February 4, 2022 What is the metaverse and what does it mean for brands?
It seems everyone in tech is talking about the metaverse. It came up repeatedly in panels at CES this year. Apple has been investing heavily in metaverse technology. Facebook even changed its parent company name to Meta. But the metaverse is more than just the latest vision of the future. It’s something brands need to start thinking about now.
So, what is the metaverse? During a panel at Advertising Week, Chris Olimpo, CEO and Co-Founder of the VR Esports company, Arcadia, described it succinctly as a digital layer on top of the physical world that people will be able to enter via an AR/VR device (like glasses or a headset). This could be as simple as AR information overlays on real-life people and objects, or as complex as spending most of your day completely in a VR world.
However you imagine the metaverse, what sets it apart from other virtual worlds (like Fortnite) is the immersive experience delivered by VR or AR. This is also its biggest stumbling block toward mass adoption. For the idea to truly work, a large percentage of the population would need to own some kind of VR or AR headset, be willing to use it continuously, and have access to a reliable 5G network. While the costs of headsets have come down, and the devices have become much easier to use, issues like comfort, eye strain, motion sickness, and battery life still need to be solved. Apple is promising some breakthroughs later this year. But with supply chain issues, inflation, and the recent news about 5G interfering with air travel, it’s unlikely that we’ll see something become the next iPhone just yet.
Beyond technology, there’s the issue of privacy. How willing will consumers be to use a device that has the ability to not only track everything they look at on the internet, but everything they look at. Period. Big tech has not exactly established a high level of trust in this area.
Some experts have speculated that the metaverse will begin as a solution for remote working or hybrid offices. There are already apps on the market that make it possible to set up a highly functional virtual workstation. Meta is also promoting its Horizon Workrooms as a competitor to Zoom. But it’s questionable whether 3D avatars talking in a virtual room can really bring the connection and collaboration of being together in the office. And completely checking out from reality is not an option for many people working at home, especially those with kids.
So the metaverse probably won’t be something we’re going to need to address in 2022 marketing plans. But that doesn’t mean we should ignore it completely. Now is also the time to think about how we can avoid the pitfalls of the current internet. How do we balance delivering personalized experiences for our customers with privacy? How do we avoid creating the next version of the cookie? And most importantly, how do we care for the mental health of our customers? Marketers have the potential to help shape the metaverse by being part of the discussion now.
Brands may choose to get behind the current leaders of the tech space and create a mirror of today’s internet with a small number of large companies running the show. The advantage of this scenario could be quicker adoption, with big tech capital going into subsidizing devices and broadband for consumers. It could also make it easier for brands to connect with audiences at scale, in the same way you can reach big numbers with an Instagram or Snap ad. The downside could be a few big companies creating walled gardens that cause brands to lose control of audiences and pricing. Consider the case of Facebook. Many brands created a presence on the platform early on and spent a lot of resources building their audiences. But then Facebook changed the rules; brands could only reach a small fraction of their audiences organically and faced rapidly increasing ad rates.
A different picture of the metaverse focuses on the concept of Web3. This is an idea to use blockchain to decentralize the web. Instead of the power being in control of a few big gatekeepers, platforms and apps would be owned by users—who work together to maintain the ecosystem and share profits. If the metaverse ends up running in a Web3 ecosystem, it will mean that the experience will be controlled by numerous organizations with consumers very much in charge. While this would make it more complicated for brands to reach audiences at scale, it could open up more platforms and allow marketers to deliver more relevant messages to consumers. A Web3 model might also generate more competition among platforms, which would keep prices in check.
While it’s unlikely the metaverse will be the ad-cluttered environment portrayed in Ready Player One, brands will undoubtedly play a big role in its future. By taking what we know now about respecting our audiences and connecting with them in relevant ways, we can help make this next phase in technology something positive for both businesses and people.
— Daniel Quentin Zuber