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The metaverse is taking virtual experiences to the next level, giving organizations opportunities to reach consumers in new and innovative ways.
Metaverses are infiltrating the internet, and many businesses -- such as Microsoft, Apple, Nike and Coca-Cola -- are adopting this latest technology. Bloomberg analysts predict the metaverse market will be worth nearly $800 billion by 2024.
As the metaverse continues to grow and evolve, marketers need to understand how it works and how they can use it to engage customers.
What is the metaverse?
The metaverse is a 3D, immersive digital world where people interact with one another on multiple platforms. To make this experience immersive, augmented reality and virtual reality are used. The metaverse mimics the real world, and people can use avatars to interact with others and purchase virtual goods. People "live" in the metaverse.
An example of the metaverse is in the video game Roblox. In this virtual reality game, players attend events, interact with other users and purchase digital merchandise in real time.
Key characteristics of the metaverse
Because the metaverse is virtual, it is continuously active. Other key factors of the metaverse include the following:
- user-generated content;
- fully functional and self-contained;
- virtual and individual identities or agencies;
- use of human interface technologies;
- open and shared world through decentralization; and
- fully functioning economy with digital currency, NFTs or cryptocurrency.
The evolution of marketing
Marketing is the practice of promoting and selling a company's products or services. It encompasses the four P's of the marketing: price, product, promotion and place. Marketing and advertising in the metaverse can offer new places to buy and new ways to promote.
The evolution of marketing goes along with the changes to the web. When web 1.0 started, the goal of marketing was to have a website with contact information for a business. Then Web 2.0 started connecting people and gathering their search history to make the user's experience more personalized. Now, with Web 3.0 comes a more immersive experience, according to Griffin LaFleur, senior marketing operations manager at Swing Education and a B2B marketing consultant.
There are 400 million unique and active users accessing a metaverse platform monthly, according to a report from Metaversed, a consulting company, on LinkedIn. To reach these users, companies need to follow their generational audiences to the metaverse.
Why companies are marketing in the metaverse
There are several reasons companies are eyeing the metaverse. It enables companies to engage with customers in different ways to stand out. But, one of the main reasons companies are targeting the metaverse is to reach Gen Z and millennials.
An interesting aspect of the metaverse is the decentralization, LaFleur said. Unlike Facebook -- where organizations and individuals use a platform owned by another company -- they have a chance to create their own world and create the environment they see.
Examples of how companies are using the metaverse
Even though companies are starting to enter the metaverse, the gaming industry was the first to fully embrace it. Early adopters of the metaverse are realizing its potential and seeing the most return.
Griffin LaFleurSenior marketing operations manager, Swing Education
"The metaverse is an open slate. If you can think of it, you can make it," LaFleur said.
One company that uses the e-commerce side of the metaverse is Gucci. Gucci released an exclusive pair of digital sneakers in March 2021 called the Gucci Virtual 25.
Taking it to the next level, Gucci then created the Gucci Garden in Roblox, which is a virtual experience simulating the Gucci Garden Archetypes in Florence, Italy. Roblox players can purchase digital pieces while mingling with others in the area.
Another example of how companies are using the metaverse include Microsoft's Mesh for Teams. The new meeting platform that will share experiences using mixed reality applications to create the feeling of physical presence. Employees can train together anywhere in the world using holographic 3D images for sharing and visualization, which can cut down on travel expenses. Mesh for Teams is currently available in limited free preview.
Other immersive entertainment examples include concerts in Fortnite; a block party by Warner Bros. to promote "In the Heights" with interactive games, dancing and scavenger hunts; and Nike's digital NFT collection for new digital, one-of-a-kind products.
Keys to marketing in the metaverse
The metaverse is about creating an experience for customers. Whether marketing products or services, there are ways for marketers to embrace a future in the metaverse.
Organizations should set goals before entering the metaverse and be sure to experiment because platforms constantly evolve. Businesses should start small to test reactions and make the necessary adjustments.
Businesses should also consider how to use the metaverse to reach the target audience. If the main goal is to increase sales, then offer virtual items similar to those found in brick-and-mortar stores. Find a way to connect the two so people can have them both virtually and physically. But be sure to know the audience before entering a metaverse platform. Roblox, for example, typically caters to a younger audience.
Here are some ways marketers can work in the metaverse to reach their audience:
- Make collectibles available. People enjoy collecting items, and there is a new opportunity to create another collection in the metaverse. Digital collectibles can also be traded with other users. Nike, for example, is creating NFTs for digital products, which are unique and secured with blockchain technology to prove ownership.
- Engage with existing communities. Businesses shouldn't show up to an existing community and push marketing on its members. Instead, consider the style of the current platform. Interact with current members to create user-generated content -- such as videos, text, images and audio -- and they can help execute a business's campaign naturally.
- Use native advertising. As people explore the metaverse, there will be opportunities for native advertising such as billboards on a virtual street or product placement. There are also sponsorship opportunities for events within the metaverse. Coca-Cola and Samsung have virtual billboards in video games such as Football Manager. Moreover, rapper and recording artist Nas hyped his new album through in-game audio ads during racing games and Fortnite.
- Create a specific metaverse platform. This is the most expensive and biggest way to invest in the metaverse. Businesses can create a game or a world specific to a company's product or service; however, this full experience may take time and research and a significant investment to find the best fit with the target audience. For example, Shopify launched its new AR/3D shopping experience for businesses to create virtual versions of their products, and is also working on its own NFT marketplace.
- Allow customers to try products. Using virtual and augmented reality, companies can see a 3D version product before buying it. Car companies, such as Porsche and Hyundai, have created virtual viewing rooms and events to get a virtual tour of the car. Companies can do the same with a variety of items, so customers do not have to leave their homes to try a new product, such as using augmented reality to see furniture in their home or trying on clothing.
- Design interactive live events. Many events went virtual when the pandemic hit, but the metaverse can take them to a new level. These kinds of events are interactive with 3D options. Remote employees will also be physically present in the metaverse with others to feel less alienated. The metaverse can be more cost effective and flexible, enabling collaboration and interaction with one another. This is done by visualizing and solving problems in 3D instead of facing 2D limitations of virtual meetings today.
Challenges to marketing in the metaverse
One of the biggest challenges of the metaverse is the newness, making companies unsure about diving in. There is also no regulating authority, which is troublesome to many.
The technology can also be a problem. To become fully immersed in the metaverse, users need the latest technology, such as high-end computers and VR headsets or lenses, which can expensive. Not everyone has access to these devices, which can limit the potential for marketers to reach a larger audience. Businesses that want to create their own platforms and experience also need to make great investments and have the needed technology and knowledge to create the experience.
Moreover, businesses need to understand the metaverse and not come off in the wrong tone with advertising. To be successful, it should appear natural and fit in with the metaverse.
Cybersecurity can also be an issue in the metaverse. If businesses need a person to verify identity for a purchase, there is always a risk for data privacy. Metaverse identities can be stolen, and there is little support to help resolve issues.