The Metaverse: the new marketing gold rush
There is a new gold rush here and it’s called the Metaverse. Tech giants and brands are all picking up their picks and shovels to be the first to find Metaverse gold. Meta and Apple are in “deep, philosophical competition” to develop the metaverse. Microsoft is busy building an “industrial metaverse.” And companies from IKEA to Huawei and Alibaba are forming a “Metaverse Standards Forum” to ensure they don’t get left behind.
Although no one quite knows exactly what the Metaverse is or will become, it’s evident that these platforms, all flocking to create their own version of the Metaverse, will in turn become the picks and shovels of a future grand Metaverse.
Even governments are keen to get a foothold in the metaverse. Chinese cities and provinces have started to incorporate the metaverse into their economic development plans, whereas Barbados is planning to open its next embassy in the metaverse.
For future-forward marketers, these are significant developments to stay on top of. If and when the metaverse materialises, it will provide a host of opportunities for brands to engage with and advertise to existing and potential customers.
However, to be successful, companies need to start preparing for the metaverse right now. One way to do that is to utilise gaming platforms like Roblox and Decentraland, which already offer virtual worlds and can be seen as prototypes of the metaverse that is to come.
Here is a metaverse guide covering everything you need to know, starting with what it is, how to join it, and examples of brands embracing the metaverses of today.
What is the metaverse?
Because we are still in the early stages of the metaverse, there is no agreed-upon definition of what it is. However, here is how three experts define the metaverse:
- Matthew Ball, a technology investor who wrote a series of articles and has just published an important book on the metaverse: The metaverse puts “everyone inside an ‘embodied’, or ‘virtual’ or ‘3D’ version of the internet and on a nearly unending basis. In other words, we will constantly be ‘within’ the internet, rather than have access to it.”
- Mark Zuckerberg, the CEO of Meta (formerly Facebook): “The “metaverse” is a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you.”
- Marty Resnick, VP analyst at Gartner: The “Metaverse will allow people to replicate or enhance their physical activities. This could happen by transporting or extending physical activities to a virtual world or by transforming the physical one.”
The closest present-day environments to these visions of the metaverse are gaming platforms like Fortnite and open-source virtual worlds like Decentraland.
Right now, these platforms are not interoperable. But metaverse environments should be. The idea is that users will be able to take their digital avatar and everything they own in the metaverse from one environment to another.
Just as important: users will be able to enter the metaverse from anywhere, be it their phone, VR headset, PC, tablet, smart glasses, or some other device.
Is the metaverse worth the hype?
Some people think the metaverse is nothing but a marketing strategy and/or that it will never materialise. But the truth is that metaverse-related technologies like VR, AR, mixed reality (MR), blockchain, and cryptocurrencies are already disrupting industries such as healthcare, retail, telecommunication, automotive and transportation.
According to research by McKinsey, 95% of executives are of the opinion that the metaverse will have a positive effect on their industry. Furthermore, around a third believe that the metaverse will change how their industry operates, whereas a quarter thinks it will contribute at least 15% to their revenue in the next five years.
But it’s not just business leaders looking forward to a future where physical and virtual worlds converge.
That same report by McKinsey found that two-thirds of consumers are looking forward to doing everyday activities, such as collaborating with remote colleagues, in the metaverse.
And according to Gartner estimates, one-quarter of people will spend at least one hour a day in the metaverse shopping, working, or learning by 2026. This sentiment is echoed by Microsoft co-founder Bill Gates, who envisions the metaverse as a critical part of our workplace within the next few years.
Importantly for marketers and brands, almost 8 in 10 consumers active in current metaverse-esque environments have bought something.
Brand use cases
The metaverse will create many new opportunities for brands to promote their products and services.
Just as in the real world, brands will be able to take advantage of ad spaces in the metaverse to advertise their products.
Billboards are the most obvious example. Imagine looking out a window in a Horizon Workrooms-like digital workspace and seeing a billboard showing a popular sneakers brand. Or noticing an ad on a virtual bus that promotes your favourite snack bar.
But brands may also run their ads in other spaces, for example, before a film screening at a digital cinema. Christopher Nolan’s films have already been screened in Fortnite, and although no ads were shown beforehand, this may change with the next screening.
On the other hand, companies that want to take it up a notch can create virtual versions of real-life items, like a specific car model, which users can “come across” within the digital world they’re in.
In 2021, NASCAR collaborated with Badimo, the Roblox development team that created the popular game Jailbreak, to place a NASCAR vehicle to the game for an event.
If Meta’s metaverse becomes a reality, brands might also be able to “sponsor the appearance of an object” that corresponds to a physical world item at a virtual store in the metaverse. It is envisioned that the bidding process for these types of ads would be similar to the current advertising auction process.
Some brands may go even further, designing games and contests within the metaverse to build brand awareness and engagement.
For example, last year, the fast-casual dining chain Chipotle launched a virtual experience on Roblox just in time for Halloween. The experience lasted four days and consisted of two parts:
- A virtual storefront of Chipotle. Users who visited the virtual storefront dressed in a digital Chipotle-inspired costume were awarded a free burrito code they could redeem in real-life.
- “Chipotle Boorito Maze,” a corn maze users could navigate to win avatar accessories.
Chipotle returned to the metaverse in 2022 for National Burrito Day with its Chipotle Burrito Builder. As part of this experience, the first 100,000 Roblox users to roll a burrito won virtual currency they could swap for a Chipotle entree in one of its physical restaurants.
Blending the real with the virtual, Chipotle also launched a Roblox-inspired menu after polling Roblox players on Twitter.
Not all experiences disappear after a specified amount of time. The action sports brand Vans World partnered with Roblox last year to launch an interactive and persistent skatepark where fans could hang out with their friends, build custom skateboards, and buy exclusive Vans sneakers and apparel items. To date, more than 48 million users have visited the virtual skatepark.
Nike did something similar when it launched its very own Nikeland on Roblox that same year. In Nikeland, users could play mini-games like dodgeball and tag with just a smartphone, and buy Nike apparel to personalise their avatars.
Close to 7 million users from 224 different countries have stopped by Nikeland so far, and Nike now sees the metaverse as an important revenue strategy.
Just because we’ll spend more time in virtual worlds doesn’t mean brick-and-mortar shops will fall out of fashion. Instead, shopping at real-life stores will probably become easier due to the metaverse.
I predict that physical retail stores in the future will have volumetric cameras (i.e., cameras that can capture photorealistic 3D models of humans) that will be used to create realistic avatars (i.e., user representations) of shoppers. These avatars will be identical to the individuals using them in every aspect, including measurements.
Thanks to these avatars, customers will be able to “try on” apparel and other items in “virtual dressing rooms” without having to visit the physical dressing rooms of the store, and even after they have returned home.
Shoppers will be able to see themselves wearing a specific item from all angles. It might also be possible to place an avatar in various different environments, like the office or the beach, to see if the outfit will suit the occasion.
Virtual fitting rooms in the metaverse will not only make shopping easier and more fun. They will also help retailers reduce waste. Last year, nearly 17% of all merchandise purchased by customers was returned. Through virtual rooms, customers can make better decisions, which can significantly reduce waste.
The Metaverse Fashion Week that took place in 2022 is an excellent example of what this might look like. Happening on the Decentraland platform, the event allowed attendants to buy virtual clothing pieces via the digital world and have a physical version delivered to their homes. Dolce & Gabbana, Tommy Hilfiger, and DKNY were some of the brands that participated.
Similarly, a few years ago, Levis and Ralph Lauren launched virtual clothing lines for Bitmojis that were also available for purchase in the real world.
Levi’s Bitmoji campaign on SnapchatIt is anticipated that in the future, Snapchat’s Bitmojis might appear on PCs and video games as well as other digital experiences, as opposed to just on mobile devices and the Snapchat app. Moreover, it is also likely that Bitmojis will become part of VR and AR try-ons.
Forward-thinking brick-and-mortar brands are already merging the physical and digital with technologies like magic mirrors. Virtual dressing rooms are the logical next step.
As users spend more time in the metaverse, they will want to express themselves through the clothes they wear, just like they do in the real world. Virtual clothing will allow them to do so.
Many well-known brands have already produced and sold clothing that exists solely in the digital world, whether in the form of in-game character skins or non-fungible tokens.
In-game character skins
In-game character skins are outfits for playable characters, which change the avatar’s appearance.
In 2020, Valentino and Marc Jacobs collaborated with photographer Kara Chung, who runs the Instagram page @AnimalCrossingFashionArchive, to re-create their looks in-game. Other brands, like Dolls Kills and GCDS, also released skins for characters in the game.
For retailers, selling in-game character skins is a no-brainer. They can use existing designs and don’t have to spend money on fabric, labour, warehousing, etc. Moreover, in-game character skins that correspond to a new product line can increase awareness among fans and new customers.
When Ralph Lauren partnered with the social media app Zepeto, it sold more than 100,000 units of clothing in just the first few weeks on the app. Explaining their reasoning for jumping on the metaverse bandwagon, Ralph Lauren’s CEO Patrice Louvet said, “one of our strategies is to win over a new generation, and the new generation is there, so we have to be there.”
Non-fungible tokens, or NFTs for short, are one-of-a-kind digital assets with a unique serial number. Seen as an essential part of the metaverse, NFTs are tied to the blockchain and can be sold and bought by users.
Whereas game providers and not purchasers own in-game character skins, NFTs give buyers exclusive ownership.
Last year, Adidas partnered with collaborators like the Bored Ape Yacht Club, GMoney, and Punks Comic to launch a collection of virtual and physical wearables titled “Into the Metaverse.”
Adidas’ virtual wearables could be used in blockchain-based games like The Sandbox, whereas physical items included tracksuits, hoodies, and beanies. Each NFT was priced at 0.2 Ethereum ($765 at the time). The NFTs sold out in a single day, netting Adidas over $22 million.
Similarly, earlier this year, Nike launched a collection of virtual sneakers sold as 20,000 NFTs. One NFT was created by the Japanese contemporary artist Takashi Murakami and was sold for $134,000.
According to Jurgen Alker, managing director of an NFT studio, both sneakers and NFTs “are created around scarcity and drops. It is about community, status and belonging to something”.
Luxury brands like Burberry are also experimenting with the metaverse and NFTs. In 2021, the British fashion house released an NFT collection in the multiplayer game Blankos Block Party.
The collection included an NFT shark character named Sharky B and NFT accessories such as pool shoes, armbands, and a jetpack. There were only 750 units of Sharky B available. Each unit cost $299.99, and there was a limit of just four units per user. The NFT sold out in 30 seconds.
The drop was so successful that, in 2022, Burberry launched another collection. This time, it featured an NFT unicorn character named Minny B and offered customers a range of virtual accessories that included sliders, horseshoe necklaces, boomboxes, and seashell-inspired phone accessories.
People who purchased Sharky Bs from the first drop in 2021 received a free bucket hat accessory. Burberry also designed a social space within the Blankos Block Party game where fans could connect.
It’s not just apparel and sneaker brands taking part in the metaverse, though. In 2021, Budweiser released an NFT collection titled “The Heritage Collection”, which featured more than 1,000 exclusive digital designs of beer cans.
Pringles launched “CryptoCrisp” last year, an MP4 file of an animated Pringles can full of Crypto-theme crisps (never-before-tasted virtual flavour of Pringles). The price of a regular Pringles can, only 50 CryptoCrisps exist.
Coca-Cola auctioned off an NFT collection on International Friendship Day in 2021. The collection consisted of things like a vintage Coca-Cola cooler and Coca-Cola bubble jacket. The auction winner was also sent a real cooler full of Coke. In this way, Coca-Cola bridged the gap between the physical and virtual. A year later, the company launched an NFT Collection for Pride Month.
Now, big box stores are also showing interest in NFTs. Early in 2022, Walmart filed several trademarks that suggest its intent to sell virtual home goods, electronics, personal care products, etc.
3 things to know before entering the metaverse
Eager to get started with the metaverse? Here are three things brands need to know before they dive in head-first.
1. Brands need to match ads to metaverse environments
Whether offline or online, the vast majority of consumers hate ads. As evidenced by user backlash after Facebook’s test to place ads inside Oculus Quest games, the metaverse is no exception.
Any marketer that wants to advertise their brand in the metaverse will need to think carefully about how they do so.
As each metaverse will have a different environment and user base, marketers must tailor their campaigns to each virtual world they may want to advertise in. To do this, they’ll need to immerse themselves into each platform, learning its culture and language.
However, regardless of the platform, advertising campaigns that are fun and subtle are going to win out.
2. All metaverse platforms are different
Some metaverses, like Roblox, Decentraland, and Minecraft, have lesser graphical environments but nice gameplay experiences. Others, particularly those developed via powerful game engines such as Unreal or Unity, give higher fidelity.
When choosing a metaverse platform, marketers need to consider these nuances. For instance, brands that value accurate representation of their products will want to go with a platform that provides greater realism.
3. 3D models are key
Images and videos might work in the physical world. But even in real-life, 3D is quickly gaining ground.
Shopify found that sellers who feature 3D content in their stores experience a 94% increase in conversion rates on average. This is because 3D representations give customers more information about a product, including what it looks like from different angles or even if it fits in their homes via AR.
In the metaverse, 3D is even more important. As a three-dimensional environment, the metaverse is made up of 3D objects. For example, Epic Games (video game and software developer behind Fortnite) recently bought the 3D modelling platform Sketchfab.
Brands that want to enter the metaverse will therefore need to produce 3D models of their products. However, rather than choosing products randomly, marketers should try and decide which assets would be most recognisable to their target audience and would best translate into the metaverse.
How to build 3D models
The easiest way for brands to create 3D models of their assets is to partner with a 3D platform.
A market leader in this space, Poplar Studio has a vast community of 3D and AR creators with great and diverse experience. Because of this, Poplar Studio can help marketers build 3D assets at scale and an affordable price point.
With a library of 3D assets, brands can quickly and easily deploy them across the metaverse, including on AR, VR, mobile, and other platforms.
Taking advantage of the metaverse
The metaverse is still a new concept, but that doesn’t mean that brands shouldn’t be looking for ways to strategise for it. Big companies like Burberry, Coca-Cola, and Nike have already successfully entered today’s metaverse worlds.
At the most basic level, the metaverse represents a marketing opportunity. Only a handful of well-known brands are leveraging metaverse environments, which means that almost any brand that enters the metaverse with a high-quality offering is guaranteed to make headlines.
However, in the long term, the metaverse is all about community. Brands that bet big on the metaverse right now have the opportunity to foster loyal brand advocates among what will soon be one of the most powerful consumer cohorts—Gen Z. Currently, Gen Z makes up more than half of the user base in the metaverse.
Ready to join the metaverse? Contact Poplar Studio today and we can advise you on next steps.