Metaverse marketing – Part 1: A rollercoaster ride of interest and revival story

In the ever-evolving landscape of digital marketing, the metaverse emerged as a promising frontier, offering boundless possibilities for immersive and interactive brand experiences. However, not all journeys into this virtual realm have been smooth. Marketers, once enamored with the potential of the metaverse, found themselves grappling with uncertainties and challenges that led to a noticeable decline in interest. As the metaverse faced hurdles related to uncertain returns, limited user adoption, and technical complexities, marketers hesitated to fully embrace this transformative space.

But the story doesn’t end there. Recent developments hint at a rekindling of interest, painting a picture of renewed enthusiasm within the marketing community. Technological advancements, a burgeoning user base, and success stories of innovative campaigns are reshaping the narrative. It’s a tale of evolution, with the metaverse overcoming obstacles and repositioning itself as a dynamic and enticing arena for marketers seeking to push the boundaries of brand engagement. In this two-part series, Adgully delves into the peaks and valleys of metaverse marketing, where the ride is far from over, and the next chapter promises to be nothing short of exhilarating.

Metaverse technology caused a furore in 2022 and was one of the most hyped technologies last year. While this year has seen some shine taken off its glory, it is not the end, opines Lumos Labs Founder Kaavya Prasad.

According to her, there were several reasons behind the decline in metaverse with the tech sector; yet this was expected as has been the case of several advanced tech industries. As the hype and the buzz dies down, she adds, the users who are in it for the superficial elements stop being highly active in the space.

For the metaverse sector, she says, numerous factors contributed to the decreased global attention:

Cost of the metaverse

Most of the metaverse platforms running today are free, with certain paid elements available within their infrastructure, but maintenance of sophisticated codes, graphics, and smooth UI, using high levels of computational power, requires capital and steady flow of income. Given the recent downtrends in investments, global economy, and financial markets, keeping a small business based on advanced technology is not an easy feat.

Nascent stage of technology

The metaverse is not fully developed yet and is going through various stages of better graphics, smooth user experience, easy onboarding, and reduced energy usage. Currently, a majority of the platforms run on either PCs or laptops, which are not available everywhere and the level of ubiquity that Web2 has achieved with smartphones is yet to be seen in Web3 sectors, including metaverse.

Monopoly of the market

With the entry of tech giants such as Meta, Microsoft, Apple, etc., a high number of developers, builders, designers, and more were onboarded to help these firms perform research and create their products. This has led to a monopoly of talent, user interest, and investments in favour of these big firms. In turn, there is less availability of resources for the small start-ups, which could also be one of the primary reasons for the metaverse sector’s inhibited growth.

While these reasons have affected the industry, there is still a lot of buzz within the tech folks, who see a potential future in the Metaverse as other emerging technologies like Web3, artificial intelligence, and especially, AR/VR, expand to give way to more innovative solutions using their capabilities along with the potential of the metaverse sector. Despite reporting a loss of $13 billion, Meta CEO Mark Zuckerberg is still optimistic about this virtual world and has now directed its focus to a phygital world, where the elements of the virtual and real world complement each other to create a futuristic experience.

The tech sector is highly bullish towards this new era of technology advancement and almost all tech giants have made multi-billion dollar investments in these nascent tech offerings.

“Well, metaverse is still in its nascent stage and hence, it is ever evolving,” says Samir Asher, Co-Founder and COO, Tonic Worldwide. But, he adds, we are seeing it evolving rapidly and new technologies are at play.

“Hence, today hardware like VR headsets, haptic gloves and a combination of Mixed media and Extended Reality (XR), users have new interactive experiences that were otherwise not possible. Metaverse as a term is too overwhelming for marketers and consumers; it’s nothing but immersive life-like experiences created virtually,” he adds.

While metaverse came with a lot of promise, the adoption didn’t quite take off, observes Barin Mukherjee Co-Founder and CEO, Digital Refresh Networks. “Some brands did try engaging with it, but I would believe the adoption was low due to very low penetration of devices aiding the immersive experience promised. Again, the interpretation of what’s possible was fragmented and therefore didn’t really reach out to a substantial audience to make it enticing for brands to engage on,” he adds.

Shaping the future

How has the perception of the metaverse evolved in recent times, and what does this mean for its role in the future of human interaction and digital marketing strategies?

In the not-so-distant past, the metaverse was a tantalising concept – a digital frontier promising a new era of interconnected experiences. Initially met with excitement and curiosity, its perception among the public and industry players underwent a metamorphosis, navigating through skepticism and tempered expectations. However, recent times have witnessed a profound evolution in the perception of the metaverse, setting the stage for its pivotal role in the future of human interaction and digital marketing.

Once dismissed by some as a futuristic fantasy, the metaverse has now become a tangible reality, thanks to rapid advancements in virtual and augmented reality technologies. This newfound tangibility has led to a shift in public perception, with more individuals recognising the metaverse as a viable space for socialisation, work, and recreation. As the metaverse transcends its earlier mystique, it is poised to redefine the very fabric of how humans engage with one another.

Crucially, this evolution has significant implications for digital marketing strategies. Marketers, once cautious in navigating the uncertainties of this uncharted territory, are now re-evaluating their approach. The metaverse, with its growing user base and proven success stories, emerges as a promising avenue for innovative marketing campaigns. Brands are beginning to view it not merely as a buzzword, but as a dynamic platform to captivate audiences in entirely novel ways.

The future of human interaction, it seems, is intricately woven with the metaverse. Virtual gatherings, collaborative workspaces, and shared experiences are becoming commonplace, blurring the lines between the physical and digital realms. As this integration deepens, marketers are presented with unprecedented opportunities to connect with consumers in immersive and authentic ways.

In essence, the metaverse is shedding its enigmatic aura to emerge as a transformative force. Its evolving perception signals a paradigm shift, underscoring the potential it holds for reshaping not only how we interact with technology, but also how brands engage with their audiences. As the metaverse unfolds its multifaceted dimensions, one thing becomes clear: its role in the future is not just speculative, but destined to be central in the realms of human connection and digital marketing strategies. The journey has just begun, and the metaverse stands ready to redefine our digital landscape.

From just a gaming tool, notes Kaavya Prasad, metaverse has significantly expanded its utility across sectors. Metaverse retail outlets, virtual products, virtual art galleries, exhibitions, virtual real estate, virtual concerts, we have heard and have seen of these developments in the last year itself, she adds.

“We have already made considerable progress in terms of human interactions within the virtual world and have seen solutions that revolutionise the way users shop, learn, interact, play games, work, and more. The future for this area of virtual interaction now holds more advanced tech, more life-like user experience through the amalgamation of AR/VR, smarter and efficient interactions through AI, and a high level of user adoption. At Lumos Labs as well, we are planning to launch a metaverse universe soon which will contain all our offerings and allow for authentic human exchanges, skill building, learning, networking, and hiring. Therefore, the future is innovative and personalised,” she adds.

With digital marketing strategies, she says, the metaverse is definitely a new unexploited sector that will allow for fresh marketing campaigns focused on building a personalised bond between businesses and consumers. According to her, many large corporations have already penetrated this sector to create their own virtual stores, tokenised products, virtual showcases, where any user from any corner of the world can walk through their store as well as try on features where users can see what it would look like on them. Going forward, she adds, we can expect a lot more happening within this virtual world as we bring AI and AR/VR to the mix, which will make the consumer experience more personal and targeted.

The biggest strength that metaverse offers is the seamless blend of the virtual and physical world, observes Samir Asher. This should be leveraged by marketers to build immersive experiences.

“The opportunity to develop highly engaged communities with their consumers using metaverse should surely be explored with each brand. Brands should also focus on developing virtual events and storefronts that offer consumers an enhanced experience while interacting with the brand,” observes Asher.

This is yet to be deciphered, says Barin Mukherjee. “Since metaverse has been the peg for large corporations like meta, I am sure they would back it for its evolution. However, a strong definition of “what to expect” needs to be articulated for consumers and the devices for immersive experiences need to be made available easily for adoption at scale to happen. Till then, it will be limited to its exposure into certain categories like gaming among others,” he adds.

(Part 2 of this report will explore the trends and strategies, how brands can leverage the resurgence of the metaverse, and the potential of AI to engage audiences in innovative and meaningful ways.)