In 2021, the metaverse was “one of the most popular channels for brand experimentation” despite being at the early stage of development. Since then, companies have been actively exploring commercial metaverse opportunities. Although the metaverse gives companies more room for manoeuvre, there is still a lot of untapped potential. For example, while case studies show that the metaverse has helped some brands reach wider audiences, especially younger customers, marketers still cannot grasp “the long-term value of marketing in the metaverse”, and thus cannot fully benefit from it. Similarly, despite increasing exposure to the metaverse, many consumers cannot understand what metaverse is, and how it affects their purchasing decisions. The concept of the metaverse is thus still confusing for both companies and consumers.
Metaverse opportunities for brands
The metaverse marks a shift in brand consumption: blurring the lines between social, gaming and crypto, to name a few, the metaverse has created a more decentralized and democratized space for commercial activity, which brands should explore. 3 new opportunities for brands will be presented below.
Avatars, i.e. icons or images by which people represent themselves online, give endless opportunities for brands as practically any product / service marketed to humans can be sold to their ‘virtual counterparts’, thus strengthening the position of direct-to-avatar (D2A) as a new retail strategy. Avatars will also eventually replace usernames, and will serve as a self-sovereign identity (SSI), i.e a digital identity management model which gives individuals or businesses complete ownership over their online accounts and personal data. Functioning as SSIs, avatars will allow users to seamlessly move across online platforms and experiences as they will no longer need to log in to every platform they visit.
Michael Patent, Founder of Culture Group, a brand advisory and integrated marketing agency, forecasts that avatars will enable “greater offline-to-online activations”: “I can see a world in which you buy a product at a store, you scan something, and that unlocks an opportunity for your avatar to access an additional platform or to access an additional virtual good.” Avatars will thus streamline the customer journey across offline and online brand touchpoints, thus improving a shopping experience.
Emma Chiu, Global Director of Wunderman Thompson Intelligence, notes that it is forecast that over the next few years virtual goods will become “as important if not more important than physical goods”. As the interest in buying digital goods continues to grow, more brands will opt for launching virtual collections first, and will use them as ‘a testing platform’ before physically manufacturing products and introducing them into the market.
Another metaverse opportunity for brands is creating non-fungible tokens (NFTs), i.e. digital assets that cannot be exchanged. It can be a photo, video or audio file that has been tokenized in order to create a digital record of ownership stored and shared via blockchain. Purchasing an NFT thus means purchasing a unique token (entry) on a blockchain ledger which proves exclusive ownership of a digital asset. The popularity of this type of online trading has skyrocketed over the past year. It has even reached a point where brands successfully sell digital versions of their goods at a higher price than the price of their physical goods. NFTs are thus a good starting point for commercial experiments with metaverse properties.
Brands can also benefit from the metaverse by organizing massive interactive live events (MILEs). Using a single simulation, MILEs bring together a large number of users who can interact and influence the event or game in which they participate in real-time. Most MILEs are game-based, but they can be applicable to many other contexts. In the future, users will be able to more actively influence the outcome of MILEs as they already democratize the storytelling process, observes Michael Patent, Founder of Culture GroupMILEs. “Creating global IP in which the consumer determines the outcome in real-time is going to be really significant, and I see that playing out virtually and cross-border,” he says.
Data security in the metaverse
Having in mind the controversy surrounding data security on social media, there are concerns that the issue of data security will be of much greater importance for the metaverse. Former Federal Communications Commissioner Tom Wheeler believes that “the heightened interconnectedness of the metaverse” will increase the number of threats to user privacy as it will become easier to spread misinformation. That unquestionably means that new rules and regulations on data protection will have to be introduced. Recent history suggests that this will most likely happen while the metaverse is already up and running, and that top tech companies like Facebook or Microsoft are very likely to influence their actual content. As the metaverse generates a massive amount of data, it is forecast that “whoever controls it will be able to exploit not just individual users but entire markets”. Control over metaverse data will thus give more market control at the expense of user data security and privacy.