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How the Metaverse will Change the Internet & Marketing

Welcome to the future.

You might have heard the term “Web 3.0” pop up everywhere. It’s the concept of the next generation of the Internet.

Currently, we’re at the Web 2.0 stage. Let’s say you have an awesome Instagram account. Meta is the one that owns the content you create on there. They reserve the right to ban your account. As we move towards a new age of the Internet, users will have more autonomy and control over their online creations, identities, digital assets, etc. There’s no doubt Web 3.0 will complement the Metaverse, which is what we’ll be focusing on today.

We’ll explore what the Metaverse is, how the concept came about, how it will change the technology landscape, and how marketing comes into play.

Here are the topics we’ll cover:

 

Editor’s Note : One thing to note is that Facebook (now known as Meta) is working on building the “Metaverse,” but other tech giants like Google are also developing their own. When we say “metaverse” in this article, we will be referring to this new concept as a whole, not just Facebook’s “Meta.”

What is the Metaverse

If you Google the term “metaverse,” there might be countless definitions, but here is what you need to know.

It is a virtual world where people can interact, socialize, conduct business and enjoy entertainment. It would be a virtual world powered by the Internet, physical reality, and augmented reality (AR).

Metaverse is the blend of the words “meta” (beyond) and “universe,” which is the term used to describe the futuristic version of the Internet.

Practically, the metaverse will be creating brand new experiences people want, offering new marketplaces to engage in commerce, and digital asset ownership that gets used in the world you interact with.

Here is Adobe’s mockup of what a day in the life of augmented reality might look like:

How Did the Concept of Metaverse Originate

The term “metaverse” was first coined in 1992 in the novel “Snow Crash” by Neal Stephenson. It’s about a dystopian society triggered by a pandemic (sound familiar?), which features a computer-generated world where users can interact in that’s made up of software and a worldwide fiber-optic network. The concept of technology enabling us to be immersed in a virtual environment has been around for a while. Before that, you can see other metaverse-like concepts in 1982’s Tron and 1989’s Power Gloves by Nintendo.
 

Why is the Metaverse Being Developed Now

We’re at the precipice of the creation of a new version of the Internet. Aside from Facebook and Google, other companies like Epic Games (Fortnite), Microsoft (Minecraft), Roblox etc. are working on their own version of the metaverse. Take a quick look at how many companies are currently working on developing something related to a metaverse:
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In April 2022, Lego announced that they partnered up with Epic Games (who created Fortnite) and are working to develop a kid-friendly metaverse that’s safe, interactive, and enjoyable. You can see that it’s not just a fad but a tangible concept big companies are investing in heavily.
Hot take: in a sense, Tech titans like Google, Amazon, and Facebook are the middleman of the economy.
On one side, we have brands selling products and services, and on the other end are the consumers. Advertising platforms are in the middle, selling these brands and pushing people to purchase, funneling them through the customer journey, again and again, pushing the economy along.
The metaverse isn’t created only for gamers; the goal is to create a new Internet landscape for people of all ages and walks of life to enjoy.
Sure, Virtual Reality has been gaining popularity in the past few years: Steam, Oculus, etc. have all been developing VR headsets and games for home consumption. But, COVID-19 was what shifted the general population online more than ever:

  • Virtual meetings
  • Live-streamed events
  • Real-time gatherings taking place in games
  • Snapchat filters that make you grow a beard
  • Eyeglasses brands that enable you to try on glasses virtually

These examples are all experiences gearing us up for a metaverse future. There is a higher demand for user input, new experiences, and better visuals. Online social events are becoming mainstream, and it’s a channel that brands shouldn’t miss out on.

Layers of the Metaverse

Just how many components will make up the metaverse? More than you think! Jon Radoff, an entrepreneur and game tech expert, created an informative slide deck on the metaverse. In it, he highlights the seven layers of the metaverse. We’ll break it down from the core.

Infrastructure

The infrastructure of the metaverse will be the hardware, software, and materials. For example, WiFi, Cloud storage, 5G (or even 6G), etc.

Human Interface

How will people enter and interact in the metaverse? This could be through mobile, tablet, desktop, or wearable technology like a VR headset or smartglasses. Maybe even layer in voice input and gesture tracking!

Decentralization

An interconnected, independent, and privately-owned system of computers will work together and provide private and secure access to the metaverse.

Spatial Computing

Ah, this is where we get technical. Tech experts will collaborate and develop geospatial mapping, 3D engines, VR, AR, user interface etc.

Creator Economy

As mentioned earlier, many companies are currently working on contributing to this layer. They will create tools and market assets for other companies (such as advertisers) to use.
 

Discovery

Here’s the layer where users gain entry to the metaverse. It could be through a browser, social platform, app store, ad network, etc.

Experience

Experience is the layer that internet users will enjoy. The metaverse is delivered in through games, social media, content consumption (such as theatre, video), online shopping, advertising, etc.
It’s going to take a lot of moving pieces and brilliant minds, and we can’t wait to see what the future holds!

Misconceptions of the Metaverse

There are a few misconceptions you might have when thinking of “Metaverse” at the moment. We’re here to demystify them all.

You need a VR Headset to experience the metaverse.

No. That’s not true. Even though VR headsets seem to be one of the current technology devices that enable you to experience virtual reality, it’s not accessible for everybody, and it won’t be the only way to experience metaverse.

As mentioned above, many companies are building out other ways to partake in a metaverse. Screens like smartphones, SmartTVs, and tablets are all integral to our daily lives. We predict that they will be essential for people to gain accessibility to the metaverse.

Take a look at these examples:

DJ Marshmellow hosted a virtual concert in the game: Fortnite. It’s a game available on gaming consoles (PlayStation and mobile. Players were able to attend the virtual concert, as their avatars in the game. It promoted a sense of community and exclusivity at the same time.

You can see the cool effects artists or brands could have in a virtual land. Ariana Grande also hosted a concert in Fortnite. They created themed interactive maps for players to explore prior to Ariana’s entrance, and had event-exclusive skins and emotes for users to flaunt. Virtual can be bigger than life and this could be experienced through a screen (TV or mobile), without needing a VR headset. This video shows the perspective of a user at the concert:

27.7 million unique users attended the concert – can you believe that?

The level of immersion and engagement is pretty neat, right?

Facebook (Meta) owns the Metaverse.

Meta repeated that not one company would own the metaverse. However, Meta’s got their eyes on the prize by investing heavily in building infrastructure to allow other brands and developers can use to create their own immersive experiences. This means Meta would own a lot of the real estate. Other tech titans like Google or Roblox will probably be “landlords” in the metaverse. Other companies would have to use their proprietary schemas and APIs. Cha-ching!

If I want to market my brand in the metaverse, I need to be an engineer.

Brands who want to extend their marketing strategy to the metaverse DO NOT have to be engineers to utilize the platform. As mentioned previously, over 90 companies are working hard on developing assets and APIs, which will make up the foundation and functionality of the metaverse. Brands would be able to utilize the tools other companies have built.

How Metaverse Will Revolutionize the Internet

We’ve seen the boom in popularity when it comes to NFTs. People enjoy art and culture. People also want to own digital assets. It’s the best of both worlds. The metaverse is where real-life, virtual reality, art, and experiences come together. Then, add on monetizing capabilities.

We had always emphasized the potential of gamers and their purchase power. People spend billions of dollars on skins (digital clothing) and accessories for their virtual avatars in games like Fortnite. Statista predicts that by 2025, the worldwide consumer spend on in-game purchases will hit $74.4 billion. It’s a huge monetization opportunity for brands.

A great example of this is Gucci. They designed a digital pair of sneakers for Hypebeasts. They cost $17. At this price point, the luxury brand becomes attainable for many people. It enables them to show it off online and in person. Here is someone trying it on in person:

Here are some more visual examples of how NFTs and the concept of the metaverse are creating a new frontier of digital fashion:
 

The metaverse concept is like the Internet in the 90’s, brewing like blockchains. It will break down barriers and merge with our daily lives. The metaverse is something to be experienced together, not something to be divisive over (much like how Facebook currently can be).

With Google and Facebook investing billions of dollars into it, it’s a force to be reckoned with!

Opportunities for Marketers in the Metaverse

The metaverse isn’t just 3D or 2D. Game tech expert, Jon Radoff says, “It’s about the inexorable dematerialization of physical space, distance, and objects“.

It’s not limited to gaming, but we anticipate that many gaming models will influence how it operates.

Radoff explains this flywheel model of live games and how it would translate to the metaverse. The metaverse will nurture the community by providing various activities, stories to share, and building events around cooperation and competition.

It is a repeated cycle of user engagement, social interaction, and monetization.

 

Apparel brand American Eagle (AE) has been an early adopter of the metaverse. Their CMO, Craig Brommers said their advertising budget is 100% digital, and they dedicate 10% to “innovation.” AE is thinking outside the box on creative ways to connect with their target audience, who are the tech-savvy Generation Z. They used Roblox to create a virtual “AE Members Always Club,” where players in the game Livetopia can join and dress their in-game avatars in AE’s latest spring styles. Their digital strategy also includes:
  • Partnering with Snapchat (branded augmented reality).
  • Offering NFTs as well as creating a virtual store inside the game, NBA2K.
Digiday references that American Eagle’s strategies on augmented reality and gaming generated $5 million in revenue in apparel sales in 2021. $2 million of it came solely from an AR holiday pop-up on Snapchat.


AE plans to offer immersive Snapchat experiences (with a Snapcode) in their physical stores. It’s a great example of how a company is combining its efforts virtually and in-store. The metaverse creates limitless potential in branding, engagement, and driving sales.

Emerging platforms allow early adopters to build audiences before they’re oversaturated. Growing on more established platforms becomes increasingly difficult with time. A hierarchy already exists in those places, making upward mobility nearly impossible.

“In a world shifting from Web 2.0 to Web 3.0, marketers will no longer be able to pay for eyeballs. Paying to grow a ‘community’ isn’t going to be possible. Investing the time and effort in understanding web3 and metaverse now, when the stakes are low, is a worthwhile investment that will pay dividends for decades to come.

– Brendan Gahan, Chief Social Officer & Partner, Mekanism

We look forward to immersive user experiences that elevate the way consumers interact with your brand. Let’s use one of our clients, SkiBig3, as an example. As the Marketing Organization for three world-class ski resorts in Banff National Park, what could they look like in the metaverse? We envision that users could try out AR ski experiences and walk through the resorts as their avatars, and be able to book their visit directly in the metaverse.

We’re always trying to think outside of the box in the marketing industry. The development of the metaverse allows our imagination to run wild!

Predictions for the Future

We need to know that the metaverse is still in the infancy stage. It is not growing at a larger scale yet, but all eyes will be on it, and many companies are working hard to make it come to fruition. Here are some of our predictions:

1. For the metaverse to reach full-scale adaption rides on a big player: Apple. It seems like an Augmented Reality on iOS is coming down their pipeline too. Plus, there are rumors that Apple is developing their own VR headset-like device, “Apple Glasses.” If the big three: Apple, Meta, and Google invest heavily in the metaverse, other tech companies are more likely to join in and speed up the development.

2. Technology experts will develop algorithms that track your eye movement on desktop and mobile devices. By studying how people interact with content virtually(like ads), we’d be able to decipher how users perceive your brand messaging by tracking their eye movements and online actions. This means the potential to track “true views” data, which gives marketers a deeper layer of user metrics. We can then make adjustments on how to optimize your ad better.
3. Once the metaverse is more developed and has a steady user base, there’s no doubt we will see ad placements in Display or Video formats throughout the virtual world. The potential benefit is because it’s in a virtual environment, ad blockers or skip the ad functions won’t be present.
We hope you learned a bit more about the future and possibilities of the new Internet and maybe even got the juices flowing for how you envision your brand in the metaverse!

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