Brands and the Metaverse: Reservations Around the Hype
There is no shortage of talk surrounding the Metaverse. And with the recent rebranding of Facebook to Meta, along with several other high-profile Metaverse launches and announcements, it is impossible not to get caught up in all the chatter.
But as a brand professional, I am most interested in how the Metaverse will impact brands and how communications and brand leaders can prepare for it.
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Is the metaverse a hot topic for the boardroom?
There is no doubt that the Metaverse is becoming increasingly important for CEOs and board executives. For brand leaders, the interest lies in the Metaverse’s potential to provide new opportunities for creating and building brand awareness. After all, brands are organisations’ most valuable intangible assets, and board members are always looking into ways they can orchestrate and influence the relationships between organisations and the outer world.
What IS fundamentally different
The transition from Web2 to Web3 is underpinning the real shift to what we now call the Metaverse. Let me talk a bit about Web2 and Web3. At first, the internet was a hype, but it quickly became mainstream and changed the world. It later evolved to Web2, the version of the internet most of us know today: one dominated by companies who provide services in exchange for your data.
Web2 has brought us developments in technology that have allowed users to share their thoughts and opinions with others. This created new ways of organising and connecting with other people and promoted a greater degree of collaboration.
However, there are problems with Web2 in the areas of ownership, monetisation, and versatility (2022, Lamiya Boumlaki & Sajid Ismail). These developments now led to the creation of Web3, which is the protocol layer for peer-to-peer, uncoupled and user-centric applications — all supported and made possible through blockchain technology. Combined, we call this The Metaverse.
Where the Metaverse is today
Technological developments, particularly in immersive and AI technologies, have raised the excitement around the Metaverse. Some of the most influential companies have made significant moves to get ahead and move into the Metaverse of things. The most well-known of these is Facebook’s rebranding to Meta and its series of large acquisitions of VR, gaming, and AI companies. Microsoft is making moves, too, having already started the process of acquiring Activision Blizzard – a company of 10,000 people and owner of such popular games as Candy Crush and Call of Duty. This raises Microsoft’s position in the gaming industry, putting them just behind Sony and Tencent. More recently, Microsoft launched their own Metaverse called Mesh. Entertainment giant Disney is also gearing up for entry into the Metaverse race. US-based GPU leader NVIDIA also recently launched the Omniverse software — a platform designed for artists and creatives to build virtual worlds.
But as futuristic and exciting as these plans are, the Metaverse remains within the realm of gaming. Most consumer brands launching and auctioning off NFTs entered the Metaverse through collaborations with gaming platforms. For example, luxury label Balenciaga launched a series of exclusive digital items for the popular game Fortnite in September 2021. Later that year, department store Selfridges and clothing label Charli Cohen launched ‘Electric City’, a virtual city where gamers can purchase both digital and physical items. Fashion house Gucci also launched the Gucci Garden Experience, a two-week digital art installation on Roblox that same year.
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Areas of concern for Chief Communications Officers and Brand Leaders
What I find most concerning about the Metaverse for brand leaders and chief communications officers is the issue of trust and integrity and its impact on brands both within and outside the organisation.
The shift to stakeholder capitalism and the impact on brands
The shift from shareholder to stakeholder capitalism has elevated the relevance of brands and dramatically changed their role. This seismic shift is driven by the rise of ESG metrics and the subsequent push for non-financial KPIs. In this decade, we can expect to see more relevance on earned and owned media and less on performance or paid marketing. Therefore, it is crucial to understand how mental presence and preference with audiences are built within and outside of the Metaverse.
Integrity and trust
The immersive nature of the Metaverse also inevitably raises the question of integrity. Web2 has already enabled the biggest tech companies to own our data and exponentially grow their purchasing power. Their having the advantage to move into this new realm before everyone else only relegates too much power to just a handful of people. We live in a world where one man could buy Twitter — and he has — and I don’t think we should want that. No good can come from giving that much power to a select few.
The Web3 was supposedly designed to facilitate the decentralisation of data ownership. But the big tech companies setting up pioneer camps in the Metaverse warn of a looming monopolistic space that threatens the very tenet upon which Web3 is founded.
For so long, companies have focused only on becoming digital. And then, it became about a digital movement focused on using data, algorithms, and AI, virtually reinventing consumer decision-making and turning companies into data enterprises. However, for these new systems to create value for stakeholders, especially in a decentralised system such as Web3 and the Metaverse, they must be designed and managed responsibly.
“It is crucial to understand how mental presence and preference with audiences are built within and outside of the Metaverse.”
This is a hype… for now
As with any emerging and disruptive technology, the marketing of innovation precedes the execution and its scalability possibilities. The real question is then about gauging when the time is right to invest in innovations heavily. Until then, you can learn, experiment, fail, and start over. We have seen it with the VR technologies like Facebook’s Oculus Rift, which has failed to gain ground beyond the gaming realm. You can also see this with the social app, Clubhouse, which gained momentum at the height of the pandemic but quickly plateaued after being opened for Android users.
With the emergence of new devices and vocabulary that come with the rise of the Metaverse, it is also essential for companies to take this time to learn, be curious, read and keep up.
Companies and especially brand leaders should also look into bodies designed to police the corporations’ responsible use of these technologies. The Data and Trust Alliance, for example, is a not-for-profit consortium established to bring together leading organisations to “learn, develop, and adopt responsible data and AI practices.”
The paradigm for brand management is shifting to orchestrating brand experiences, and the Metaverse is one where you can create immersive experiences in the future.
Is it time to hit the panic button yet? Absolutely not! However, it is time for learning, immersion, curiosity, experimentation, failure, and a steep learning curve in the domain.