The Metaverse Explained: A Briefing for Advertisers
February 9, 2022
Technology has been the catalyst for shifts in human behavior for centuries. Wheels enabled man to move. Trebuchets crumbled walls. Cars made horses obsolete. Video killed the radio star. The iPhone changed how we connect and consume content forever. We are on the doorstep of another watershed moment through the metaverse.
Due to recent news, and a name change, many people think about the social network formally known as Facebook (its parent company is now known as Meta), when in fact, the metaverse has been in the making for quite some time. Just look at the gaming industry. Games like SecondLife and even more recently Animal Crossing and Roblox have allowed players to create a new world to live in. We most recently saw Microsoft invest $69 billion dollars with their purchase of Activision, which Microsoft said was purely focused on the opportunity within the metaverse.
Whether it ends up looking like Stardew Valley or Ready Player One, there is no doubt we will engage with each other, content and brands differently than we ever have before. The opportunity through both hardware and software is immense.
How will users access the metaverse?
The boundless metaverse will be accessible in different ways and at different depths. Your smartphone is capable of reaching the top layers of the metaverse and allowing you to interact with people, content and more. If you are interested in going deeper, a VR headset is becoming more widely adopted. But long term, a set of AR glasses is likely to be the primary way of submersing yourself into a new world.
The theory of a fully connected metaverse accessible through any device is the ultimate goal, but it is likely to continue to be built with companies like Microsoft, Meta and others launching their own. But the opportunity to connect and expand together will ultimately lead to an open universe.
What will you be able to do in the metaverse?
The opportunity is truly limitless. With the metaverse being completely decentralized, anything can be created. Today, we have seen heavy adoption in the gaming industry, but as COVID continues to keep workers home, we have seen some companies adopt the metaverse to connect with coworkers, instead of another Zoom or Teams call. Early adopters have attended conferences in the metaverse and even gotten married there. (It’s worth noting – and a bit mind-blowing – that in this example, the bride was able to have her deceased father attend the wedding to bless the couple in avatar form.)
Long term, there is potential for almost all industries to move into the metaverse. Why bother to make in-person plans with friends when you can go to a concert together in the metaverse? Why get in the car to drive to the mall when you can visit the stores and try on clothing from the comfort of your couch? Why fly to Rome when you can visit the Coliseum from your desk chair?
Hardware will also play a significant role in the success and growth of the metaverse. Thinking beyond VR headsets and AR glasses, various equipment can be used to allow patients to visit doctors from their own home. Many of you can look down at your wrist and see an Apple Watch. This device tracks multiple health related elements that can be connected to the metaverse, making data tracking and analysis done by your HCP significantly more seamless.
How will brands use the metaverse?
The boundless theme continues here when it comes to opportunities for brands. The most obvious is brand integration. Want to watch the NBA playoffs? Why not stop by the local metaverse sports bar sponsored by your favorite beer company? Sponsored locations, skins, bundles are all at play. We’ve seen this happen across movies, TV shows and video games with great success. Fashion brands are among the early adopters as they have begun designing clothing exclusively for the metaverse.
While brand integration most likely operates in a sponsorship type of model, traditional paid advertising will present brands with significant opportunities. With the metaverse being completely immersive, users will be able to purchase products, services, or experiences within it. Paying for premium real estate within the metaverse will allow brands to generate awareness and/or drive engagement/purchases. From billboards in the newest racing video game or a sponsored brand skin for your avatar, the boundaries are endless for paid advertising.
Another popular monetization model within the gaming industry will most likely transfer over to our everyday lives within the metaverse. This comes in the form of subscription passes and/or cosmetic upgrades. As mentioned above, Microsoft recently purchased Activision. Activision generates billions of dollars from their battle royal style game Warzone. Warzone allows users to purchase ‘Battle Passes’ which gives users access to various cosmetic upgrades if certain achievements are met. Users also are able to purchase ‘bundles’ which consist of various weapon, operator and other customization elements for their character. This type of content consumption model will allow users in the metaverse to customize their avatar and truly be unique. Why is this important? The more opportunities for users to personalize their avatars and participate in the metaverse equals more interaction and adoption. Similar to the success marketers can have with engaging audiences with Facebook due to their high engagement, metaverse users will offer brands opportunities to connect with a highly engaged audience.