The fundamentals of metaverse marketing

Whether you're selling loot or opening digital bars, users still expect authenticity from their virtual worlds.

Events in the metaverse work if there is a sense of authenticity and if they’re executed in a fantastical way, say experts; In true Nike and Gucci fashion, both brands dropped limited-edition goods.

This story was originally published in the 2022 Spring issue of strategy magazine. 

Spectacular virtual concerts. Digital collector items that sell for thousands of dollars more than their original value. Entire immersive worlds developed specifically for a brand. As the metaverse news cycle grows, and millions of dollars trade hands for real estate in virtual worlds, marketers are increasingly turning their focus to what looks like the next frontier in advertising. Here are three ways brands and organizations are showing up in the metaverse so far.

Limited-edition loot
Merch_GucciSome brands seeking an authentic entry into the metaverse have tapped their reputation in the physical world as status makers. One of the first to create direct-to-avatar (D2A) goods, luxury fashion brand Gucci broke into the metaverse in May 2021 with a limited-edition line of
branded items on video gaming platform, Roblox. The release included items that could be worn by players’ in-game avatars, sold for a limited amount of time.

Though the items originally sold for the equivalent of roughly US$6 in “Robux,” the game’s currency, resellers soon listed them in the game’s marketplace for much more than that – one sold days later for more than US$4,000 worth of the game’s currency, roughly US$1,000 more than its real-world counterpart.

Footwear brand Nike, meanwhile, acquired RTKFT – also a shoemaker, but one that exclusively makes digital footwear – in December of last year. And in February 2022, the brands announced the launch of a limited- edition non-fungible token (NFT) and physical shoe pairing with its special edition “Flying Formation” Air Max 1.RTKFT

In both Gucci and Nike’s cases, there was a clear and almost 1:1 correlation between the brand’s digital foray and their physical world marketing tactics.

“When Nike drops an NFT, it makes sense, because the way Nike engages its consumers is via a sense of exclusivity,” says Lewis Smithingham, director of creative solutions for Media.Monks. “When we talk about showing up in spaces, we need to talk about showing up in an authentic way – not like Steve Buscemi showing up with a skateboard over his shoulder. It needs to create value.”

Live events
For musicians such as Ariana Grande and Travis Scott, the metaverse provided a way to continue to connect with fans when pandemic restrictions made that difficult (and sometimes impossible).

In 2020, Scott was the focal point of Fortnite’s “Astronomical” event – essentially, an in-game re-imagination of a concert. That event, which drew more than 27 million unique participants, was one of the first that Alexander Rea, SVP and global director of creative and technology for Critical Mass, points to as a watershed moment for the future of the metaverse.

“It happened before the metaverse hype cycle began, and I had brands calling me asking me what they could do in Fortnite,” says Rea. The immersive concert experience established by the American rapper has since been repeated by other artists both within Fortnite and outside of it, with mixed results.

Pop superstar Ariana Grande’s own virtual concert drew an estimated $20 million payday for the artist. Meanwhile, Meta has struggled to attract eyeballs to events on its Horizon platform, which has featured musicians Young Thug, David Guetta, and The Chainsmokers.

There are two factors that underpin the success or failure of virtual events. The first is authenticity.

“There have been many virtual versions of analog events that were canceled because of the pandemic. Most of them were not that great,” says Rea. “The reality is that there was a rush to execute things. When you’re doing something in these virtual worlds, you have to create something that is genuine on that particular platform or it will rebel against you.”

Along with authenticity, execution is also important. Rather than recreate the concert experience, the Fortnite “Astronomical” concert invented an entirely new experience featuring stunning visuals and action-packed sequences, essentially transporting players inside a fully-immersive music video that didn’t follow real-world rules.

And that kind of fantastical experience is what most metaverse users are expecting.

“You don’t need gravity. You don’t need to have two arms and two legs,” says Rea. “Why run the risk of recreating something in the digital world?”

It’s a fair question – one which fashion brand Balenciaga may have the answer. To reveal its Fall 2021 collection, the brand created a metaverse game called Afterworld: The Age of Tomorrow. It essentially acted as a digital fashion show in which players walk around models sporting the brand’s new garb. The endeavour tied in with the launch of merchandise on Fortnite, emblazoned with the Balenciaga logo.

The trip to the metaverse generated a fair bit of noise for the brand – enough so that it committed to creating a metaverse business division. The fashion world also took notice, with a Decentraland fashion week taking place in the latter half of March 2022.

Total immersion
Some brands are using platforms such as Animal Crossing, Decentraland, Fortnite and Roblox to engage with users who are totally immersed for extended periods of time. Once again, the success or failure of these efforts comes down to whether or not the experience is authentic and ownable to the brand behind it – and also if it adds value for users who are native to the platform, says Cam Wykes, VP and head of content with Media.Monks.

Critical Mass EVP and ECD Steve Savic points to an unbranded experience by Reporters Without Borders from March 2020, called the Uncensored Library. The Library contained digital copies of banned reporting from countries including Mexico, Russia, Vietnam, Saudi Arabia and Egypt. By allowing users in those countries to access materials that would otherwise be banned, it subverts a concern some brands have over security in an unregulated space.

“This isn’t your traditional brand that is trying to sell a product – this stood for something much larger, and it uses the digital space in the most authentic way. It created an unfiltered environment where people have a voice,” Savic says.

“While a lot of brands are challenged by the lack of censorship [in the metaverse], Reporters Without Borders are using it to their massive advantage.”

Brand hubs like Miller’s “Meta Lite” offered value to gamers, who used it to interact with each other; Reporters Without Borders used the metaverse’s lack of regulations to its advantage.

Miller Lite’s “Meta Lite” bar in Decentraland is a favourite for Rea. When the beer brand was locked out of advertising during Super Bowl LVI, it built a bar in the virtual world specifically so that it could showcase the spot it would have run during the big game.

In doing so, Miller created its own moment – all while showing up in the metaverse in an authentic way and providing value to gamers who used the bar to lounge in and interact with each other, says Rea.

Immersion_Uncensored“Success” in the metaverse is a relative term. Primarily because there aren’t universally accepted metrics yet. Part of the issue is that efforts in the metaverse don’t clearly drive real-world conversions.

“There is no funnel, the metaverse right now is a bowl,” says Rea. “These experiences are effective at getting PR, but we don’t know if any of them are successful, because none of them tie into loyalty, rewards, CRM – any of the things we used to track.”

Still, although the technology remains nascent, Scott King, group strategy director at Critical Mass, says it is definitely emerging.

“The truth is, the metaverse is something that brands will have to consider and operate in, within the next few years,” says King. “The brands that are looking at it as a way for their customers to interact with each other, and as a way to deliver things in a better way than they currently do, are looking at it correctly.”