This has been called “the year of the metaverse,” and little wonder. Even though it’s a long way from becoming part of our daily lives, not since the smartphone has a digital innovation been subject to so much buzz or held as a new playground for marketing innovation.
While still highly experimental for brands, the metaverse is quickly changing the marketing rule book. The planet’s best-known companies and savviest marketers—from Walmart and Coca-Cola to Disney and Victoria’s Secret—continue to invest to stake their claim in the virtual worlds of the metaverse. Technology leaders such as Facebook/Meta, Google, Microsoft and Apple see the metaverse as the new frontier for advertising and digital experiences.
Balenciaga has opened a virtual store where visitors to the metaverse can buy apparel for their avatars. Nike acquired a virtual shoe company that makes sneakers, as well as NFTs (non-fungible tokens) for buying them. The U.K. soccer team Manchester City announced a partnership with Sony to build a virtual stadium. Brands like Wendy’s, Louis Vuitton and Gucci are teaming up with gaming platforms and developers like Roblox, Epic Games and TiMi Studio Group to secure their piece of the meta pie.
But what do you, as a marketing chief, need to ask yourself before you take the plunge? What are the opportunities and the risks of your brand setting up shop—especially if you’re a let’s-do-this-yesterday early adopter or are more interested in planning for the future?
The opportunity of this ‘brand’ new world
What is particularly exciting for your brand is this new virtual universe has the potential to expand your reach while opening up new markets for your products and services.
For example, in the simulated world, a gamer is now able to sample and buy makeup products, leading to a wave of beauty brands that target them. Estée Lauder has launched the ANRcade microsite targeted to the gaming community, while Clinique and Elf Cosmetics are among the first beauty brands to introduce NFTs as they work to engage with younger audiences. Meanwhile, both Gucci and Givenchy have partnered with Nintendo on its popular video game series Animal Crossing again building awareness of luxury brands to a younger demographic.
Some important, practical questions you’ll want to ask yourself before diving in:
What kind of investment is my brand looking at? NFTs? A virtual storefront? An entertainment platform? A promotional campaign? All the above? The possibilities are truly unlimited at this stage, but must make sense for your brand, appeal to your key customer targets and serve your overall brand strategy.
· Do we want to partner with a gaming company in the space, much like Gucci did with Roblox to create a virtual store? Or do we, like McDonald’s, want to build out our own meta presence?
· Who will manage our outpost in the metaverse, and what is the operational apparatus that connects our brand’s virtual reality with its physical one?
· Is my company positioned to make an investment in something that is highly speculative, experimental and based more on innovation and buzz than on an actual return on investment in the nascent days of Web3?
· Do we have the operational flexibility, capacity and talent to adapt as we experiment and see what works and what doesn’t as the metaverse matures and as more consumers flock to it?
· Is the audience we are looking for already in the metaverse and have the right technology for the experience?
Managing risks, reaping rewards
Companies considering venturing into the metaverse should be mindful that there is also a “dark side” to all this, as with anything having to do with cyberspace. The public certainly is aware of it. A poll of more than 1,000 adults worldwide by Statista found that nearly half of those surveyed (47%) said the greatest threat of the metaverse is individuals becoming addicted to virtual reality, while more than 4 in 10 saw privacy (41%) and mental health (41%) as potentially compromised.
As in the real world, venturing into the metaverse means that one must always be alert to that which can negatively impact their brand’s image and business. Brands must work to mitigate it and prepare to respond quickly by ensuring they can make quick creative and practical adjustments to their strategy and when necessary deploy crisis communication resources that are available, to derail things that could harm a brand’s reputation and its customer goodwill.
Yet, despite the potential risks, the upside for your brand at this stage could be enormous. The cost of entry is still relatively modest, depending on the scope of your involvement and your objectives. Moreover, the wide-open, highly immersive domain that is the metaverse presents plenty of opportunity for your brand to experiment, stand out creatively and provide an engaging brand experience that consumers will remember.
By getting in on the ground level, you stand to reach highly valuable demographic targets in new innovative ways before your competition does.
