How to do Metaverse Marketing?

62 million yuan in 40 minutes. This is the feedback given by the market after the speculation of "Jay Chou entering the NFT industry" spread.

On January 1, 2022, Jay Chou's clothing brand "PHANTACi" cooperated with the trendy art platform Ezek to launch the Phanta Bear Phantom Bear series NFT, with a total of 10,000 NFTs, with a starting price of 0.26 Ethereum (approximately RMB 6,200) each.

Jay Chou posted a photo of Phanta Bear #10000. The number 18 printed on his jersey is exactly Jay Chou’s birthday. Basketball is also Jay Chou’s hobby. （Instagram@jaychou）

Even though Jay Chou's company JVR Music later clarified that there was no interest relationship between Jay Chou and the project, and that he and his wife Kun Ling showed off the NFT they received out of friendly support. But it is undeniable that Jay Chou's move did attract a lot of attention to this collaboration. As of January 11, 2022, the series topped OpenSea's trading volume list for the past 7 days.

In the summer of 2021, Zuckerberg announced that "Facebook" would be renamed "Meta" to popularize the concept of "Metaverse" to the public. Subsequently, related concepts such as NFT and Roblox became popular in various industries, including brand marketing.

Since 2020, a wave of "metaverse" marketing has been set off both at home and abroad, not only attracting luxury brands such as LV, Gucci, and Balmain to join, but also domestic new consumer brands such as Nayuki Tea and bosie have also launched their own NFT collections.

However, behind the rush of brands to embrace the concept of "metaverse", many chaos have also arisen. Even Elon Musk, who is keen on discussing avant-garde topics such as virtual currency and Mars immigration and has a fanciful speaking style, believes that the current concepts of the metaverse and Web3 are more like "marketing gimmicks" and have not made much substantive progress.

The true direction and outcome of the metaverse are yet to be determined. But in an environment where everyone wants to get a piece of the pie, how can brands grasp the possible direction of the metaverse without deviating from marketing logic? When the Metaverse develops to the next stage, how should related marketing evolve?

The Dao Fa Research Institute has summarized the three common directions of metaverse marketing at home and abroad, and combined with the development history behind it, interpreted and prospected some marketing cases, in order to start a discussion.

01 Gamification Marketing: Wherever the Metaverse evolves, marketing will be achieved

Games are an important landing area for the Metaverse at this stage - this is the general understanding of industry insiders, including Baidu Vice President and General Manager of Security Ma Jie.

From a technical perspective, games are a way of "building another world in a virtual environment" and are one of the important tools for building the basic elements of the metaverse - virtual scenes. From the audience's perspective, games are most in line with the public's current understanding of the metaverse: the "Oasis" in the movie "Ready Player One" that we use to benchmark the metaverse is essentially a game: a "advanced" game that is more real-time, interactive, and immersive.

The music industry was actually the first to successfully combine the "metaverse" features of games with marketing activities. As early as 2018, electronic musician Marshmello held a real-time online concert in Epic Games' game "Fortnite". Players gathered in the same venue in the game at the same time, and while listening to music, they could freely go on and off the stage and dance together. It was considered the earliest in-game disco scene.

The epidemic broke out overseas in early 2020. Social isolation and travel restrictions dealt a severe blow to the offline and real economy. Musicians appeared at the first time and used games as an important window for interacting with fans. In April 2020 and August 2021, singers Travis Scott and Ariana Grande respectively held concerts in Fortnite. Taking advantage of recent developments in the gaming industry, Fortnite has tailored various experiences for the singers and fans of the two concerts. Taking Ariana Grande's concert as an example, players can surf on pink waterfalls, jump among flowers, and dance closely with Ariana's virtual image to the music.

At the beginning of the concert, the player enters a one-on-one space with Ariana, and she will let you "fly" to her like a magic trick to watch her sing, which is full of interaction.

Image source: YouTube@Faiz

The success of the online concert also made the term "metaverse" popular and recognized by many people. With the help of Epic Games' technology, online concerts not only solve the distance problem, but also achieve things that neither singers nor fans can do in real life through special effects, such as Travis Scott's teleportation during the performance, and the interaction between fans and singers without boundaries and distance. For example, the singer is no longer the only one with special effects, and fans can also lie in a pink bubble with Ariana... A concert for one person has turned into a carnival for a group of people.

In comparison, the cooperation between brands and games does not seem to be so "cool" and grand, but it also has a similar effect.

The luxury industry was the first brand to gamify its marketing activities. In December 2020, French brand Balenciaga released its early summer 21 collection on a small scale in the form of VR. When customers receive the device and put on the helmet, the new season's ready-to-wear fashion show appears before their eyes. The release of the 21st Fall Series was completed in a game environment called Afterworld: The Age of Tomorrow. Players can unlock new season ready-to-wear clothes through game missions, and the angle of each look can be changed by dragging the mouse. In the era of the epidemic when offline activities have decreased, this multi-dimensional clothing display combined with technological means has become another way for brands and consumers to interact after live video.

Balenciaga 21 autumn series, users can see the details of the ready-to-wear clothes and the effects of wearing them more comprehensively and three-dimensionally from all angles

Image source: Balenciaga official website

If the above marketing actions are not "metaverse" enough, then the games created by Gucci and Nike on the gaming platform Roblox have taken this marketing method to a higher level: they incorporate real-time interactive elements on the basis of simple simulation of reality.

In May 2021, luxury brand Gucci collaborated with Roblox to develop the experience game Gucci Garden Archetype, which was open from the 17th to the 31st of that month. The real Gucci Garden is located in Florence, Italy. It is an experiential scene that integrates exhibitions, catering, and retail. This game also replicates the experience that consumers get offline to a large extent: different scenes are designed in the game with Gucci products interspersed among them, some of which are only for exhibition and some can be purchased, so as to encourage players to explore the scene as much as possible and enhance their interaction with the brand.

When you enter the game's garden scene, players will be randomly given patterns.

However, the game initially received only a 15% positive review rating (Roblox Wiki). Compared with traditional Roblox games, many people complain that there are too few free items in this game, the paid items are too expensive, etc. Later, the two parties made adjustments and the approval rate rose to 33%.

Despite this, because it was launched at the time when the "Metaverse" became popular, Gucci Garden is still regarded as one of the pioneering actions in Metaverse marketing. In addition, a bee-logo Dionysus bag that appears in the game has a resale price that is more expensive than the physical bag of the same model. This also makes the public feel that "consumers are very receptive to the Metaverse."

Half a year later, Nike established NIKELAND on Roblox. Players can try on a variety of classic products of the brand in the game’s digital showroom, explore the scenes and receive corresponding rewards. In addition, the game strengthens the connection between offline activities and NIKELAND: players only need to turn on the relevant sensor devices on their mobile phones to complete their exercises in NIKELAND by moving their bodies and mobile phones.

SCENE IN NIKELAND

NIKELAND is more like "Oasis" in Ready Player One, because it mobilizes more parts of the player's body and activates a new human-computer interaction experience. For most people who try this interactive mode for the first time, this exciting "first time" has the shadow of Nike.

Of course, these are not the only three brands that combine gaming with marketing. According to the Knife Institute alone, brands such as Ralph Lauren and Forever 21 have built related games on Roblox.

At present, most brands that carry out such marketing activities are in the clothing industry, and most of them are related to concepts such as trends and fashion. The limitations of gamification marketing on the industry can be described as “games can make you successful or fail.” Unlike the world background of "Ready Player One", people currently enter the virtual world just for games and entertainment. Therefore, it will be effective if industries that inherently have imaginative elements and surreal colors enter the virtual world to advertise, such as the fashion industry.

In addition, with the successive actions of major brands such as Nike, the gamification marketing activities of the Metaverse have gradually lost their early dividends. If a brand does not have sufficient technical support and cannot find many audiences in the gaming world, its marketing effect will only be worse than before.

However, Zuckerberg and Meta (formerly Facebook) may be able to bring more tracks into the game of "metaverse marketing."

After announcing his vision of building a metaverse, Zuckerberg launched the VR office program Horizon Worlds, hoping to provide a third space for people working remotely where they can have a more realistic and immersive work and communication experience.

If Horizon Worlds becomes popular, we can not only play games in the virtual world, but also work in the virtual world. This means that a more diverse and larger group of people will enter the Metaverse and spend more time in it. Brands also have more scenarios, opportunities and ways to carry out marketing activities here.

Why can’t the TV and whiteboard in the virtual office have their own brand?

Image source: Meta official website

02NFT/digital collection sales: enhancing user stickiness in the real world

NFT is a non-fungible token and a type of token in the blockchain. According to Wall Street Journal, NFT is indivisible and irreplaceable. Based on these two characteristics, NFT can become a carrier of digital products to protect the copyright of creators. It can also be used to bind to real-world goods and serve as a voucher, similar to the invoice we get after purchasing goods.

The earliest NFT project "Crypton" was born in 2017 and consists of 10,000 unique pixel avatars. Anyone with an Ethereum wallet can get an avatar for free and trade it on the secondary market.

One of the first groups of people to enter the world of NFTs were artists. Some artists' works have no physical form, but are electronic paintings, audio clips, etc., so they often worry about copyright issues. Presenting and selling works in the form of NFTs can solve this problem well. In addition, creators can set commissions for each NFT transaction to ensure profits.

The first auction of Murakami's series in collaboration with virtual creation studio RTFK (now acquired by Nike) brought in a total of approximately $160 million

Artists' embrace of the virtual market has greatly promoted the determination of fashion, trend and luxury brands to engage in NFT marketing. This is because artists, as opinion leaders in the fashion and trend culture fields, will bring the attention and curiosity of a large number of consumers into the virtual world and into the new concept of NFT. For luxury brands, NFTs need to be purchased with Ethereum and can be resold in the secondary market. They are high-priced, rare, and have investment attributes, which overlap with the characteristics of luxury goods. Therefore, people who are interested in NFTs are likely to also be interested in luxury goods.

But unlike artists, many brands choose to combine NFTs with physical objects/real senses and introduce them with NFTs, ultimately aiming to enhance the interaction between consumers and brands in the real world. Take the French brand Balmain as an example. In December last year, Balmain released a co-branded sneaker with the American high-end gym Dogpound, and simultaneously released its NFT version, which was auctioned on OpenSea with a starting price of 2.5 Ethereum. The brand has set different levels for the bidding price: consumers who bid more than 6 ethers can get an additional private lesson from the founder of Dogpound; those who bid more than 10 ethers will also receive two tickets to the Balmain fashion show; those who bid more than 14 ethers will receive two backstage passes to the show.

Victoria's Secret Angels, actors, athletes and other public figures are frequent visitors to Dogpound

Image source: Instagram @dogpound

Balmain's Chief Marketing Officer Txampi Diz believes that the integration of NFT, a virtual product, with the real world is the key to the project: "This is a major future trend I see for NFT in luxury digital marketing."

In the view of the Daofa Research Institute, this is also one of the ideas for NFT marketing and even metaverse marketing that consumer brands can learn from. The country does not encourage speculation in NFTs or digital collectibles, and consumer goods are difficult to compete with luxury goods in terms of rarity and investment value. Therefore, linking NFT marketing with real-world reward mechanisms can shift consumers' attention from the "metaverse" to the unique experience provided by the brand, thereby enhancing their awareness and intimacy with the brand.

However, it should be noted that this reward mechanism needs to be sufficiently experiential and rare enough, otherwise there will be a mismatch in tone, and the NFT concept and the prize will be inconsistent, which will greatly reduce the brand's image in terms of professionalism and responsibility.

In addition to establishing a reward mechanism, there is another marketing idea worth learning from: using NFT as the "identity card" of brand members.

Last December, beer brand Budweiser released nearly two thousand bottle NFTs. According to foreign media AdAge, Budweiser wants to add other benefits to the owners of this series of NFTs and use it to build a community of loyal consumers, similar to the traditional membership community.

In addition to Budweiser, Ezek mentioned at the beginning of the article, and The Heart Project, an NFT project collaborated with Edison Chen, are all preparing to give more functions to the NFTs they release, such as membership certificates, concert tickets, etc. This idea borrows the "access" feature of NFT and extends it from the blockchain field to real life.

In today's society, everyone wants to talk about NFT, largely because of its "noble origin" - NFT is supported by advanced technologies such as blockchain and Bitcoin. Being able to own an NFT seems to prove that you are at the forefront of the times. Vogue Business has also stated that NFT products are almost seen as access tokens for high-end communities or groups. Owning NFT means owning the key to the door of nobility.

In addition, true NFTs are based on Ethereum and often require a high price or a certain amount of effort to obtain, which has become one of the ways for brands to identify consumer loyalty. Injecting membership benefits into NFT not only highlights the value and rarity of NFT, but also amplifies consumer satisfaction.

There are also companies in China that cleverly utilize the access and membership attributes of NFT. On November 11 last year, Tencent, the "goose factory", distributed the 23rd anniversary commemorative edition NFT to its employees, which Tencent called a "digital collectible." This series is based on the QQ penguin image and has undergone different evolutions, including some special images such as "Girl Goose with a Pearl Earring". All collections are distributed to employees free of charge, and are stored on Tencent’s alliance chain “Zhixin Chain” and are only open to internal employees.

Some penguin images from Tencent's anniversary digital collection

Image from the Internet

After the event was launched, employees posted photos of the penguins they received as gifts on platforms such as WeChat Moments, which triggered internal exchanges and discussions among employees: some people posted on the company platform asking for exchanges, and some employees who received the Easter egg money sold their digital collections.

Although this is not a brand marketing campaign, the logic behind it is the same: turning limited, hard-to-obtain, and brand/company-related NFTs into social currency, providing satisfaction and social topics for people “in the circle”, releasing a sense of yearning for people “outside the circle”, creating topics for the public, and building brand awareness while “watching the fun”.

03Hyper-realistic digital human: the messenger connecting the metaverse and reality

The concept of virtual humans has already existed.

Hatsune Miku, who was born in 2007, appeared on the stage of the Internet Spring Festival Gala in 2019. The talent show "The Next Generation of Idols" also introduced the virtual idol "Hotz". Precisely because the public is familiar enough with virtual people, after the concept of the metaverse became popular, virtual people have also been upgraded and become messengers connecting virtuality and reality. They break out of the second dimension, become more human, and integrate more into the real world. They are called Metahuman, hyper-realistic digital humans.

The most popular hyper-realistic digital human in China is none other than AYAYI. In May 2021, a photo of AYAYI was posted on Xiaohongshu, which sparked discussion because her appearance was too real and too perfect. A number of bloggers also imitated AYAYI's makeup.

AYAYI reached the peak as soon as she debuted. After her first appearance, she checked in at various art exhibitions and took close photos with William Chan. She then cooperated with brands such as Guerlain and Porsche, and joined Alibaba as a digital employee. AYAYI's business is so much and so fast that most real-life bloggers can't catch up.

Image source: Xiaohongshu@AYAYI

Overseas, the first digital person to enter the public eye was Lil Miquela. She was born in 2016, has a wheat-colored complexion and freckles on her face. She is a model and musician of Spanish, Brazilian and American descent. She first appeared only on her Instagram account. Since 2018, Lil Miquela has begun to be favored by the fashion circle. She has worn the latest series of ready-to-wear from Burberry, CHANEL, and COACH, and has appeared in the same frame with the real person Bella Hadid. She even donated her income to charity.

For brands, digital marketing follows the methods of influencer marketing and celebrity endorsements, but is more "reliable" than the latter two. After all, digital people will not be unable to appear on time due to flight delays, and the epidemic and social isolation cannot prevent digital people from visiting exhibitions, going out, checking in, and watching shows.

In addition, digital marketing seems to be more cost-effective. YOOX, an Italian luxury discount store under Net A Porter, has created its own virtual image Daisy, which currently only appears on Instagram and has collaborated with brands such as Ralph Lauren and New Balance. Although YOOX's brand director did not reveal the specific cost of developing Daisy, he said that she is cheaper than real-life influencers.

The Knife Skills Research Institute believes that there are two reasons why Daisy is referred to as "cheap" here: First, the brand director of YOOX once said that Daisy was created based on user data and consumer preferences on its own platform, so it can capture the audience more accurately and obtain a higher ROI, while saving the time and energy of identifying and selecting cooperating bloggers. Secondly, Vogue Business has reported that many brands have begun using digital humans to test how new products look on the body to avoid producing too many garments. Daisy may also be able to play the same role and save YOOX further costs.

Daisy's presentation

Image source: YOOX official website

Foreign media have reported that the popularity of digital humans has given us an early glimpse of the celebrity marketing scenario in the metaverse. However, it currently appears that digital humans cannot completely replace the role played by real people in brand marketing, mainly because they lack authenticity. Even faced with such a lifelike AYAYI, many netizens still think that her movements are too fake and her expressions are not rich enough. YOOX also said that the next stage of the team's task is to inject more authenticity into Daisy, including defining her preferences, her perspective on things, etc.

In fact, the problems faced by digital people such as AYAYI are the same as those faced by many real stars, that is, how to maintain a balance between "personality" and "reality". Generation Z’s pursuit of self, liberation of consciousness and tolerance of diversity have created Lil Miquela with freckles and A Xi, a Chinese virtual idol who was described by netizens as having “too dry skin”. These "flawed" digital people are popular, and they also reflect young people's pursuit and concern for truth and humanity. This is also something that brands need to consider when doing related marketing.

04 Conclusion

Musk's skepticism about the metaverse mostly lies in the way we enter it - he doesn't think that "putting a TV (VR device) on the nose" can allow people to enter the virtual world naturally and comfortably.

As to whether the metaverse can eventually be realized and how to realize it, there is still no clear direction. Large companies that do not want to miss the "trend" have set up relevant departments and are preparing to carry out long-term research, striving to respond as soon as progress is made in the "metaverse". A person who works in luxury information in Shanghai told Daofa Research Institute that his current department is called "Web3 Business Development" and he is now learning about Roblox and the Internet process from scratch.

However, for most companies, the current focus of metaverse marketing is not on "metaverse" but on "marketing", that is, how to reasonably use these emerging concepts and interactive methods to enhance the stickiness between the public and brands and play a role in icing on the cake. The actions mentioned above are all good examples.

As for how to integrate them, this requires brands to have an objective and logical understanding of the concept of the metaverse, and at the same time be clear about their own brand positioning, the purpose of their marketing actions, the target groups, etc. Consumers may not be able to tell whether a marketing move is simply to catch the trend or gain traffic, but they can feel it. Blindly considering the "metaverse" will give consumers a sense of disharmony and will not help the long-term development of the brand.

Author: Knife Research Institute

Source: Knife Skills Research Institute