The sails are up, and the boat is ready to set off on the new Metaverse adventure which will potentially revolutionize how we live, relax, work, and… advertise.
But the boarding still has not finished, and it’s up to you as an advertiser whether you want to check in early to the best-placed cabins with the coziest bunks.
Just turn your abstract thinking on, and see how performance marketing enters the mysterious waters of Metaverse.
What exactly is the Metaverse?
We’re aware of the fact that most people can’t really, just yet, wrap their heads around the concept of Metaverse. And it’s completely fine, as to be honest, the idea is not yet fully crystallized, and even the current vocabulary can not keep up. In Zeropark, we’re still far from giving judgments on the matter, but keeping track of what is going on is highly recommended for all affiliates, as usual.
What we’re dealing with is the nascent market and a highly-possible generational change that will redefine media and possibly life, too. Sounds scary, right?
Think of the Metaverse more as another step in the technological junction of virtual worlds and real life. It’s still being shaped, with both the concept and technical possibilities still heading toward the optimal point, where we would be able to (virtually) materialize THE Metaverse.
The history of the ‘new media’ and the Internet could be intuitively divided into different generations:
- Internet 1.0 – the first user-facing phase of the Internet, where the information became connected and highly available for all.
- Internet 2.0 – the social-media-oriented era that we’ve been witnessing in the past years. Here people became connected and inseparable from their mobile devices. The full potential of online advertising was discovered, and the directions for ad tech to boast in were set.
- Internet 3.0 – This is where the convergence happens, and real life becomes welded with virtual reality. Blockchain, VR, AR, 5G, and other pieces of revolutionary tech all come together to create a new, coded environment, where humans are able to function. And this is, conceptually, the real Metaverse – the duplication and extension of one’s life in indefinite surroundings. But it’s a construct, and it is still to be seen whether it will be realized or not. Advertising here is more immersive, and new technology becomes the key to even more precise targeting and intent-catching of audiences.
Tech advancements allowing Metaverse introduction
As of today, the available solutions are not fully offering the complete realization of the Metaverse ideas, only something that we would call ‘metaversesque experiences’. This is, nevertheless, a great showcase of what could be. And, what is even more important for advertisers and brands, is that it’s a foundation for new audiences and space to create sustainable advertising solutions for them. We’re sure that the ad tech niche will have hands full of work and heads full of ideas in that matter.
The perfect Metaverse could only be achieved by merging the functionalities of different technological advancements such as:
- 5G
- Blockchain and cryptocurrencies
- Virtual Reality, Augmented Reality, Mixed Reality
- 3D scanning and model creation
- and more.
Target audience for Metaverse marketing
Of course, as future Metaverse advertisers, you wish to discover what kind of audiences you can access with this traffic. The concept is that Metaverse advertising will be able to reach everybody, but for now, it’s still a concept only.
The high prices of devices and the general consumerist character of the Metaverse mean that audiences come from highly technologically advanced and economically developed GEOs. That is why the three countries that lead the world to strive towards Metaverse are the US, China, and Korea, all registering multiple Metaverse companies on their stock exchanges.
A lot of explaining will need to be done for the world to understand the newest solutions. For now, the studies suggest that even as much as 96% of U.S. citizens are not familiar with the basics of blockchain, NFT, and cryptocurrencies. This means they do not have an understanding of the building blocks that are fundamentals of the Metaverse, but it does not mean that the market is dry of targets.
Gaming audiences in the Metaverse
The 2021 Fortune Business Insights research presented the market segmentation of the Metaverse. It is not surprising that almost 50% of it is being taken by gaming platforms such as Fortnite and Roblox, as the latter has more than 42 million users every day.
Gaming and live-streaming communities are highly competent with technology, and the global gaming market is expected to generate $200 billion by 2024. This is the market segment where most VR and AR solutions are being adopted, and where the physical and digital worlds converge most seamlessly.
In-game advertising and shopping are some of the most impressively developed sectors that bring a lot of hope to Metaverse enthusiasts. The forecasts claim that the Compound Annual Growth Rate of in-game advertising will almost double and increase by $3.54 billion in the 2020-2025 period. What is most important, is that most of the growth (over a third of it) will originate in the APAC (Asia Pacific) region.
Cryptocurrencies in affiliate campaigns
Crypto is one of the most interesting Metaverse-related verticals for affiliates as decentralized financial solutions have attracted major interest in the past years. It also happens that cryptocurrencies and blockchain technology are a major part of a decentralized Metaverse environment, with a prospect of the virtual world operating without central banks.
The crypto market is fluctuating, but just like Non-Fungible Tokens (NFTs), it does not become less popular. Virtual ownership principles present in these niches will be transferred to how we define virtual spaces and property, and it’s easily observable how the biggest Metaverse players seek to embrace cryptocurrency chances, too.
Accessing Metaverse audiences
Advertising in the metaverse remains something to be shaped, but even today we can determine what will be most important for advertisers. Whether it’s new consumer behaviors or new doors that technology opens, it’s a must for you to embrace those soon enough to make the campaigns as effective as possible.
A completely new sales funnel
New formats mean that advertisers will need to come up with new ways to guide users through the conversion funnel. Considering that the Metaverse experiences might resemble real-life shopping, advertisers may launch interactive and programmatic versions of Out Of Home advertising.
For marketers who want to capitalize on the Metaverse and NFT trends, it might be a good trail to follow. Finding out the latest UX trends, as well as understanding the new mechanisms, could help you understand which offers should you follow in your campaigns. Especially if the target audience will keep on growing at the same pace.
VR, AR, MR
Researchers claim that by 2024, global spending on AR and VR technology will rise from $12 billion (in 2020) to even $72.8 billion. As Virtual Reality and Augmented Reality are the founding blocks of the metaverse and a key to providing interactive and immersive 3D environments, there will most certainly be an increased demand for them. Especially with major companies intensifying their VR headsets investments – Zuckerberg’s Meta has only recently announced the first success of Project Cambria, the headset designed especially for their business-environment metaverse project.
Affiliates can try to jump on the bandwagon also with e-commerce offers focusing on VR gear. It’s, once again, up to one’s creativity and advertising intuition to utilize trends to boost the campaign’s ROI.
See our Trends for programmatic advertising in 2022 article to see, what are the hottest topics in the affiliate world this year.
NFT and crypto offers
Cryptocurrencies and NFTs have most certainly become the most widely known parts of the Metaverse, as the users fully embraced blockchain solutions. Drops and rises happen, but this does not change the fact that the audience is still interested in Non-Fungible Tokens and Cryptocurrencies.
Blockchain defines how Metaverse approaches ownership of virtual assets inside the Internet 3.0. For now, NFTs are most often just files, but soon they might become wearables, properties, and gadgets that the avatars can use.
Only in 2021, NFT’s overall trading spiked 21,000%, reached $17.6 billion, and reportedly sellers made a combined $5.4 billion profit on it. Cryptocurrencies aren’t growing at such an impressive pace, but the CAGR of the segment (Compound Annual Growth Rate) is expected to be a steady 7.1% until 2026.
Crypto offers and NFT are not the easiest to run for advertisers, so, therefore, we advise you to stay extremely alert and not to burn your budgets on ill-considered campaigns. Optimization could become highly demanding, so make sure you stay data-driven and patient when figuring out your best-converting targets.
Play to Earn games
As the gaming community is probably one of the most open to Metaverse solutions, we did not have to wait long for blockchain technology to enter the area. That is where the emerging P2E (Play to Earn) industry came in and offered users a chance to earn cryptocurrencies and NFTs by playing mobile and desktop games. Gamification made Metaverse business operations fun for the users and has provided good learning platforms for everybody who wants to understand the concept in practice.
Virtually enhanced real-world advertising
AR and VR technology have not only allowed us to create completely new virtual worlds from scratch but also enhanced what we see around us. Augmented Reality features have become a hot topic with live camera filters and the booming success of Pokémon GO ($1.21 billion of revenue in 2021 only) as examples.
These solutions are steadily implemented by major apparel and furniture brands, as they allow a convenient try-on feature. For instance, the IKEA Place app uses AR so that every user can place a 3D model of a furniture piece directly in their room to see how it fits.
Stores are already offering QR codes with information about their offers, and some food producers add small QR codes so that customers can access recipes. It’s only one of the ways that online content can enrich physical shopping, and there surely will be a way for further development.
New forms of content
It is beyond physical possibilities to throw an event where an artist is able to perform live before 12.3 million people. But Epic Games managed to do just that with the 2020 Travis Scott concert in Fortnite—showcasing how Metaverse can push physical boundaries.
Bypassing real-world limitations is one of the most appealing aspects of the Metaverse-embodied internet. Virtual billboards could bring new quality to traditional advertising, and so will the VR-enhanced user-generated content.
Make sure that as an advertiser you stay alert, and follow the latest trends and innovations to utilize them in your campaigns. Although you do not need to get directly involved with Metaverse, you can always include the trends in your Internet 2.0 affiliate offers.
Advertising in social spaces
As for now, the Metaverse is a highly social space, where communities can share thoughts and spend time together, as well as do business. That is one of the reasons why more and more people seek opportunities to enter virtual reality, and brands want to capitalize on it by sponsoring these environments.
Virtual malls where friends can ‘go’ shopping, thematic spaces and parties, concerts, conferences, and fashion shows. These are only some of the places for users to integrate – all under a brand’s logo.
Highly purchase-oriented audiences
Based on what we are observing currently in the available Metaverse environments, the audiences are immensely motivated to spend money. Research shows that 75% of Gen Z shoppers have at least once in their lifetime completed in-game purchases.
This is highly promising for the brands and advertisers, as it appears that not only the serious Metaverse idea enthusiasts are there to complete the purchases. This drive for shopping across the spectrum of audiences is something that advertisers should more than appreciate.
This also means that the Metaverse market can become broad, and not only luxurious. Common items and smaller-value purchases should provide a voluminous audience for campaigns of different types, too.
Virtual world advertising challenges
There should be no doubt that Metaverse is a trend. And definitely, it’s a rising force in marketing, technology, e-commerce, and other fields that are affected by media and online presence. But as there are a lot of hopes regarding this topic, there are some justified worries, too.
Ethical doubts and privacy in Metaverse Advertising
Metaverse promises major opportunities for advertising in virtual environments—yes, it’s true. But online privacy has been a widely stressed topic within the ad tech community, and it has not yet been determined how privacy will work when people have the ability to fully submerge into the Metaverse.
In the Internet 2.0 era, users have expressed privacy concerns that have scaled up and eventually resulted in a major shift within the advertising industry. Although third-party data processing and cookies are still a possible solution, it has become a good practice to sail away from them. Especially since modern advertising allows more precise targeting based on the user’s intent.
The privacy guidelines have not yet been ironed out, as well as the range of possibilities for Metaverse marketing endeavors. One thing is for sure – data privacy needs to be the priority for all advertisers and Metaverse service providers, as the virtual space needs to be safe to attract more interest.
Unsure branding boundaries
Bear in mind that the fundamental principle of the Metaverse is market decentralization. This means that by no means will there be a universal governing body. Since the guidelines may be patchy, this may affect how the ads are being delivered to the audience, and what kinds of users see the ads.
However, the current NFT and metaverse digital advertising outlook looks promising, as many major brands have already decided to enter the area and seem to be benefiting from that. There are some worthwhile examples of Coca-Cola, Gucci, and Nike, which all approached Metaverse branding from different angles. The soda company launched its NFT with some interesting collectibles. Gucci incorporated AR to allow its users to try on their premium apparel and issued their first non-physical model of shoes.
Nike went a step further and in 2021, the company acquired RTFKT, the cutting-edge sneaker company, and has already issued CryptoKicks – a Metaverse version of Nike Dunks – that could be worn by avatars in virtual realities.
Affiliate advertisers should really take this approach into deep consideration. Engaging with world-renowned brands’ offers could be a safe and highly rewarding choice. Users are following the biggest brands’ moves with great curiosity and will be more likely to trust them.
Digital marketing targeting strategies in Metaverse
The current tide of Metaverse social experiences suggests that a virtual alter ego (an avatar) could be heavily disconnected from the actual user, so their behaviors will also change. This could potentially complicate targeting that advertisers know so well from Internet 2.0 opportunities.
This is still to be discovered, but advertisers need to make sure they can transfer their audiences from real-life online campaigns to the virtual environment. On the other hand, for some, Metaverse may bring much broader and purchase-driven audiences. The key will be researching user behaviors and understanding new customer experiences in the fully digital world.
Content overload
It has already been said that Metaverse advertising will enter social spaces with the possibility of becoming available everywhere. Since there are no physical limitations, there are countless advertising options. The decentralization also means more freedom, so the user may be served ads non-stop, which could lead to content overwhelming.
Sponsored spaces, pop-ups, repetitiveness, or even some human-like AI following the user could potentially take it a step too far. A simple, yet effective way to avoid that would be to transfer healthy advertising practices to the Metaverse, too. No campaign will convert in the 2020s if it’s not user-preference-oriented.
Conclusions
Metaverse advertising opportunities are right there behind the corner, and it would be a potentially big waste to miss out on the early stages of popularity and rise in the segment. Perfectly virtual worlds are not here yet, but the tempo of development suggests that the market could develop in that direction soon.
Łukasz Pośpiech
