Innovation is in our DNA at TheVentury. That’s why we continuously educate ourselves about the newest trends and follow the latest technological advancements.
In a series of articles, we will explore the consumer trends shaping 2023 to help you identify and discover opportunities for your organisation. First one up, Growth Expert Johannes Prasser sheds some light on the Metaverse and its marketing potential.
THE METAVERSE AS A TRACTION CHANNEL
A while ago, I dropped the idea of creating a three-dimensional user experience to one of our clients. We’ve been optimizing, scaling and doing well on many traditional marketing channels for years (emphasizing the traditional here). In other words, we kept ourselves on the safer side of traction channels. Hardly anything out of the ordinary. However, with more competition entering the market and putting their efforts into the same channels, I knew it was time to look for a more unusual way of communication to test.
Naturally, I suggested creating not just content for the Metaverse but an authentic experience that adds value to the client’s product.
Spoiler alert: I didn’t manage to convince them, as the input-output ratio was very unclear to them. I could also sense their doubt about the Metaverse becoming a mainstream medium and the possibility of having a real first-mover advantage. Quite frankly, these doubts are nothing but valid and unfortunately, I couldn’t counteract them with data-backed arguments on the spot.
As a Growth Marketer, I knew just what to do: I must research data (if existing) to validate or reject my hypothesis and answer the questions connected to it.
Questions I wanted to answer:
- How likely is it that the Metaverse will become a relevant communication channel? What user data is already out there when it comes to the Metaverse? Is this channel already “validated”?
- Is the Metaverse the future of marketing? Or what does the Metaverse mean for marketing? Is there already proof of successful marketing initiatives from the Metaverse?
- How much risk is involved when deciding to test this channel for a company?
Is the Metaverse just a fad or the future?
What exactly is the Metaverse? Seeing how the whole concept is still in its infancy and has yet to unfold its full potential, interested parties haven’t agreed on one true definition thus far. Matthew Ball, Venture Capitalist and author of the book “The Metaverse and How it Will Revolutionize Everything”, identified several core attributes of the Metaverse.
He reckons that the Metaverse will …
- always be on, as it won’t reset, pause or end,
- be open to anyone, with individual agency,
- intertwine both digital and physical worlds,
- be a fully functioning economy in which businesses and individuals alike will be able to create value,
- exhibit large amounts of content and experiences by a wide range of contributors.
Even if these are just predictions, the last two characteristics highlight the value that industry expert Matthew Ball attributes to the Metaverse from a business point of view.
Of course, he is not the only one to do so. Vlad Panchenko, the CEO and Founder of DMarket, was cited in a 2021 Forbes article saying: “There will be no other option but to join it. Otherwise, you will not survive as a company”. Moreover, Goldman Sachs predicts that up to a third of global spending on digital transactions will switch to the Metaverse in the near future. In a similar vein, Citigroup anticipates the market value of the Metaverse to soar up to $13 trillion by 2030. To give these numbers some context, the global smartphone market, for example, is predicted to amount to $792 billion in 2029. Evidently, industry experts agree that the Metaverse isn’t a mere fad but rather poses enormous opportunities for those businesses daring to take the plunge into this up-and-coming digital territory.
Pioneers in the Metaverse
Despite all this talk about the Metaverse being a thing of the future, several pioneer companies are already testing the waters and experimenting with it.
Enter Roblox, an online gaming platform and comprehensive Metaverse concept. Its fully functioning digital world can easily be accessed on your computer, phone, tablet, or any other smart device. This paves the way for other companies to collaborate with Roblox and scale their (online) presence in the Metaverse.
Apparel brand Nike partnered up with the online gaming platform to design the immersive virtual world “Nikeland”, which allows its users to play games, run marathons and even try on new sports shoes, thereby marketing the brand to young athletes. And successfully so: Nike ascribes parts of their 5% revenue growth in Q3 2022 to their Metaverse store. Similarly, Gucci explored the platform to host the “Gucci Garden Experience”, a 2 week long virtual event, during which it sold a virtual bag for $4,115, which is 21% higher than the retail value. Skateboarding retailer Vans launched the interactive skatepark “Vans World”, where visitors could explore virtual skate sites with friends.
These are prime examples of how retail companies could market their products and services by replicating real-life shopping experiences within the Metaverse. These cases suggest that the Metaverse can be used to create brand awareness and show promising signs of gaining traction further down the funnel.
Should you jump on the bandwagon?
The predicted growth potential speaks for itself. By 2026 about 25% of people are projected to be browsing the Metaverse for at least one hour per day. Despite this, companies must tread carefully before tapping into the Metaverse. It will likely take longer than 5 years before it will become a mainstream channel. Thus, businesses need to be aware of the potential number of people they can reach before turning their attention to advertising within the Metaverse.
Furthermore, companies need to be aware of who they can reach. According to a survey by NewZoo, around 38% of gamers in the Metaverse are younger than 20, the average age being 27. If Gen Z is your primary target persona, you might have a bigger chance of success than if you’re trying to reach customers beyond 30. Moreover, as stated by Forrester, users only spend a fraction of their digital time in the Metaverse. Lastly, a potential hurdle could be the willingness of users to purchase virtual goods. While this may be commonplace in the future, today, many people are still wary of these kinds of transactions.
To conclude, the Metaverse will undoubtedly play a big part in the future, allowing businesses to tap into new ways of advertising their products and services through immersive experiences. While some global brands successfully ventured into these new lands, it will likely take some more years before smaller businesses can leverage the full potential of marketing in the Metaverse. I, for one, will undoubtedly keep an eye on the development around this topic. Our client, who I tried warming up to the idea of advertising in the Metaverse, will not be the last one to hear me advocating for it. If not now, then in 5 years.