the Wild West – a virtual world inhabited by tech pioneers and the earliest of early adopters. It has a growing mix of experimental use cases, mostly in gaming and entertainment. Developing tech like augmented reality and virtual reality (AR/VR) which is needed to access and experience the metaverse, is still fairly clunky and in its early stages. No OEMs have cracked the code yet, although some are getting close.

And like the Internet in its early days, nobody really knows how the metaverse will evolve, what the full extent of its transformative potential will be, or which companies and brands will come to dominate, if any.

But make no mistake, the metaverse will go mainstream, and likely sooner than one may expect. Growth in users is following a similar trajectory to internet adoption in the 90s. Bloomberg estimates the market will grow to $800 billion by 2024, and over $3 trillion in a decade. Apple – never one to release a half-baked product – is rumoured to be launching a VR/AR headset early next year.

What does this mean for brand leaders?

One benefit of having lived through two internet evolutions is that brand marketers are more wise to the consequences of complacency, taking lessons from the sad fates of Kodak and Blockbuster Video, among others. Today, what we’re observing is more akin to FOMO. Brand leaders know the metaverse is coming and they’re eager to dip their toes in its virtual waters.

Our advice is to lean in and experiment, but tread with caution. For all the metaverse’s promise, there are dangers, not least the inflated costs and uncertain returns of early participation. Key structural, technical, legal, ethical and other considerations are miles from being resolved, if they’re being considered at all. There are important privacy and security concerns, such as the potential tracking of users’ eye movements and facial expressions that could enable brands to more effectively manipulate our emotions and behaviours. Guardrails are needed, and until they’re in place, brands will want to make sure they’re operating on the right side of the public’s tolerance, lest they erode trust and loyalty.

Brands should absolutely start thinking about potential ways to get involved in the meantime, and there are some relatively inexpensive ways to do so. Offering interactive AR experiences is a great first step for enterprise brands, rather than launching into the big scary land of Metaverse right away. Limited edition NFTs to reward loyalty, or hosting events in virtual worlds are other examples. But potential returns, positioning and risks should always be weighed up.

As Charles Darwin said: “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” The same applies for brands in the metaverse.

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Shaunn Anderson The Pistol