What advertisers need to focus on as they prepare for the metaverse

Web3 is here and the metaverse has arrived along with it. It is no secret that this “embodied internet” is increasingly becoming an important channel for companies around the world, but most do not know how to interact with it yet. Even though it is still in early development, the metaverse holds the opportunity for brands to redefine how they interact with consumers and ensure long-term success in the future. Brands can’t afford to not plan today for the experiences they will deliver in the metaverse for years to come. 

Advertising and marketing in the metaverse particularly require a smart approach to ensure ads are relevant, respectful, contextualized and reward-based. Brands will be expected to provide real value and embed themselves seamlessly into the context of the environment that surrounds them. 

What we have learned from Web1 and Web2

Web1 introduced the internet to us all. In the beginning, the internet only allowed tools for publishing static information users were simply able to read. 

In Web2, webpages were added where users can upload content, add comments, create profiles and much more. Internet users were actively involved in shaping the internet we know today. 

Unfortunately, this active involvement allowed marketers to take advantage of consumers’ data. It spurred the creation of trackers like cookies and an entire marketplace built around transacting consumers’ data. 

Taking all this information and data that consumers shared online, marketers started targeting advertising based on behavior and audience attributes. Rather than making digital brand experiences more relevant to consumers, audience targeting created a “creepy” factor. 

After countless data breaches and scandals like Cambridge Analytica, consumers are becoming more cognizant of the fact their personal data is no longer their property. International legislation and policy changes are trying to retroactively address the privacy pitfalls of Web2. However, rectifying the issues with consumers’ privacy as an afterthought has proven to be a big challenge. 

With Web3 and in the metaverse, respect for consumer privacy is ingrained from the start. Users are still able to read and write content in the metaverse, but also have ownership and the ability to monetize their content and the virtual world they are helping to create. 

All for one and one for all 

Most metaverses are following a model where there is not one single owner. It is a decentralized autonomous organization (DAO), meaning that all participants have an equal vote of who is going to be allowed in that environment and universe. 

By not having one leader in control, we can expect that the collective group will demand high standards around equity and data privacy. In essence, the users are creating the DAO and they are looking out for the group as a whole rather than individuals. 

Share success, reward loyalty 

In the metaverse, success is shared and loyalty is rewarded.  

Content creators bring thousands of new visitors, interactions, and subscribers to Web2 platform businesses. However, to date, the businesses have not shared that success at a rate that is equivalent to the value the creators drive for the platforms. For example, only an estimated 0.2% of artists with music on Spotify are generating over $50K in royalty payouts per year while Spotify reported $10.9 billion in annual revenue in 2021. 

However, in the metaverse, it is easier to reward users and content creators in non-fungible tokens (NFTs) or other cryptocurrencies. For example, Spotify could reward micro-shares of the company as crypto to the artists who help sign up new subscribers and drive ad revenue. 

Brands like Adidas and Nike are selling NFTs, but soon consumers who cannot afford high-dollar NFTs will want to be rewarded for their brand loyalty. For example, Adidas could create a series of NFTs specifically for consumers who display an Adidas poster on their virtual property, who encourage 100 of their friends to watch an Adidas ad or who regularly outfit their avatar in Adidas-branded outfits. This creates an opportunity to reward loyal customers who are willing to act as brand ambassadors while increasing brand awareness in a relevant and timely manner amongst an audience with shared interests. 

Brands also have an open line of communication with consumers in the metaverse since all users have input on what their environment or experience looks like. Loyal Adidas collectors could weigh in on what designers they want the brand to collaborate with in the future, preferences for how they want to celebrate a new shoe drop or show exactly what color pallets they’d prefer for a new line. 

The metaverse is supposed to help rebalance the inequalities and discrepancies in our current system. It creates an easier path for platforms and brands to share success with their content creators and users. 

Advertising 3.0 

As brands are starting to experiment with advertising in the metaverse, they need to ensure their strategies are specifically mapped to the virtual worlds and the gamification at much of its core. 

In the metaverse, consumers are carefully curating their virtual environments to immerse themselves in the experiences that interest them. It is imperative that the advertising in these worlds is contextually relevant to environments like NikeLand or experiences like Rift Tour in Fortnite. Each metaverse has a different vibe, brands need to shape their activations based on their contextual intelligence of the environment. 

Consumers in the metaverse wear headsets, so advertising messaging should be subtle rather than loud or brash. For example, the dated tactic of increasing the volume of a television spot to ensure viewers hear your message would backfire in the metaverse since you’d essentially be screaming into consumers’ headphones. 

There is a sense of playfulness in most of the metaverses, so light and humorous immersive brand activations like Louis the Game from Louis Vuitton have worked well. 

Widely-targeted advertising based on audience demographics or behaviors won’t work in the metaverse. The effectiveness of that strategy is already declining now as Web2 marketers are shifting to more privacy-safe contextual targeting. 

Building a creative connection between a brand and its surrounding environment will be a critical cornerstone for successful metaverse advertising. Consumers have unprecedented control over what they see, create and engage with in the metaverse, so successful brands are starting to reimagine the ways they interact with consumers in a contextually relevant way. 

Doug Stevenson is CEO and cofounder of Vibrant Media.