Meta Marketing Research #001: 14 key insight areas

Welcome to the Meta Marketing Research monthly newsletter. I'll be summarising and commenting on the latest relevant research papers from leading academic journals.

This Metaverse marketing research digest is based on a comprehensive piece released late last year:

Metaverse marketing: How the metaverse will shape the future of consumer research and practice

Below I offer research highlights and personal commentary.

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A burgeoning and mass-adopted Metaverse will transform all key marketing functions by enhancing existing and enabling new capabilities and possibilities.

Why it matters?

The potential of consumer interaction with brands within the Metaverse has generated significant debate. This research digest examines the marketing implications of the hypothetical widespread adoption of the Metaverse. It identifies new research directions and proposes a new framework offering valuable contributions to academia, practice, and policymakers.

1. Marketing theory: opportunities and challenges

The Metaverse is a novel platform that may be crucial for deciphering user behaviour and consumer culture with new metrics and degrees of intrusiveness. However, marketing in this space is highly experimental posing unique marketing challenges, including:

• technical?
• infrastructural (accessibility and affordability of hardware and software)
• socio-cultural?
• strategic?

Metaverse retailing is more experience-oriented than product-oriented.

Researchers propose three categories of virtual customers — virtualskeptics, evirtualists, and virtualcentrists based on their flow state and attitudes. An inclusive approach to crafting brand communication addressing each category will aid marketers in the Metaverse.

From a brand perspective, it is vital to understand how brand value, awareness, engagement, and strategy will evolve in the Metaverse.?

• Brand value in the Metaverse depends on factors, including the value the medium provides and the different offerings able to be presented.?
• The Metaverse also affects the nature of brand communications and brand personality.?
• Communication through avatars will enhance brand evaluation leading to positive actions. Avatars can be categorised as the modern, postmodern, and dialogical self, who can be salespersons of brands in the Metaverse.?
• The immersiveness of brand communication in the Metaverse, using virtual marketing tools, can help brands reach consumers in ways that were impossible before.?

Immersive netnography - an innovative research technique that can research phenomenological service experiences in the Metaverse.

1.1 Opportunities

• The Metaverse empowers brands to deliver offerings that are impossible in the real world. High immersion and interactivity allow brands to build robust and reliable buying patterns.
• Metaverse brand communities are another critical area. Metaverse tools help measure and check campaign performance and get insights for improvement.??
• The dominant user segments in the Metaverse are Generation Alpha, generation Z, and generation Y. They are tech-savvy and, due to their gaming enthusiasm, are the earliest metaverse adopters.?
• Interactive and immersive capabilities allow consumers to experience shopping as a grand hyper-personalised adventure in the comfort of their homes.?
• Improved accessibility and affordability will increase the adoption of the Metaverse. This, in turn, will transform consumer behaviour and experience at scale.?

1.2 Challenges

With abundant new opportunities for marketing in the Metaverse come various novel challenges.

Virtual Reality (VR) or Augmented Reality (AR) headsets are not as affordable and accessible as they should be. This applies to other accessories and may affect user participation and experience.

Socio-cultural issues due to uncertainty about consumer interactions and behaviour also matter.?

Marketers must engage users with various brand activities. For example, virtual events and competitions would be important engagement drivers.?

2. Use cases and customer insights

Enhanced tracking and monitoring will give firms:

• dense streams of customer data
• new user and object interaction metrics?

Accelerated concept testing - metaverse applications will be a quantum leap in product evolution and concept development due to more realistic product presentation and user trials.?

Market research - by emulating and enhancing physical and online market research techniques, the Metaverse will facilitate both qualitative and quantitative research.?

Ethics - pressure to address privacy and security concerns will be even higer compared with traditional online environments.?

3. Data, promotions, and user security implications

Like AI, the Metaverse presents a unique opportunity for data collection through its tool-driven architecture.

In the Metaverse, consumers can engage with many tools that can be co-created using real-time data.

Hence, as an engaging and immersive environment, the Metaverse allows marketers to increase consumer retention through consumer profiling.

Marketers can design unique promotions that augment their social media, bricks-and-mortar, and e-tail platforms.

Cybersecurity, quality control, and R&D, so that AI and AR designs do not compromise consumer safety and security, also matter.?

4. A sociological perspective

Scholars view the Metaverse as a new world of opportunities. It enables individuals to overcome the limitations of offline social activity and interactions.

It will provide individuals with a space to wear masks and diverge from societal expectations.?

The Metaverse will spur many identities and unregulated actions, creating new challenges for policymakers.

Ultimately, it will provide a space for individuals to express their dark sides without being sanctioned.

My comments: It is essential to understand whether it is better to market to the real human or the avatar's image.

5. Digital marketing strategy

Firms could use techniques like social network analysis (SNA), natural language programming (NLP), and deep learning to analyse qualitative data from metaverse platforms. With these, they can develop more relevant branding, customer, and stakeholder management strategies for digital targeting.

Data from the Metaverse can also generate customised digital advertisements. These can include banner ads, nonfungible tokens (NFTs), and 3D avatar-based marketing.

5.1 Challenges

Using the Metaverse for digital marketing would require new skills, attitudes, and considerations from marketers, including:

• Knowledge about hardware like AR, VR and 5G broadband networks
• Software and hardware skill set integration for optimal results?
• Privacy and credibility assurance
• Ground rules governing virtual money transactions
• Willingness to try new tools and techniques in a novel and uncertain environment
• Integration with traditional online and real-world marketing channels

5.2 Research agenda

• Development of new and accurate attribution models for consumer prospecting
• Real-time audit metrics development
• Balancing data-driven gamified experiences and users’ emotional wellbeing?

6. Consumer psychology and advertising

6.1 Advertising

Metaverse advertising is an emerging research area where some of the key topics include:

1. Identification of key psychological variables
2. Methodological advancements and psychometric tools development to facilitate experiments?
3. Structural changes to the marketing process within the Metaverse
4. Examination of why and when people use the Metaverse?
5. How being represented as an avatar affects consumer information processing and behaviour
6. Updating and refining KPIs for the Metaverse to ensure campaign effectiveness

6.2 Consumer interactions and ad engagement in the Metaverse

There is a tight connection between the physical and virtual, where it is more accurate to conceptualise them as a continuum rather than separate spaces. Marketing activities need to be integrated and could have parallel and even transcended effects.?

Despite metaverse platforms’ novelty, the underlying psychological factors that make advertising effective are likely to remain the same. Yet, a reasonable question is: When there is a substantial difference between the psychological profile of the user in real life and that of their virtual avatar - do you target the real human or their digital representation?

7. Flow states

The Metaverse can seamlessly blend our digital and physical lives into a single immersive experience. The features of this metaverse foster deep involvement, a.k.a flow.?

Academic research should focus on explaining how and why flow influences users’ perceptions and attitudes. The effects on social, purchasing and loyalty behaviours should also be explored. Moreover, research could explore flow consciousness’s role in purchasing behaviour or user emotions.

Finally, the Metaverse should be seen as a touchpoint in the context of the entire consumer journey. This would enable designing virtual worlds that optimise the consumer experience and conversion.

My comments: Flow states could be beneficial in driving a seamless consumer journey but should be balanced against the risk of developing addictions. Ethical design is a must.

8. Creating value and enhancing wellbeing

Researchers argue that the purpose of the Metaverse, as any other business or technology, should ultimately be to ensure greater human wellbeing. Or, in other words, to lead to better satisfaction with life.??

One way to achieve this is by using it to solve major societal and marketing challenges such as healthcare, sustainability, tourism, and mitigate the impact of hedonic consumption.?

Another benefit could be enhanced inclusivity. For example, people can get better access to specialised medical personnel remotely and possibly via holograms. The same principle applies to high-quality remote education.?

Moderate but enjoyable hedonic consumption in the form of metaverse concerts, sporting events, and sightseeing can also generate value. This would address inclusivity while also reducing the need to travel and consequently improving sustainability.?

My comments: It is paramount to develop with responsibility and wellbeing in mind BUT also communicate it clearly to the public to alleviate safety concerns and drive adoption.

9. Sensory acceptance and consumer’s consciousness

9.1 Consumer consciousness

Despite growing acceptance of virtual goods and experiences, from a psychological point of view, it is unclear how consumers comprehend the ecosystem on a conscious levels. Specifically, it is yet to be determined how to best capture and lead users’ attention in a digital environment with various competing stimuli.?

9.2 Sensory inputs, consciousness, experience, and consumer decision-making

Essentially, the metaverse environment adds a layer of consciousness on top of the human one. The avatar itself is yet another layer. So, marketers need to consider or penetrate at least three levels of consciousness to reach the decision-making apparatus of the user.?

In light of this challenge, future research should focus on:

1. How can marketers better optimise the sensory inputs of the Metaverse to capture consumer attention and awareness??
2. How can inconsistency of attention in the Metaverse impact the consumer buying journey in the Metaverse??
3. How can branding and advertising enhance sensory marketing efforts in the Metaverse??
4. Do sensory marketing strategies differ for the traditional, digital and Metaverse ecosystems??
5. Given the broad ecosystem, how can marketers integrate environmental, social and technology functions to build a targeted consumer journey?

10. An agenda for building capabilities in Hospitality

Virtual immersive Hospitality (e.g. events, meetings, conferences) is the second most popular experience in the Metaverse. Hospitality is also a socio-cultural practice reflecting the exchange of social values such as kinship, friendship, and hospitableness. Consequently, the Metaverse will most likely transform all 4Ps of hospitality marketing.

10.1 Product - beyond the human senses

Metaverse experiences generate social rather than only sensory immersion. For example, brands such as McDonald's envision spaces for meeting and hanging out, while The Wendyverse in Meta’s Horizon Worlds enables interactions transcending simply food tasting. Finally, Disney’s Star Wars: Galactic Starcruiser hotel blends narratives, story-telling, and role-play to offer a compelling and immersive experience.?

10.2 Price - beyond perishability

Perishability is a distinguishing feature of hospitality experiences and key to price setting. Since it is partially eliminated with the persistence of digital worlds and products, many questions arise:

• What factors determine pricing?
• How do metaverse users perceive value?
• What’s the role of metaverse hospitality providers in price setting?

10.3 Place - beyond location?

The Metaverse is not merely a sales/marketing channel for promotion but a place for building new experiences. So key considerations include:

• Creating a solid omnichannel strategy blurring physical and digital.
• Ensuring appropriate virtual-to-physical, physical-to-virtual, virtual-to-virtual business models that create value for providers and users.
• Considering the default transportation mode in the Metaverse when determining the best location when valuing an experience.

10.4 Promotion – beyond persuasion and memorability

The focus is to make the experience tangible pre-purchase and memorable post-purchase to incite the initial transaction and repeat purchase. Merging physical and digital campaigns could potentially accomplish this. Additionally, AI, digital twins, and deep fake technologies could enable virtual influencers to promote hospitality experiences and provide customer support.

11. Tourism marketing opportunities

A combination of virtual, augmented, and mixed reality revolutionises tourism experiences offering artificial and highly immersive experiences. These technologies, combined with gamification, provide unprecedented opportunities for creative marketing and promotion of various real-world locations. Ultimately, the seamless integration of physical and virtual in MR can amplify tourism experiences in the real world. For example, imagine the superimposition of flying cars while strolling London’s Oxford Street casually or seeing Rome in digital flames if you want to recreate the historical moment.

On the demand/buyer side, research should explore the value and importance of immersive experiences in the pre-purchase stage. Social contact and interactivity research could explore how users can seamlessly transform and teleport to and from physical and virtual worlds.

The supply/seller side should focus on AR and VR interactive technologies development alongside connectivity and interoperability improvements to deliver the ultimate user experience. Additionally, the Metaverse can augment, pun intended, the image of certain tourist destinations and form an integral part of the consumer journey.

12. AR & VR to Neuro-Enhanced reality (NeR) shaping the consumer journey

Neuro-Enhanced reality (NeR) uses neurostimulation to activate brain regions directly, thus bypassing the intermediate stages of sensory perceptions. For example, a computer-brain interface integrated into a VR headset can re-create the smell or taste of real bread by directly stimulating the correct brain areas. Potentially, such approaches can be very effective in driving consumer behaviour, but they also raise important ethical questions to be addressed in future research.

Such augmentation of virtual experiences to resemble real ones more closely is called falsity. It can nudge consumers along the journey by filling in missing information, such as the ocean aroma of a tropical holiday destination. Again, ethical questions arise. Consequently, the future research agenda could address the following:

• Using neuroscientific research methods to explain Metaverse buying behaviour.
• The role of AR, VR, and NeR on Metaverse buying behaviour.
• Using AR, VR, and NeR for the development of 5-senses Metaverse marketing.

13. Metaverse branding

The Metaverse offers unique opportunities for 3D and virtual marketing communication, which, however, may be more awareness- and education- rather than sales-focused. Fortunately, the specific 3D software components can enrich the interaction and the message quality, thus enhancing the communication value of marketing activities. ?

Most brands operate a purely physical or a physical-digital mix of offerings, with only a handful being purely digital. Consequently, they must weigh the benefits of Metaverse presence against the cost of hardware replacement and investment in developing virtual spaces and experiences. The relevance of the Metaverse for targeted audiences should also be considered. Moreover, even if novel and interesting for some, not everyone will be seeking Metaverse-based brand experiences. Therefore, the Metaverse should be seen just as an emerging context for branding and not hyped out of proportion. Finally, any research and insights emerging in such a rapidly evolving area should be seen as preliminary and temporary before being replaced by newer knowledge.

14. Services marketing and management advancements

The Metaverse is the latest chapter in the service revolution with the potential to transform the service sector, simultaneously elevating customer experience, service quality, and productivity.

Sectors such as healthcare and education didn’t see the productivity improvements characteristic of manufacturing thanks to technologies. However, the Metaverse can help them catch up for two main reasons:

• Scalability will lower costs and increase productivity
• New and enhanced services thanks to unique technical capabilities.

14.1 Intelligent automation and scalability of services in the Metaverse

The Metaverse will enable automation and AI-supported self-service. Additionally, once services are scalable, and most of the cost is development-related, incremental expenditure is small. As a result, service markets are likely to become less fragmented and more concentrated.

Even physical processes like hairdressing can be transformed – imagine a combination of MR and AI analysing your hair and designing an array of options for you to choose from before a hair-cutting robot executes your election.

14.2 The Metaverse offers exciting service innovation opportunities

Virtual experiences mirroring real-time live events could transform how we watch and participate in sporting events and concerts. Beyond entertainment, real-time virtual time travel can empower immersive educational experiences, such as a French language student visiting a virtual café in Paris to practice with native speakers.

Augmented reality AR can be used in many improved or entirely new services. For example, rather than using a two-dimensional Google Maps, a metaverse-powered app can superimpose where to walk in smart glasses. Healthcare professionals can be guided in their examinations. In B2B services, such as equipment repair, superimposed tags, explanations and analyses will allow for better, faster and cheaper repairs, and deskilling jobs. Even self-service will be increasingly possible for many repairs.

AR can also improve or deliver new services. Some examples are the superimposition of the correct route directions from Google Maps or AR-assisted physical examinations with the help of smart glasses. In B2B, the superimposition of relevant visual information can accelerate repairs and deskill jobs by enhancing them.

14.3 Metaverse’s potential downsides for service users

The concerns related to dehumanisation, social isolation, loss of autonomy and dignity, social engineering, and addiction should be addressed through a strong emphasis on digital corporate responsibility.

My comments: Consumers are becoming increasingly aware of and unhappy with excessive concentration. Some of the biggest Metaverse supporters come from the decentralised Web3 world. Therefore, the benefits of improved functionality must be balanced against the mentioned downsides and the risk of developing monopolies.

Marketing framework and value creation in the Metaverse

Jointly, the presented insights can be summarised into a Metaverse marketing framework (Fig. 1) based on a sociometric configuration depending on the alignment of the following:

• Responsible platform governance – security and privacy considerations, Electronic Data Interchange (EDI) standards, ethical design principles, and robust regulation and compliance standards.
• Hybrid stakeholder management – commercialisation and coordination within the ecosystem, human and avatar co-promotion, and robust community-building initiatives.
• Digital marketing strategy – virtual influencer branding, digital business model innovation, content management, re-invented KPIs. ?

Consequently, this alignment will bring value across five pillars:

1.????Economic – VC and private funding, more transactions, crypto adoption, monetisation of digital products

2.????Social – reduced loneliness and isolation, socially responsible campaigns, inclusivity, sustainability

3.????Epistemic – efficient knowledge dissemination, immersive and innovative content delivery

4.????Platform – improved consumer interaction, personalised customer support, digital product value co-creation

5.????Brand – increased equity, higher revenue potential, altered and/or expanded brand meaning?

My comments: Evidently, the goal or desired outcome of effective and responsible Metaverse Marketing is balanced value creation across the entire stakeholder network.

Future research

Each scientist who shared perspectives throughout the work presents vital questions and topics as we advance:

Marketing theory: opportunities and challenges

• ?Assess the potential of various Metaverses with their unique features and levels of immersion for brand ROI.
• Understand content consumption patterns and consumers’ preferences.

Use cases and customer insights

• Impact on the physical product lifecycle from virtual interaction within the Metaverse.
• Use the Metaverse to develop new quantitative and qualitative market research.
• Develop governance that would mitigate the potential threats to consumer privacy and personal data.

Data, promotions, and user security implications

• Apply a design thinking mentality that considers multi-dimensional consumer vulnerabilities.
• Implement value co-creation processes to manage and facilitate innovation throughout functional units.
• Broaden technology adoption models and theories to incorporate the benefits and the costs.
• Develop and validate new models of consumer learning within this new multifaceted exchange environment.
• Utilise consumer motivation models, such as self-determination theory, and test and expand these to understand how multiple generations interact.

A sociological perspective

• To what extent will consumer interactions remove the social norms that regulate our society?
• What are the complexities for governance and policymakers from the multitude of consumer identities and unregulated actions?
• Can the Metaverse lead to the breakdown of moral values and standards for individual users and consumers?
• How can academia balance critical observation and attentive analysis with the enthusiastic presentation of innovation?

Advertising and consumer psychology

• Measuring and ascertaining segmentation variables from customer behaviour with the greatest marketing impact.
• Use new attribution models based on Metaverse data for better targeting.
• Design gamification parameters in different sectors and measure their influence on product usage or consumption.
• Conceptualise essential psychological variables for studying marketing activities to add clarity and boundaries.
• Explore methodological advancements (e.g., explicit and implicit measures) and develop psychometric tools to facilitate experiments.
• Examine the structural changes to the marketing process by identifying and classifying brand message characteristics.
• Examine how virtual embodiment impacts information processing when exposed to marketing messages. Do you market to the person or the avatar?

Flow states

• Measure flow.
• Explore key design, technology and functionality features for generating flow.
• Explore the role of flow consciousness on purchasing behavior (such as impulse buying) or user emotions (enjoyment, regret).
• Combinations of touchpoints (including the Metaverse as a new touchpoint) best suited to generating flow states.

Creating value and enhancing wellbeing

• Direct Metaverse technology to serve humans better and possibly help resolve major societal and marketing challenges.
• Ensure marketers use data ethically for value creation and wellbeing.
• Ensure customer value from the Metaverse is inclusively delivered across demographics or populations.

Sensory acceptance and consumer consciousness

• Optimise sensory inputs to gain attention and consciousness among consumers.
• How can the inconsistency of attention affect the purchase journey?
• Improve sensory marketing efforts through branding and advertising.
• How do sensory marketing strategies differ for the traditional, digital, and Metaverse ecosystems?
• How can marketers integrate the environment, social, and technology functions to build an objective-based consumer journey?

An agenda for building capabilities in Hospitality

• Determine the pricing of metaverse hospitality products.
• Explore the value perceptions of hospitality experiences and what determines willingness to pay.
• Create effective omnichannel strategies for hospitality brands that blur virtual and physical.
• Build and evaluate virtual-to-physical, physical-to-virtual, and virtual-to-virtual business models.
• Determine the optimal location for real estate and hospitality operators to ‘build’ virtual experiences.
• Assess the impact of the Metaverse ‘platform’ and its technology on property value.

Tourism marketing opportunities

• Question the impact of immersion on the intention to purchase tourism products and services.
• Explore how Mixed Reality (MR) integrates VR and AR technologies to blend the physical and virtual worlds effectively.
• Explore how the Metaverse can support the competitiveness of tourism organisations in the ecosystem.

AR & VR to Neuro-Enhanced reality (NeR) shaping the consumer journey

• Explain consumer buying behaviour through neuroscientific research methods.
• Explore how AR, VR and NeR influence consumers’ buying behaviour.
• Explore the implications of AR, VR and NeR for the companies’ development of a 5-senses marketing plan.

Metaverse branding

• Identify significant brand development, management, experience and engagement aspects.
• How may it influence brand-related tactics?

Service marketing and management advancements

• Explore the implications of making many services scalable (end-to-end automated).
• Will it lead to further consolidation of service markets?
• How will mirror worlds, augmented reality, and entirely virtual worlds change service provision and consumption, enable scalability, and improve service quality?
• Explore the risks associated with more digital services (e.g. dehumanisation, isolation, loss of autonomy and dignity, social engineering, and addiction).

Conclusion

The potential marketing implications of widespread Metaverse adoption are profound. Specifically, there will be theoretical and practical advancements with sociological and digital marketing implications. Advertising and consumer psychology will also be transformed. In addition, there’s potential for generating flow states and creating value for all users by capturing and leading consumer consciousness through sensory stimuli. Sectors such as Hospitality and tourism will also be affected significantly. AR, VR, and NeR will also transform the consumer journey and branding. Finally, the Metaverse has strong potential to enhance or even enable new service marketing solutions.

Sources:

Y. K. Dwivedi et al., ‘Metaverse marketing: How the metaverse will shape the future of consumer research and practice’, Psychology and Marketing, p. mar.21767, Dec. 2022, doi: 10.1002/mar.21767.