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Web3 is here and the metaverse has arrived with it. It’s no secret that this “built-in internet” is becoming an increasingly important channel for businesses around the world, but most still don’t know how to interact with it. Although still in early development, the metaverse offers the opportunity for brands to redefine how they interact with consumers and ensure long-term success well into the future. Brands cannot afford not to plan today for the experiences they will deliver in the metaverse for years to come.
Advertising and marketing in the metaverse particularly requires a smart approach to ensure ads are relevant, respectful, contextual and reward-based. Brands are expected to deliver real value and blend seamlessly into the context of their surrounding environment.
What we have learned from Web1 and Web2
Web1 introduced the Internet to all of us. At first, the Internet only allowed tools to publish static information that users could simply read.
In Web2, web pages were added where users can upload content, add comments, create profiles, and much more. Internet users actively participated in shaping the Internet we know today.
Unfortunately, this active participation allowed marketers to take advantage of consumer data. It spurred the creation of cookie-like trackers and an entire marketplace built around consumer transaction data.
Taking all this information and data that consumers were sharing online, marketers began to target advertising based on audience behavior and attributes. Instead of making digital brand experiences more relevant to consumers, audience targeting created a “creepiness” factor.
After countless data breaches and scandals like Cambridge Analytica, consumers are increasingly aware of the fact that their personal data is no longer their property. Changes in international law and policy are attempting to retroactively address Web2’s privacy pitfalls. However, rectifying problems with consumer privacy as an afterthought has proven to be quite a challenge.
With Web3 and into the metaverse, respect for consumer privacy is ingrained from the very beginning. Users can still read and write content in the metaverse, but they also have ownership and the ability to monetize their content and the virtual world they are helping to create.
All for one and one for all
Most metaverses follow a model where there is no single owner. It is a decentralized autonomous organization (DAO), which means that all participants have an equal vote of who will be allowed in that environment and universe.
With no leader at the helm, we can expect the collective group to demand high standards around fairness and data privacy. In essence, users are creating the DAO and looking for the group as a whole rather than individuals.
Share the success, reward loyalty
In the metaverse, success is shared and loyalty is rewarded.
Content creators bring thousands of new visitors, interactions, and subscribers to Web2 platform businesses. To date, however, companies have not shared in that success at a rate equal to the value creators generate for the platforms. For example, just 0.2% of artists with music on Spotify generate more than $50,000 in royalty payments per year, while Spotify reported $10.9 billion in annual revenue in 2021.
However, in the metaverse, it is easier to reward users and content creators with non-fungible tokens (NFTs) or other cryptocurrencies. For example, Spotify could reward microshares of the company as crypto to artists who help sign up new subscribers and generate ad revenue.
Brands like Adidas and Nike are selling 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 display an Adidas poster on their virtual property, encourage 100 of their friends to watch an Adidas ad, or regularly dress their avatar in Adidas clothing. Adidas. This creates an opportunity to reward loyal customers who are willing to act as brand ambassadors while raising 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 information about what their environment or experience looks like. Loyal Adidas collectors could weigh in on designers they want the brand to collaborate with in the future, preferences for how they want to celebrate a new shoe drop, or show off exactly what color palettes they’d prefer for a new line.
The metaverse is supposed to help rebalance the inequities and discrepancies in our current system. Create an easier path for platforms and brands to share success with their content creators and users.
As brands begin to experiment with advertising in the metaverse, they need to ensure their strategies are specifically mapped to virtual worlds and gamification at much of their core.
In the metaverse, consumers carefully select their virtual environments to immerse themselves in experiences that matter to them. It’s imperative that advertising on these worlds is contextually relevant to environments like NikeLand or experiences like the Rift Tour in Fortnite. Each metaverse has a different environment, brands need to shape their activations based on their contextual intelligence of the environment.
Consumers in the metaverse wear headphones, so advertising messages need to be subtle rather than loud or blatant. For example, the old-fashioned tactic of turning up the volume of a TV ad to ensure viewers hear its message would backfire in the metaverse, as it would essentially be yelling into consumers’ headphones.
There’s a sense of playfulness to most metaverses, so light and humorous immersive brand activations like Louis Vuitton’s Louis the Game have worked well.
Broadly targeted advertising based on audience demographics or behavior will not work in the metaverse. The effectiveness of that strategy is already diminishing now that Web2’s marketers are switching to a more privacy-safe contextual targeting.
Building a creative connection between a brand and the environment that surrounds it will be a fundamental pillar for successful advertising in the metaverse. Consumers have unprecedented control over what they see, create and interact with in the metaverse, so successful brands are starting to reinvent the ways they interact with consumers in a contextually relevant way.
Doug Stevenson is CEO and co-founder of Vibrant Media.
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