The Evolution of Metaverse and What It Means to Advertising
The metaverse - a digital space where people congregate to play, socialize, create, study, spend, consume media, and connect with brands – is fast approaching. At its heart are networked experiences that are linked together via one massive virtual world, creating a new and fascinating playground for advertisers.
Despite the fact that the term has just become popular, the concept of the metaverse is not new and has been depicted in books and films such as Snow Crash and Ready Player One for decades. However, we are seeing the first signs of it in today's most popular gaming platforms, such as Fortnite and Roblox, which are organizing virtual concerts, film screenings, and even memorials.
On the other hand, the metaverse is starting to emerge in the visions of some of the world's largest computer companies, like as Microsoft and Meta, who view it as a way for people to interact and collaborate. Advertisers will need to understand where they fit in and how to navigate these immersive and digitally connected spaces as the metaverse approaches.
Why now?
For a long time, people have recognized the need for the benefits of a virtual world. Second Life, an online multimedia platform that allowed individuals to create avatars of themselves and live a second life in an online virtual world, exploded in popularity in 2003, despite the fact that the craze faded quickly due to a lack of technology at the time. Many IT companies, including Microsoft and Google, have attempted to develop hardware and software to assist in the shift to a more virtual world. Even still, there were insufficient reasons for us to exist in it, and it was not easily available to the common consumer. However, that was changed by Covid-19.
Meeting someone digitally rather than seeing them in person was pointless before the pandemic if they lived nearby. These views shifted as a result of extended lockdowns and travel restrictions, and virtual meetings became frequent. Sports games, festivals, live performances, and trips to the theater and the movies were all prohibited. People began to flock in their millions to virtual worlds via their mobile phones, PCs, and consoles as live entertainment vanished.
As a result, companies that were enthusiastic about contributing to the metaverse's development and growth were given more resources to do so. Roblox, one of these companies, stated in November 2021 that its daily active users had reached 49.4 million, up 35% from the previous year, following significant growth and multiple acquisitions. The number of hours worked was 3.6 billion, up 32% from the previous year. Revenue was expected to range between $184 and $187 million, between 84 and 87% year-on-year. It now has greater resources to realize its vision, including more funds to invest in technology and acquire companies to assist it in achieving its goals, as well as making it easier to persuade people to stay.
The new attention economy
The attention economy began with Google and Facebook creating ecosystems of services centered on analyzing human behavior in order to provide value to advertisers. Previously, delivering value to advertisers was considered a waste of users' most important resource: their time. Advertisers, on the other hand, have realized that their interventions must be timely, relevant, and contextualized in order to give value to all parties involved. This is especially true in gaming, where players are frequently fully immersed in the experience, requiring brands to become a part of the scene and experience rather than disrupting it with an interstitial ad.
In the metaverse, ad experiences will have to be more immersive, interactive, and user-defined. Ads must feel natural and blend in with the consumer's experience, rather than disrupting it. The earliest incarnation of this may be seen in in-game advertising, where commercials are strategically placed within the gaming environment to complement the gameplay.
People will seek out various experiences in the metaverse for various reasons. For example, if they want to catch up with friends, they can go to a virtual cafe or space to catch up and chat, or if they want to get away and have an adventure, they can go to an action experience. The ads that are displayed in these areas must fit not only the environment, but also the mood and reasons why people are there. This will elevate contextual advertising to greater levels.
It is hard to imagine a single centralized platform emerging as the winner, where users can choose which experience they wish to access. Instead, think of a web browser as an easy method to visualize it. Just as you use Chrome or Safari to browse websites, something similar will inevitably emerge to enable people connect and access these potentially interconnected immersive worlds.
The evolution of in-game currency
Purchases and their payment will be another significant part of the metaverse. People will invest not only time, but also money in their avatar's appearance and virtual space to show off their ranking and status in the metaverse. Many people believe the metaverse will be built on blockchain technology, with its own coin that will allow individuals from all over the world to transact effortlessly through a virtual marketplace. Previously, you would spend money on additional material within a game and then go to a website to purchase apparel. Because you'll be able to earn money and conduct most transactions in the metaverse in the future, it makes sense for firms to promote, establish a community, and sell their items there.
We are already seeing this in games like Fortnite and Roblox, where millions of dollars are spent on clothes and in-game accessories to make characters stand out among their friends and other players. The NFT craze also represents a shift in people's perceptions about the value of owning and exchanging virtual goods. Once this is implemented in the metaverse, spending $50 on a pair of virtual trainers will be as common as buying a real pair. Sandbox and Axie Infinity, for example, have already begun experimenting with integrating the NFT marketplace and games.
Blurring the distinctions between online and offline
As the metaverse expands into the actual world, terminology like on- and offline will become obsolete, as everything will be connected. AR and VR, accompanied by new devices such as virtual headsets and VR glasses that better connect us, will allow for exciting experiences that mix the virtual and real worlds, opening up new and endless possibilities for advertisers who will no longer be constrained by the barriers that exist in many of today's marketing channels.
Early evidence of this may be found in Niantic's Pokémon GO and Pikmin Bloom games, as well as Nintendo's new theme park, which combines rides and attractions with virtual experiences that you access while navigating the park via your mobile device. Last year's Electric Daisy Carnival (EDC) took place both in real life and on Roblox, with users traversing a virtual version of the event and experiencing live performers alongside those who were there in person.
Where do we go from here?
Next-level contextual advertising, mixed reality, seamless transactions, and in-game NFTs are just a few of the areas where the metaverse will have a huge impact. Advertisers who want to stay relevant in this new world will need to keep their ears to the ground, hire the right people, and understand where and how they fit into this channel as a firm.
Looking into the platforms that are championing this kind of connectivity and learning how to reach their users would be a fantastic place to start, since these platforms are essentially the beginning of something that will swiftly expand into a place where the majority of us will spend our time.