Entering the Metaverse: What brands need to consider

By Greg Kahn, President and Chief Executive Officer, Emerging Tech Exchange

Imagine having the ability to create something—virtually anything—without the barriers or limitations of the physical world. Now imagine selling these virtual assets to generate real revenue. This new economic frontier is already here and ready for the next evolution called the metaverse. Based on the Internet, computing, blockchain, cryptocurrency, nonfungible tokens (NFTs) and mixed reality technologies, its potential for brands is staggering.   

Before brands go venturing off into the metaverse, however, they’ll need to arm themselves with a new strategy that takes into consideration who is likely to spend the most time and tokens in an immersive, virtual ecosystem. First, it’s important to recognize that the only data we have to go on is anecdotal at best, given that various metaverses are being created daily.

Today, versions of the metaverse exist on Massively Multiplayer Online (MMO) gaming platforms where players come together in the same virtual space. ROBLOX, for example, is a free to play sandbox MMO (meaning characters can explore on their own terms and pace and build virtually anything) played daily by more than 50 million people worldwide.

Other than the real world, there are few places that have such significant scale, which is why some see ROBLOX as the next marketing frontier. Take Gucci, for example. In December 2020, the company launched two player-generated virtual items in the Roblox Avatar Marketplace, and in May 2021, one of its virtual handbags sold for $4,115. Then, from May 17-31, Roblox hosted the “Gucci Garden” to coincide with an exhibition in Florence to commemorate Gucci’s 100-year anniversary.

But this was not Gucci’s first foray into MMOs. Since 2017, it has been a partner to Los Angeles-based avatar technology company Genies, outfitting user avatars. Genies also has a global partnership with Universal Music Group. According to a UMG press release, the partnership has expanded to include Genies equipping artists (like Justin Bieber (Def Jam), J Balvin (Republic), Rihanna (RocNation), Shawn Mendes (Island) and Migos (Quality Control/Motown) with “official virtual identities for use in Web3 and the shifting age of the Internet.” Artists have the option to release exclusive avatar wearables that fans can collect and use to outfit their own avatars in the metaverse. 

The Sandbox is yet another example of an existing metaverse. Free, decentralized and community-driven, it is also a gaming ecosystem where experiences and assets are created, shared and monetized—including virtual land. In November, Republic Realm purchased land in The Sandbox metaverse from Atari SA for $4.3 million. Then there’s Decentraland. Considered the first fully decentralized platform owned by users, this metaverse encompasses 90,000 parcels of land, each approximately 50 square feet. Owners can do and build on their land whatever they choose. At CES 2022, Samsung launched Samsung 837X on Decentraland. Avatars are met by a virtual guide in Samsung’s lobby who directs players to three unique interior spaces where they go on quests and discover live music events.

Well before Samsung’s entrance, brands were figuring out ways to get a foothold in the metaverse. Here are just a few creative examples:

• In 2020, DBS bank recreated Singapore’s iconic Zouk night club in Fortnite. It was renamed the “Live Fresh Club” to advertise its credit card bearing the same name.  

• In 2020, Procter & Gamble’s Gillette Venus, and Kimberly-Clark's Cottonelle activated campaigns on Nintendo’s "Animal Crossing: New Horizons," which became widely popular during lockdowns. At the same time, Hellmann’s (mayonnaise) constructed a branded island in Animal Crossing, inviting players to drop off their spoiled turnips in exchange for a real-world donation to Canadian food-rescue charity Second Harvest.

•  In 2021, Verizon launched a virtual 5G Super Bowl stadium in Fortnite. According to Verizon, it was “the largest Fortnite activation ever built in creative mode for fans to come together, celebrate and compete.”

We can clearly see how there will not be one monolithic metaverse but many, each with their own concepts and experiences. For example, Disney secured a patent in December 2021 for a "virtual-world simulator in a real-world venue." A technology that does not require the use of a virtual reality (VR) or augmented reality (AR) headset, it will bring physical and digital assets more closely together and allow for "storytelling without boundaries in our own Disney Metaverse." Starting with Disney’s theme parks, the technology will be deployed to track visitors and then generate personalized 3D effects onto physical spaces near the person.

Some metaverse environments will be a perfect match for a brand while others may not, which means that, similar to other online and offline marketing campaigns, knowing your target audience is key. So is understanding how much time they spend in the metaverse and what they actually do once they are in these immersive environments.

Knowing what your competition is doing in virtual space(s) is equally important. Consider how your brand will make its entrance and create a storyline that invites participants into the ongoing experience. Much of the attraction of exploring in a metaverse has to do with socially connecting and building and sharing experiences with others. Brands will need to be far more creative in these environments, with ideas that can extend into the real world seamlessly.

Finally, access the risks and rewards. Like investing, brands need to diversify across physical and nonphysical worlds. Some of the larger ones, like Warner Bros. and Hyundai are building their own metaverses, while others are testing the waters with NFTs. Facebook (Meta) is looking at the long game, investing roughly $10 billion in this year alone in its quest to become a metaverse company in the next five years.

That, however, pales in comparison to Microsoft’s announcing it will acquire gaming giant Activision Blizzard for $68.7 billion. Microsoft’s Chairman and CEO Satya Nadella was quoted, stating: “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”

In the meantime, this is new territory without a roadmap, which for the adventurous is a great opportunity to chart their own course.