What Business Leaders Need to Know about the Metaverse

New Technologies

11 Sept

Bloomberg considers the metaverse “a nearly $800 billion market opportunity” and a recent Harris Poll found that 7 in 10 Gen Z and Millennials are interested in interacting with the metaverse. So, does the intense debate around the metaverse represent a paradigm shift or a flash in the pan? And, can you afford to dismiss it?

What Is the Metaverse Anyway?

The metaverse, also known as the virtual world or the meta-universe, is a term that refers to a virtual space where individuals can interact with each other as well as digital objects in a seemingly real and continuous environment - at least theoretically as the actual metaverse experience can be quite sobering. But, this technology has the potential to revolutionize the way we live, work, and interact with one another.

For business leaders, it is crucial to understand the significance of the metaverse and why they need to be familiar with it:

A New Platform for Business - The metaverse is a new platform for business, and it is rapidly growing. In the metaverse, businesses can create virtual storefronts, product showcases, and events, offering a unique opportunity for customers to interact with their products in a more immersive and engaging way. The metaverse is not limited by geographical constraints, meaning that businesses can reach a much larger audience than they would with traditional physical storefronts. Additionally, since the metaverse is a virtual environment, it can be optimized for maximum customer engagement, allowing businesses to deliver more personalized and interactive experiences.
Increased Productivity and Collaboration - The metaverse can also increase productivity and collaboration in the workplace. Virtual workspaces and meetings can be set up in the metaverse, making it easier for employees to communicate and collaborate with one another, regardless of their physical location. This is especially beneficial for companies with employees in different parts of the world. With virtual reality technology, employees can also be trained in a more immersive and engaging way, leading to increased knowledge retention and overall productivity.
A New Revenue Stream - The metaverse represents a new revenue stream for businesses. Companies can monetize their presence in the metaverse through virtual real estate, virtual products, and other in-world services. This opens up a whole new market for businesses to tap into, offering a unique opportunity for companies to generate revenue and grow their brand.
A Competitive Advantage - Being familiar with the metaverse and incorporating it into their business strategy can give companies a competitive advantage. Companies that are ahead of the curve in terms of metaverse technology will be able to differentiate themselves from their competitors and offer a more innovative and engaging experience to their customers. This can lead to increased brand recognition and customer loyalty.
A Better Understanding of Customer Behaviour - The metaverse offers a wealth of data about customer behaviour, allowing businesses to gain a better understanding of their target audience. In the metaverse, businesses can track customer interactions, preferences, and buying habits, allowing them to better tailor their offerings to meet the needs and desires of their customers. This data can also be used to inform future business decisions and marketing strategies.

The reality though is that there’s no hard and fast definition of the metaverse because it’s more of a broad representation of the next phase of the Internet.

A more immersive, integrated, and interconnected digital space where people spend time. In many ways, we’re already in the metaverse, a version of it, or at least its infancy. We’re already glued to our screens; the metaverse works to further remove barriers between us and the digital world where much of our lives are spent anyhow.

Our meetings are largely digitized. We shop online. We hang out on social networks. Now we’ll move closer.

Video games are at the forefront of the metaverse development with Fortnite creating its own world. Roblox, worth nearly $40 billion, doing the same. Concerts are happening in the metaverse. Gear like VR headsets is set to boom with PricewaterhouseCoopers predicting 30% revenue growth in the VR industry by 2025; more than any other media segment.

The Metaverse for Brands

As mentioned earlier, brands are going in on the metaverse.

Apple, a $2 trillion company, recently announced and teased its foray into AR and the metaverse, with Reuters noting that CEO Tim Cook’s announcement prompted a “strong investor response”. Adding “the company has 14,000 AR apps on its App Store, and Cook suggested this number will rise with further investment”.

It’s not just those in the tech world that are entering the fray though.

TIME Magazine has a newsletter dedicated to it called Into the Metaverse, a Web3 community initiative called TIMEPieces, and also made some of their iconic magazine covers into NFTs – and raked in a cool $435,000.

Adidas rocketed into the metaverse with a splash, collaborating with the crème de la crème of NFT projects; Bored Ape Yacht Club, Gmoney and PUNKS Comic to launch their own NFT collection, also called Into the Metaverse. They sold out in a matter of hours, making $22 million in the process. They went a step further and bought virtual land in the Sandbox metaverse, joining other companies who have spent millions doing the same.

The Metaverse Comes With Great Potential for Communications

On a basic level, the metaverse means another touchpoint that communications pros and marketers can connect on. Not only that, it’s an avenue built on ever-evolving tech which prioritizes deeper immersion.

For example, in-world, that’s to say in the metaverse, advertising that’s native to the ecosystem and analogous to the real world, like billboards. Yes, virtual worlds will have – already do have – virtual billboards.

Of course, transparency and trust are foundational elements of this decentralized environment, something that shouldn’t be taken for granted or overlooked when trying to leverage the space for PR and communications.

As Influencer Marketing Hub points out, “you can’t just enter a new platform without taking the new format into account. In Roblox, for instance, brands gain more traction when they partner with members of the Roblox developer community in creating items and experiences.”

Perhaps most importantly though, comms will likely become more and more data-driven and targeted because new use cases in AR and VR simply create more data. VR headsets open up the possibility to track eye movement and where exactly attention is going to improve the placement of messaging.

Concerning AR, Harvard Business Review drives the point home, “by putting information directly into the context in which we’ll apply it, AR increases our ability to absorb and act on it.”

Opportunities

The rapidly growing sector presents a lot of opportunities for communicators.

Gamification – One of the most unique marketing tools to arise with the metaverse is gamification. The Cambridge Dictionary actually does a perfect job defining it and explaining the benefit; “the practice of making activities more like games in order to make them more interesting or enjoyable”. The metaverse is practically designed for this and almost everything we do can be gamified to enhance the experience. In-world product sampling is a good example. You can now use AR apps on your phone to see interior design options before buying anything. Snapchat has been using AR for years. Burger King used AR to allow app users to burn rival fast-food ads and score discounts.
Metaverse Developer/Creator Collaborations – Collaborating with developers and creators in the space helps ensure your messaging is delivered correctly and with the most impact. Clothing retailer Forever 21 hopped into the Roblox metaverse “by launching with some of the platform’s biggest fashion-forward content creators and influencers.”
Product Placement – Just like the film world has lucrative product placement opportunities, so too does the VR and AR world. Nike recently bought RTFKT, a company that makes sneakers for the metaverse.
Events – The metaverse is chock full of events, from concerts to parties to corporate meetups. Creating virtual events around your communications or PR goals is a chance to engage in a wholly different way.

Risks

It’s not all sunshine, roses, and endless upside though. The metaverse does come with risks of its own.

Privacy – All the current concerns about privacy can be applied to the metaverse because in the end, data is what drives the experience – and what improves it. Free services like Facebook relied on the exchange of personal data to sell to advertisers, will the metaverse function the same? It remains to be seen. As it stands now though, moving even more into the digital world with new data streams coming from wearables, microphones, and more means potentially far greater privacy risks. What’s sometimes billed as taking data back from the mega-corporations can quickly become a world of even less privacy.
Cyberattacks – Naturally, this is a major concern and potential cyberattacks present an even larger risk than privacy. If you’ve bought virtual land in one of the metaverses and that platform suffers an attack, what happens? A world built from 1s and 0s is inherently hackable and it’s not clear if the metaverse is ready for attacks. Moreover, the legal framework to deal with breaches in cybersecurity in the metaverse is vague or nonexistent.
Scams – It’s something like the wild west out there and it’s not always easy to tell what’s legit and what’s fake. NFT scams are rampant, OpenSea, among the largest NFT marketplaces, said: “over 80 percent of the items created with this [free minting] tool were plagiarized works, fake collections, and spam.” The publishers of Outerverse had to issue a warning about an NFT scam tied to their game.

Metaverse – A Final Thought

Will the metaverse of today look anything like what we end up with down the road? It’s tough to say but probably not. What is clear though is that people are embracing this new space and from the perspective of business leaders and communication experts, there are tantalizing new possibilities that come with it.

Whether you believe in it or not, it’s wise to start getting some exposure to the metaverse to start grasping its potential.

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