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Web3 is here and the metaverse has come along. It’s no secret that this ’embodied internet’ is increasingly becoming an important channel for businesses around the world, but most don’t yet know how to deal with it. While still in its infancy, the metaverse provides an opportunity for brands to redefine how they interact with consumers and ensure long-term success in the future. Brands cannot afford not to plan today for the experiences they will deliver in the metaverse for years to come.
In particular, advertising and marketing in the metaverse require a smart approach to ensure that ads are relevant, respectful, contextualized and reward-based. Brands are expected to provide real value and to embed themselves seamlessly into the context of the environment that surrounds them.
What we learned from Web1 and Web2
Web1 introduced the Internet to all of us. In the beginning, the Internet only allowed tools for publishing static information that users could easily read.
Web2 has added web pages 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 engagement allowed marketers to capitalize on consumer data. It spurred the creation of trackers like cookies and an entire marketplace built around handling consumer data.
With all this information and data consumers were sharing online, marketers began targeting ads based on behavior and audience characteristics. Rather than making digital brand experiences more relevant to consumers, audience targeting created an “eerie” factor.
After countless data breaches and scandals such as Cambridge Analytica, consumers are becoming increasingly aware that their personal information is no longer their property. International law and policy changes attempt to retroactively address Web2’s privacy pitfalls. However, overcoming consumer privacy issues as an afterthought has proved to be a major challenge.
With Web3 and in the metaverse, respect for consumer privacy is ingrained from the start. Users can still read and write content in the metaverse, but also have ownership and the ability to monetize their content and the virtual world they help create.
One for all and all for one
Most metaverses follow a model where there is no single owner. It is a Decentralized Autonomous Organization (DAO), meaning that all participants have an equal vote on who is allowed into that environment and universe.
By not having one leader in control, we can expect the collective group to set high standards for equality and data privacy. Essentially, the users create the DAO and look at the group as a whole rather than individuals.
Share success, reward loyalty
In the metaverse, success is shared and loyalty rewarded.
Content creators bring thousands of new visitors, interactions and subscribers to Web2 platform companies. To date, however, the companies have not shared that success at a pace equal to the value the creators have for the platforms. For example, it is estimated that only 0.2% of artists with music on Spotify generate more than $50,000 in royalty payments per year, while Spotify reported annual revenue of $10.9 billion 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 that help sign up new subscribers and generate ad revenue.
Brands like Adidas and Nike sell NFTs, but soon consumers who can’t afford expensive NFTs will want to be rewarded for their brand loyalty. For example, Adidas could create a series of NFTs specifically for consumers who post an Adidas poster on their virtual property, encourage 100 of their friends to watch an Adidas ad, or outfit their avatar in Adidas outfits on a regular basis. 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 among an audience with shared interests.
Brands also have an open line of communication with consumers in the metaverse, as all users have input on what their environment or experience looks like. Loyal adidas collectors can share their thoughts on which designers they would like the brand to partner with in the future, preferences for how they would like to celebrate a new shoe drop or show exactly which color palettes they would prefer for a new line.
The metaverse is believed 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.
As brands begin to experiment with ads in the metaverse, they need to make sure their strategies are specifically aligned with the virtual worlds and the gamification in much of the core.
In the metaverse, consumers carefully compose their virtual environments to immerse themselves in the experiences that interest them. It is imperative that the ads in these worlds be contextually relevant to environments like NikeLand or experiences like Rift Tour in Fortnite. Each metaverse has a different vibe, brands must shape their activations based on their contextual intelligence of the environment.
Consumers in the metaverse wear headsets, so commercials should be subtle rather than loud or brash. For example, the old-fashioned tactic of turning up the volume on a television commercial to ensure viewers hear your message would backfire in the metaverse, as you would essentially be screaming into the consumer’s headphones.
There’s a sense of playfulness in most of the metaverses, so light and humorous immersive brand activations like Louis the Game by Louis Vuitton have worked well.
Broadly targeted ads based on demographics or audience behaviors don’t work in the metaverse. The effectiveness of that strategy is already declining as Web2 marketers move to more privacy-safe contextual targeting.
Building a creative connection between a brand and its environment will be a critical cornerstone for successful metaverse advertising. Consumers have unprecedented control over what they see, create and use in the metaverse, so successful brands are starting to rethink the way they interact with consumers in contextually relevant ways.
Doug Stevenson is CEO and co-founder of Vibrant Media.
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This post What advertisers should focus on as they prepare for the metaverse
was original published at “https://venturebeat.com/2022/04/03/what-advertisers-need-to-focus-on-as-they-prepare-for-the-metaverse/”