One common misunderstanding of the metaverse is that it’s a singular destination, which couldn’t be further from the truth. In fact, it’s pretty much everything and the kitchen sink — it spills over, across and through all of our digital, virtual and physical lives into a myriad network of experiences.
If you strip everything else away, the simplest way to define the metaverse is “the next evolution of the internet” — where different iterations and instances of our work, communication and entertainment can connect and interact. And because it’s so new to mainstream society, there’s still debate on the similarities — and differences — between web3 and the metaverse.
But that’s a technical deep-dive for another time and place. What interests me about the metaverse is the massive opportunities for brands and advertisers. However, these opportunities don’t lie with the digital platforms and destinations being crafted — users’ behaviors and actions are the pot of gold at the end of the metaverse rainbow. Those insights and communities are what actually give the metaverse its intrinsic value, especially when trying to target, engage and build brand loyalty with consumers.
‘Contextual’ Versus ‘Additive’ Advertising
For brands, the metaverse has four main functions: places where people create, entertain, connect and explore. Each of these areas provides brands with unique opportunities to understand and capitalize on users’ actions and behaviors. For advertisers, there are two types of advertising in the metaverse, which are informed by these four functions — I refer to them as contextual advertising and additive advertising.
I’ve broken them down below to highlight their differences, but also to illustrate the types of brands that stand to benefit from each one:
- What is it? Native advertising in a virtual world, it is non-intrusive and (mostly) relates to external objects/places.
- Examples? Virtual storefronts like Balenciaga’s in Fortnite and the Gucci Garden in Roblox.
- Brands that will benefit? Brick-and-mortar retail stores, car companies/manufacturers, fast food chains.
- What is it? It positively affects a user’s experience by providing a product or enhancement that possesses value in the environment it’s distributed in.
- Examples? Virtual goods like Atari shoes in The Sandbox and Monster Energy drinks in ‘Death Stranding’.
- Brands that will benefit? Fashion/luxury, CPG/consumable goods, clothing/shoe brands.
Mapping Out Ad Opportunities Based on Users’ Behaviors
As I mentioned, the four functions of the Metaverse can be broken down by behaviors and actions: where people create, entertain, connect and explore. The beauty of having this behavioral framework allows advertisers to map out and identify where contextual and/or additive advertising will have the most impact.
- Create — these are digital universes where users are empowered to be virtual architects building their own digital worlds (think Roblox and Minecraft).
- Contextual or Additive? Contextual advertising wins out here, as brands can integrate themselves into the actual creative process by helping to craft worlds that promote what the brand stands for. We’ve seen McDonalds file trademarks to open virtual restaurants in future metaverses, while building a Micky D’s in Minecraft is one of the more popular user tutorials. These pieces of ‘virtual real estate’ become a mainstay in these virtual worlds and help generate brand awareness.
- Entertain — shared viewing experiences like watching movies, live concerts or attending tentpole events will play a big role in the metaverse (think Billie Eilish’s upcoming concert in the game Fortnite).
- Contextual or Additive? Additive advertising has immense potential as digital souvenirs like POAPs (Proof of Attendance Protocol tokens) act as the ‘virtual lanyards’ that prove to everyone you were present for the big event. Add in limited-run items and souvenirs like the ones Ariane Grande released during her Fortnite Ryft tour, and brands have the opportunity to provide clout and value for future metaverse experiences.
- Connect — these are places where people can spend quality time with each other and can directly communicate (think Instagram, Snapchat and Horizon Worlds).
- Contextual or Additive? Both Contextual and Additive advertising are ideal in these spaces. Virtual storefronts (Contextual) and virtual goods and AR lenses (Additive), for example, tick both boxes for fashion, luxury and retail brands.
- Explore — this function takes adventure to the next level by playing on our curiosity of discovering new items or outfits, as well as hidden spaces or places (think Decentraland and The Sandbox).
- Contextual or Additive? Contextual advertising is a natural fit here and, by logical extension of what it means to explore, travel and tourism brands will do well here. We see exploration as a key component of popular metaverses where events like Metaverse Fashion Week reward users for attending certain events or discovering hidden, limited-run items.
Despite all the hype and buzz surrounding the metaverse, when brands truly understand users’ behaviors and actions, it allows them to identify corresponding advertising opportunities to not only ensure they’re reaching their audiences, but they’re also doing it in a way that’s targeted, relevant and enhances the user experience.
My final thought for all of you advertisers out there: even though the metaverse seems like the wild wild West, there is in fact a method to its madness. So before you throw your hands up and decide to just spray and pray with your marketing budget, don’t cheapen your brand by leaving a bad taste in people’s mouths. Once you identify their specific actions and behaviors, you can map those directly to where — and how — you need to be in the amorphous digital worlds that are the impending metaverse.
Matt Maher is Founder of M7 Innovations, where he guides brands and executive teams through the ever-changing media and technological landscapes — from AI and voice technology to AR and VR. He formerly served as VP of Innovation at Assembly — AdAge’s 2018 Agency of the Year — and has given keynote presentations at CES, SXSW, industry panels and private client events. Follow him on Twitter and connect with him on LinkedIn.