Metaverse: Is There Advertising Potential Behind this Popular Keyword?

Opinions on the metaverse, and its advertising potential, stretch between the two extremes: the metaverse is a misguided and (paradoxically) anachronistic view on the future of online interactions OR the metaverse is the actual future of everything, where all the recent inventions (AI, blockchain) neatly come together to offer a new quality of online presence.

Where do YOU stand?

For us – the team behind the best ad tracker on the planet – this discussion is best left to editors of tech portals. We want to assess the advertising potential of the metaverse as is and as it may be to the best of our predicting capabilities.

Extremes rarely reflect reality – but trends do. Let’s look at what metaverses (yes, plural) have to offer in terms of advertising opportunities and how companies bet on their future.

Metaverse: A concept enthralling the tech world

No good article on the topic can start without bringing up Neal Stephenson’s book ‘Snow Crash’ that coined the term. But unlike most articles, we will also point out that meta in Greek means ‘beyond’, and in some senses ‘be dominant’. ‘Going meta’ is a power-move that indicates the need to move away from the current context and offer something new.

This brings us nicely to Facebook’s rebranding from a few years back. The world’s biggest social platform is undergoing some credibility problems and is struggling to keep finding its relevance for modern users. The rebranding and big investments in the metaverse look like an attempt to distance the company from the business associated with an old Internet model.

So, what is this new Internet model about?

In short, the metaverse is about adding an additional dimension to the online experience. While we experience apps, videos or websites on the flat screen of a mobile device, laptop, or desktop, the metaverse uses AR/VR technology to fully immerse a viewer in the 3D experience. There are, however, ways of experiencing the metaverse without special hardware – more on that later.

Metaverses (there are many platforms that offer this kind of experience) create a virtual world where users can meet, work, and socialize or play games. Participating in such an experience requires pricey hardware, so we can already say at this point that for now, metaverses are not available for masses.

Metaverse is expected to be one of the dominant trends in the advertising of the future.

Although Mark Zuckerberg claims that over a billion people will be a part of this new online experience by the end of decade, there’s still a long way to go: the current user base of various metaverses is estimated to be 400 million, but most of that number are video games turned social hubs… not the type that Meta is building.

Let’s go over some popular questions that advertisers may have about metaverses:

Which metaverse is the best?

It’s not possible to say which metaverse platform will be dominant – maybe Meta’s Horizon Worlds, maybe some other. Generally speaking, there are two major types of metaverses that are being created.

The first one is developing a whole new world from scratch. This is the approach that Meta took when they created their Horizon Worlds platform. There are other platforms such as Decentraland that aim to create this virtual space and make it attractive for users.

However, there’s a whole separate genre of metaverse platforms that grew in a more organic way. They are simply video games that offer massive online capabilities in a way very similar to what the true metaverse platforms want to offer.

They weren’t designed to be living virtual worlds from scratch but they have turned into them. The prime example is Fortnite: a free-to-play battle-royale-type shooter that became a meeting point for concerts, film screenings and various other activities usually associated with the virtual reality experience.

The other example is Roblox, were players can create their own virtual worlds within the game.

Accessing other users and content from these games doesn’t require any specialist hardware other than a semi-decent gaming computer. Granted, immersion is not complete as you still experience the world through a flat screen, but this experience blends gaming, social and corporate contexts more naturally than fully-immersive metaverse platforms.

How can advertisers be present in these worlds?

Most companies in the mid-ninties viewed a web page as a place to provide information and maybe pitch some products a little, but they certainly would not be talking about brand identity and connection with customers.

The case is similar with the metaverse: companies still need to figure out how to be present there. Most that try advertising there create some experiences such as virtual pubs or gardens where people may engage with a brand. 

This type of advertising is costly and is reserved for the most established brands. It is important to reiterate that as of now, only well-established companies (with deep pockets) such as Nike, Coca-Cola or Gucci advertise in the metaverse. There wasn’t a case of a company that would rely solely on this marketing channel.

This is probably an indication that the metaverse for now will be an additional way of promoting a brand, not the only or main way of advertising it. You will still launch traditional campaigns, use display ads and track everything in a tracking software in the foreseeable future.

Metaverse platform operators still have to figure out how to weave ads into the experience without deterring users. Video games for example have another issue. Players usually expect ads from companies in realistic games like NBA series, where ads are actually part of the real experience that the game is trying to replicate. However, they may not respond well to seeing actual ads in games such as GTA online

Ads in the latter game have mostly been satirical and there are probably very few brands that would fit comfortably in this world. If game operators figure out how to put ads without hurting the story and the believability of the world they create, this would be a great opportunity for companies with a smaller budget.

Is advertising in the metaverse even fit for SME?

At this moment, being present in the VR space requires significant investments and an established brand. But remember, most probably we’re still in the infancy of the metaverse experience. The adoption of new technologies usually follows a sigmoid curve but the question is: at which point of the curve does the current state of metaverse fall into?

The current proposition from the likes of Meta is trying to recreate the very 2010s model of the Internet, with an overwhelming dominance of big corporations and algorithmic content. It is hard to say whether this model will win or a more decentralized one will based on user-generated content (UGC). 

Metaverses need to figure out how they see the role of SME in their advertising scheme. If they don’t do so, the virtual worlds will just become showrooms for safe brands.

What is the difference between AR and VR?

Many times, AR and VR devices are treated as the same thing and their names are used almost interchangeably. While that’s obviously not correct, the fact that many companies are trying to build devices capable of rendering both AR and VR worlds shows that they still are not sure what users actually want. So they play it safe and produce devices that can do AR and VR.

AR stands for augmented reality, and it offers a blend of virtual and real objects. AR devices enable their users to see the real world (through semi-transparent glass or digital passthrough) and digital objects that are put in this world. So, in the AR world, users can see for example, a virtual screen just hanging in front of them that can be operated with a virtual keyboard or remote. The best AR devices can anchor virtual objects in the scene, so when a user moves their head, the object stays in that place.

VR on the other hand renders a complete virtual world without any real-world elements in it. This way a user is transported into an alternative reality, not an enhanced (augmented) one.

The metaverse experience is associated with VR devices – but it doesn’t mean that there cannot be a metaverse using AR technology. The blend of real and virtual elements might help with the immersion and increase the usefulness of the experience.

So what are virtual worlds for anyway?

This is a good question that really doesn’t have a good answer at this point. Meta pushes its world as a place to work while metaverse-like games obviously emphasize the entertainment factor. 

It is hard for anyone that is not Mark Zuckerberg to imagine that they would have to put on a pair of expensive and uncomfortable VR glasses just to talk with silly avatars of their co-workers in an uninspiring virtual office. Meta’s approach is taken straight from what Thomas Edison said about finding 10,000 ways to fail building a lightbulb. The difference is that in the end, Edison found the correct way to build it.

Maybe the version that will become most popular will be the one that mixes an AR environment for additional information layers (news, messages, object recognition) with optional VR for entertainment.

Are metaverses about to take off or have they already peaked?

While many commenters take great satisfaction in declaring the death of VR, we wouldn’t cross them out yet. Sure, Meta’s working spaces look bland and like they were taken from a PS2 era. Plus, Microsoft’s recent layoffs affect mostly AR/VR departments.

But this is about to change. Apple will soon premiere its long-awaited pair of AR/VR glasses and when Apple does something, it is almost by definition popular. Apple devices (they plan to release a cheaper and a pro model) will be very expensive but should help to define how to interact with virtual spaces. 

Valve, the company behind the world’s most popular gaming distribution service and a manufacturer of many VR headsets, also plans to launch a new device that will most likely be capable of rendering VR scenes with graphic fidelity on par with current video games.

Advertising in metaverse: If and How

The answers to these questions aren’t here yet unfortunately. Brands are dabbling in VR, platform operators continue to invest billions and most of the world is watching with interest. There are already metaverse ad agencies present, waiting for customers but most advertisers will wait to see how things play out.

And this is what we would also recommend: be up-to-date with current developments and try to figure out which approach to VR space will be the most engaging for users, and therefore, profitable for advertisers. 

Apart from that, advertise like before and track everything with Voluum.

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