In recent months we’ve seen a slew of brands buying up virtual retail estate in the metaverse. Large brands including Adidas, Samsung, JP Morgan, and HSBC have shelled out considerable sums on virtual plots in top virtual worlds—such as Sandbox, Decentraland, Cryptovoxels, and Somnium—that have cornered the metaverse real estate market.
HSBC acquired land in The Sandbox.
After acquiring a piece of virtual real estate in The Sandbox metaverse back in March, Suresh Balaji, chief marketing officer at HSBC Asia-Pacific, said in a statement: “The metaverse is how people will experience Web3, the next generation of the Internet—using immersive technologies like augmented reality, virtual reality, and extended reality.” But should all brands enter the metaverse? Are some sectors more suited than others? And at this nascent stage, does it even make sense for brands to be rushing this process? "The metaverse is the next digital frontier and is naturally impacting every sector that already has a digital presence," says Emma Chiu, global director at Wunderman Thompson Intelligence.
According to a March 2022 survey Wunderman Thompson Intelligence conducted in the UK, US and China, people are expecting the metaverse to disrupt all industries with entertainment (90%), advertising (89%) and retail (86%) leading in terms of impact. "It’s not so much about rushing to get the foot in the door, but putting a long-term metaverse plan in place," says Chiu. "After all, the metaverse is here to stay so all brands will eventually need to be planning how they fit into the metaverse ecosystem." Just a pipe dream? Sashi Nair, head of strategy at VCCP+, believes it's better to take a couple of steps back from the gold rush and interrogate the role of the metaverse before jumping in. "The metaverse is not a compelling end-game yet, and it is light years away from having a real, meaningful impact for anyone and any brand," says Nair. "There are a thousand different interpretations of what the concept even is, what it could do, what it might be good for, and what success would look like for any brand."
However, Nair can understand why the industry is so caught up in the FOMO surrounding the metaverse. "After all, a self-contained, immersive world where everything is curated and controlled is a tempting idea. But when you sieve through the hype and Nostradamus-like soothsayers, the business, strategic and practical questions of audience, purpose and effectiveness are left conveniently unanswered." —Sashi Nair, VCCP Instead, Nair believes the question we should be asking is what brands are currently missing out on by chasing this metaverse pipe dream. "
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In addition to pouring investments and efforts into what is still pure speculation, the single-largest unmet, underserved, undervalued opportunity in today’s marketing is being criminally ignored—the world of gaming,” he says. Instead of looking at tea leaves and speculating where and what the future looks like, Nair adds it’s about time for the industry to wake up and seize the opportunities that the world of gaming currently offers, rather than chasing the "metaverse pipe-dream". "
For 3.2 billion people, gaming is a passion, a lifestyle, an in-home and out-of-home experience, something they read about, write about, talk about, and watch," says Nair. "This multiverse of experiences, communities, influencers, social posts, YouTube content, Twitch streams and Discord servers represent an incredibly established media landscape that is unlike any other in today’s marketing toolbox." Future promises Nevertheless, others are a little more confident that the metaverse holds more imminent promise.
The South Korean government recently invested $US3.3 million in ‘Metaverse Seoul’—a platform enabling industries and businesses to thrive, and government agencies to better service citizens. Need to get your passport renewed? No need to leave the house. Just pop on your headset and meet their staff in a virtual administration building. "Businesses and governments definitely need to conduct research and prepare for an eventual entry into virtual worlds," says Chris Dodds, co-founder and managing director, digital, at Icon Agency. "The big questions are which metaverse do you invest your time and money in? How will you migrate content from one verse to another? What are the ethical considerations, and how will users be surveilled and laws policed?"
Michael Patent, founder & president of Culture Group, says that "most brands need to understand that the metaverse and virtual worlds are just one element of Web3”. "Not everything needs to be anchored in a ‘virtual world’… Web3 includes wallets, tokens, virtual goods, avatars and these are the real engagement tools of the future, not playable worlds." —Michael Patent, Culture Group Patent believes that blockchain wallets are the next major engagement channel. "It’s where currency resides and where commerce occurs. For that reason, real-world brands with massive touchpoints—think retail and FMCG—are major growth areas,” he says. Can non-endemic brands find creative ways to enter the metaverse? Earlier this year, Viv Craske, Founder of Geeky Foody, a consultancy working with food tech and retail tech startups, caused a stir online when he said in a LinkedIn post that the metaverse currently has no discernible value for supermarkets and CPG brands.
Craske wrote: "People do not want to do their grocery shopping in a virtual supermarket in their spare time. We've been here before with AR experiences like Blippar. That didn't make sense for grocery brands and neither does the metaverse." He's probably right. One might typically not waste time going to a virtual supermarket to buy virtual bananas. However, there are some sectors that are famously well-suited to the metaverse and its virtual worlds: gaming, music, sport, fashion, film travel and tech, to name a few. But beyond this, can non-endemic brands find creative ways to enter the metaverse?