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Introduction
Every new change comes with its unique challenges and opportunities. The new frontier in digital marketing is Metaverse and people in the industry are still apprehensive about this new medium. This is natural, as Metaverse is a new term even to those who have spent years in this industry. This is now like the Wild West of the digital marketing world; the quicker you learn to navigate it and conquer it, the better you will be to stay ahead of your competitors and face the future. Hence whether you are in the digital marketing industry or someone looking for a digital marketing company, you should know more about Metaverse and how it is going to change the world of digital marketing in coming years.
What is Metaverse?
Let’s start with the most basic question: what is Metaverse? If you see the term, it is not something that has been created in this century, but something that came out of the pen of Sci-fi author Neal Stephenson in 1992 in his novel “Snow Crash”. Today, Metaverse means a parallel world which is 3D where people can live a 3D life of their own just like in the real world, socializing with friends, playing games, buying, and so on. Metaverse uses two technologies to create this virtual world: AR or Augmented Reality and VR or Virtual Reality.
The term got a further boost when the dystopian novel “Ready Player One” was published in 2011 (later made into a movie). In the real world, it was the gaming industry that was the first adopter of the game Second Life in 2003. Later, the concept of Metaverse was strengthened by Microsoft when they purchased VR company AltSpaceVR in 2017. The concept of Metaverse and using technologies like AR and VR with the launch of the game Pokémon Go. The next few years saw rapid development from technology giants like Facebook, Samsung, Sony, and others in creating gears to explore this 3D world. The emergence of digital money and NFTs (nonfungible tokens) gave a boost to the virtual economy as this currency could be used for transactions in Metaverse. In 2021, Facebook changed its name to Meta signalling that the company was going to massively push for all things related to Metaverse, be it online socializing to online marketing.
Why is Metaverse important to digital marketing?
Marketing means reaching out to people to sell products; hence as the places where people frequently change, so does the world of marketing. With people, especially the younger generation that is now the main earning generation, the Millennials and Gen Z, starting to flock to the world of Metaverse, marketing, especially digital marketing naturally followed them to Metaverse. To further show how important it is for the industry to adapt to Metaverse, here are some interesting statistics.
In 2022, the worldwide Metaverse market stood at 65.5 billion USD, with projections soaring to 936.5 billion USD by 2030. The Metaverse, where reality and the virtual realm intertwined, attracted sellers like never before.
Currently, around 400 million users explore the Metaverse monthly, with an upward trajectory driven by the increasing affordability and accessibility of VR headsets and related hardware. By 2024, an estimated 34 million VR headsets will be sold worldwide.
Beyond mere exploration, users began purchasing virtual items encountered in the Metaverse, and a growing number of Gen Z consumers eagerly spent on digital acquisitions. Remarkably, nearly half of Metaverse’s users were 13 or younger, favouring platforms like Fortnite, Minecraft, and Roblox.
Projections indicated that by 2026, approximately 25% of the global population would devote at least an hour to the Metaverse. Meanwhile, the global market for VR, AR, and MR (mixed reality) was anticipated to surge to 250 billion USD by 2028, as these technologies fuelled the Metaverse’s growth.
In light of these statistics, it became evident that the significance of the Metaverse in the digital marketing industry would outshine other avenues.
The opportunities of digital marketing in Metaverse
From the above, you can understand the importance of Metaverse for brands. With the right marketing campaigns, brands can offer their consumers an experience that is immersive, rich, and better than any other type of marketing campaign.
1. It is not overcrowded
As said before, this is an emerging field, still now the Wild West Frontier of digital marketing. So, as an early adopter, you will have a head start over others. Yes, sometimes it is a gamble to invest as an early adopter, however, you can always start small in Metaverse. It can be something as small as an advertisement banner in a popular e-sport game to catch the attention of your target group. When you see promising results, you can go ahead with a more comprehensive campaign designed especially for Metaverse.
2. You can combine the real world with Metaverse
Metaverse can easily be combined with real-world events and marketing plans giving you a cross-channel mix. This is very important in today’s world as people get information through various channels like social media, electronic print, and other channels. So, if you are not present in some form in all of them, then you can’t be in their memory. This is why having your presence in Metaverse is so important. Furthermore, Metaverse can easily be integrated into your real-life events or even your store. For example, AR in your store display can give more information about your products. Or have a Metaverse version of a real-life promotion simultaneously. Fashion giant Gucci recently adopted this when they combined a Gucci Garden in Minecraft experience for two weeks with their real-life installation of Gucci Garden Archetypes in Italy.
3. It is not real
People like their lives in Metaverse because it frees them from the constrain physics and other natural laws put on us in real life. Hence in a Metaverse, a man can fly, float in space, live in buildings that are fantastical, and so on. Hence your creativity can get a full release when you are designing anything for Metaverse. You can defy the laws of physics and let your users experience your product in the most innovative way possible. Hence you can catch the attention of people through unique storytelling, imaginative ads, and other promotional campaigns.
4. It is not pricey, yet
As said before, Metaverse is still an emerging world and as such, the marketing, advertising, and branding rates here are comparatively lower than any other type of online marketing. The cost of online advertising especially for Google Ads is going quite high, especially for popular keywords. The cost of advertising in the real world is also high, but when you are advertising in Metaverse, you can use the same style as in the real world but at a fraction of the cost! We call know that only top-tier companies can afford to have a billboard during important sporting events; but in an e-sport event, even a new company can afford to run a virtual banner or billboard and attract potential customer’s attention.
5. Get new audiences
In the coming years, the main earning generation will be Millennials and Gen Z. These two generations are different from the generation before, they get their entertainment, news, and even social life through online interactions with each other. This is why, you have to be where they are which is increasingly, the Metaverse. Millennials and Gen Z on average spend 6 to 7 hours a week just playing online games, not to mention other forms of using Metaverse. Hence, if you want to catch their attention, you have to be in the places they frequent.
Another opportunity that Metaverse gives you in terms of digital marketing is that it gives you a chance to “catch them young”. Metaverse platforms like Roblox or Minecraft have users who are 13 and even younger; and if you can build your brand name here, you will have brand loyalists for life! It will be like the brands that Gen X saw while growing up on their TV; have stayed loyal to them because seeing those brands is nostalgic and reminds them of their childhood.
6. Can expand in a great scale
The scale at which Metaverse can grow cannot be matched by anything in real life. Take, for example, eCommerce. It is projected that in India eCommerce market is already USD 99 billion and will go up year to year. Metaverse can help people in eCommerce businesses to rapidly expand their brand awareness and garner new customers because it has a huge active user database. The number of active users of Facebook in India currently is 2.9 billion and this will increase in the coming years. And that is the statistics from just one social media platform, while there are so many more! Hence by advertising in the Metaverse supported by these social media platforms, any business can scale up in an unprecedented manner which they can never come close to in the real world.
The challenges of digital marketing in Metaverse
It is true that Metaverse is a very new concept and an emerging technology, and hence also has its own set of challenges when it comes to digital marketing. This is an unknown market for many, and hence there are challenges that you may come across while navigating it.
1. Security
One of the biggest challenges that digital marketing faces and will face is regarding security, especially data privacy. Moreover, as said before, this is still the Wild West of the internet, and there are no definite guidelines regarding safeguarding users’ data and environment when they are in the immersive environment of Metaverse.
With many teenagers and even children younger than 13 joining Metaverse, there need to be strict guidelines in place to make sure that they are safe from online predators and that they are shown ads that are suitable for their age only. Companies that are operating in Metaverse also need to have stricter guidelines regarding user data collection and use of third-party cookies so that users feel safe when they are in Metaverse.
So brands need to be aware of all the risks of Metaverse in terms of security before opening their virtual store in Metaverse or displaying their banner and ads in-game or any other way.
2. Deciding where to market
Metaverse is not one single area; many platforms are included in Metaverse. Hence the second challenge of Metaverse is deciding where to run your digital marketing campaign. Just like in real life, there are so many things going on in Metaverse in real-time that it may become difficult to find just where to advertise. Take, for example, Roblox. This immersive gaming platform is primarily for teenagers and if your target audience is not in that age group, you won’t get much conversion by running a marketing campaign here.
Hence, what a brand or its digital marketing partner should do first is survey the immersive platforms available to them. They should be sure of the demographics of the platform and run the campaign only when it fits their need.
3. Not enough hardware gears
Right now, going for an immersive Metaverse experience is costly as VR and AR sets cost quite a much. This is why people are apprehensive about digital marketing in Metaverse because there aren’t many people who have the right hardware to enjoy this world. At present, this is a USD 624.3 million industry, and its user base is going to be 1, 227.0 million by 2027. However, when compared to smartphones, this is not that widespread, and this is a trend that is seen worldwide. So, for Metaverse to become the main player or the next phase of the internet, it needs to grow globally to the present number of smartphone users in the world which is nearly 83.89% of the whole global population.
4. Not enough metrics to measure
At present, there aren’t enough metrics to measure how successful was your Metaverse digital campaign. Neither there is a tracking system in place to calculate ROI. Hence, for digital marketing companies, it could be hard to show their clients just what they are spending their money on! But this is exactly like what social media was at its inception, so if brands and companies have trust, do their due diligence, and invest wisely in marketing for Metaverse, they can soon have metrics and tracking in place to see just how their presence in the virtual world of Metaverse is helping them grow in the real world.
Conclusion
Metaverse is in a crucial moment where it is just starting to gain prestige and shading the concern that “it is just another fad”. Hence all the participants be it the platforms, the digital marketing companies, brands, and even Government bodies need to come out and create regulations and an environment that is safe and owns its responsibility. Then only can users truly live in the Metaverse just like in the real world and communicate, play, and shop without worrying about privacy or identity loss.
