Metaverse Marketing Guide

Here are all the facts you need to know about the metaverse. This year, the metaverse hurricane has been blowing across the globe.

• In March, the gaming company Roblox was officially listed on the New York Stock Exchange, becoming the first stock in the Metaverse concept;
• In April, gaming company Epic Games announced it was raising $1 billion to invest in its Metaverse project;
• In May, Microsoft announced that it was working to build an “enterprise metaverse”;
• In August, ByteDance acquired Pico, a domestic VR hardware startup, to build its Metaverse.
• In October, Facebook officially changed its name to Meta to attack the metaverse;
• In November, Huawei released the AR interactive experience app "Starlight Tower" to develop the Metaverse industry chain;
• In December, Baidu's Metaverse product "Xiran" officially opened for targeted internal testing...

Not only in the technology circle, the metaverse trend has swept across various fields and has almost become a "hot spot" that brands must pursue.

For example, Gucci cooperated with the gaming platform Roblox to sell rare digital goods; Nayuki's Tea officially announced its virtual brand ambassador NAYUKI and launched NFT digital artworks; and brands such as Coca-Cola, Yili, and Zhong Xuegao are all exploring the metaverse.

However, there are also doubtful voices in the market, who believe that the Metaverse is nothing more than a "new gimmick" for capital to make money, and that brands are just taking advantage of the popularity.

Today, let’s think about three core issues.

1. What exactly is the metaverse?
2. Why is the Metaverse so popular?
3. How does a brand find its focus?

1. Do you really understand the "metaverse"?

The metaverse, called “Metaverse” in English, is a combination of the two words “meta” (meaning beyond) and “verse” (abbreviation of universe).

The term first appeared in Neal Stephenson's 1992 science fiction novel Snow Crash. In this book, Metaverse is a virtual city environment that users can enter through VR devices and control their own avatars to interact with each other.

The concept of the metaverse often appears in science fiction films and TV shows. For example, in the "Matrix" series, humans are trapped in a metaverse called "the Matrix", and intelligent machines use the human body as a source of energy.

In "Ready Player One", in order to escape the real world of energy crisis and global warming, humans enter the metaverse called "Oasis" through VR devices. It is both a massively multiplayer online game and a virtual society.

Regardless of the name, the core of the metaverse is the same, that is, "a persistent and decentralized online three-dimensional virtual environment . "

In the metaverse, everyone can have "identity recognition" and "value recognition" . Humans can enter the artificial virtual world through VR devices, mobile phones, computers, etc. and achieve real-time interaction. This ecosystem includes user-centric elements such as individual identity, content creation, virtual economy, social acceptability, security and privacy, trust and responsibility, etc.

Rabindra Ratan, associate professor of media and information science at Michigan State University, pointed out that the metaverse has three key characteristics: reality, interoperability and standardization.

• Reality means that virtual space can create an immersive feeling and even create a "parallel world" of reality;
• Interoperability means that people’s virtual identities can be seamlessly switched across “planetary systems” in the metaverse;
• Standardization is the technical foundation for various platforms in the Metaverse to achieve interoperability.

Does it sound mysterious? In fact, the metaverse is not something far away, and it is not even "new".

Online communities existed in the 1880s; chat rooms, AOL instant messengers, and the first social media sites developed in the 1990s; and the game World of Warcraft became a social venue for millions of people in the early 2000s.

These are the prototypes of the "metaverse". Nowadays, with the development of science and technology, various high-tech devices can make the "virtual world" more real and complete, thus deriving more possibilities.

Simply put, the metaverse is a fusion of the real world and the virtual world.

For example, in Animal Crossing: New Horizons, you work every day, sell furniture and clothes you designed to make money, and use the money you earn to buy concert tickets for a virtual artist. At the concert, you might meet a few friends and make appointments to meet offline.

Since September this year, the concept of the metaverse has exploded as a whole and has become a hot "cash cow".

According to incomplete statistics from Zhidongxi, from September to November 2021, there were 26 domestic companies and 35 foreign companies that invested more than 10 million yuan in metaverse-related fields, with a total amount exceeding 10 billion yuan.

The market value of the domestic internet celebrity economy company "Tianxiaxiu" soared by 5 billion yuan due to the publication of an open letter mentioning the Metaverse; the foreign chip giant Nvidia's stock price rose by 12.04% due to the development of the Metaverse infrastructure project Omniverse.

At the same time, there have been phenomena such as "house speculation" in the metaverse, "talent poaching" in the metaverse, and "brainwashing training" in the metaverse in the domestic market... which have aroused widespread controversy and doubts among everyone. Many people believe that the Metaverse is a sickle used by capital to reap profits and a deification movement by large companies.

So, is the metaverse a “new trend” or a “new gimmick”?

2. Is it the future? Or is it just a scam?

The New Media Research Center of Tsinghua University released the "2020-2021 Metaverse Development Research Report", summarizing the reasons "why we need the metaverse". Let us analyze it.

1. Technology craves new products. The technical applications of AI, XR, 5G, big data, cloud computing, and digital twins are becoming increasingly mature, and the metaverse satisfies the overarching imagination of multiple emerging technologies.
2. Capital is looking for new outlets . Capital's enthusiasm for new consumer sectors such as beauty, coffee, etc. has gradually cooled, and has turned to technology sectors with higher barriers to entry and long-term growth. The metaverse where reality and virtuality are superimposed will open up broad business potential.
3. The Internet urgently needs new breakthroughs. The main bottleneck of the current Internet industry is the involuted platform form. There has been a long-term lack of breakthroughs in content carriers, dissemination methods, interaction methods, sense of participation and interactivity. The Metaverse will bring about an overall iteration.
4. Users expect new experiences. As the natives of the Internet, Generation Z has a higher degree of dependence on and acceptance of technology. The Metaverse relies on somatosensory devices to free embodied interaction from the "thumb party" and create a highly immersive and realistic experience.

Especially under the influence of the COVID-19 pandemic, the entire society's online life time has increased significantly, the "home economy" has developed rapidly, and human real life has begun to migrate to the virtual world on a large scale.

2020 becomes the critical point for the virtualization of human society, and 2021 is the first year of the "metaverse". Ideally, the metaverse could apply to everything.

• The Metaverse office platform allows employees to work virtually from anywhere;
• The Metaverse real estate platform, where homebuyers can tour homes anywhere in the world;
• The Metaverse creation platform, where creators from all over the world can collaborate in real time and even “resurrect” historical figures;
• The Metaverse Mall can provide a more realistic online shopping experience, and can also customize products without leaving home;
• …

Meta develops Horizon Workrooms virtual office platform

After imagining the future, we return to reality. Based on the current industrial foundation, what possibilities are there between brands and the metaverse?

3. How can brands “take advantage of” the Metaverse?

1. Virtual people: spokespersons who will never fail

At present, the virtual human industry is one of the most mature commercial applications in the "metaverse", which can bring rich content and immersive experience.

Guosheng Securities divides virtual humans into four categories: service-oriented virtual humans (PGC+functional), virtual idols (PGC+IP value), digital avatars (UGC+functional), and creative carriers (UGC+IP value). The four types of virtual humans have similar production technologies, but have completely different development paths in application.

Service-oriented virtual humans provide users with humanized services, such as Xinhua News Agency virtual reporters and CCTV virtual sign language teachers. It can be foreseen that in the future, brand customer service and private domain traffic operations will also introduce more virtual service personnel.

Virtual idols are virtual images presented through technological means. They have their own personalities and can broadcast live, endorse products, hold concerts, etc. Compared with celebrities or anchors, virtual idols do not need to be paid, are not prone to "crash", and can be tailored according to brand strategy.

For example, Nayuki’s Tea officially announced the virtual character NAYUKI as its brand ambassador on its sixth anniversary. According to the official introduction, NAYUKI is a cosmic symbiote that will travel between virtual space and real life.

Hua Xizi launched its brand virtual image - "Hua Xizi", which is endowed with oriental beauty with brand characteristics. The overall image is inspired by the poem "Drinking on the Lake, First Clear, Then Rainy" by Su Shi, a writer of the Northern Song Dynasty. The lotus leaf decorations on the ears and the twin lotus flowers in the hands are all derived from the flowers of the Hua Xizi brand, and the dark blue highlight on the hair is the brand color of Hua Xizi.

Digital avatars have evolved from the "face-pinching" feature in games and can bring a high degree of immersion to users, such as the pinchable characters in Cyberpunk. In the future, it can be applied to the beauty, footwear and apparel industries. After users create their personal images, they can try on makeup or clothes online to reduce the uncertainty of consumer decisions.

The creative carriers are mainly created and operated by individual enthusiasts and communities, such as the virtual singer Luo Tianyi, the virtual beauty blogger Liu Yexi, etc. They can become a bridge for interaction between brands and users to promote products or co-create. However, there is uncertainty in the image and expression of this type of virtual person, making them unsuitable as brand spokespersons.

2. NFT Marketing: A New Experience of Digital Goods

The full name of NFT is Non-Fungible Token, which means non-fungible token.

Li Ming, director of the Blockchain Research Laboratory of the China Institute of Electronics Standardization, said that from a technical point of view, NFT is a digital certificate of a contract based on blockchain technology. It has the characteristics of verifiability, uniqueness, indivisibility and traceability, and can be used to mark the ownership of specific assets.

The Metaverse provides NFT with more diverse application scenarios. For brands, the following application directions can be considered:

1. Provide users with personalized gifts, vouchers, etc.;
2. Pre-launch promotion of events and product launches with early access tokens;
3. Use digital goods to supplement physical products and open up new sources of income;
4. Launch new digital products in advance for market testing to guide actual production and sales.

On International Friendship Day in July this year, Coca-Cola launched four multi-sensory NFT digital collectibles, including the Friendship Box (imagining the old Coca-Cola refrigerator as a dynamic loot box), the Coca-Cola Bubble Jacket (paying tribute to Coca-Cola's nostalgic delivery uniforms), the Sound Visualizer (visualizing the audio when enjoying Coca-Cola), and the Friendship Card (inspired by Coca-Cola trading cards from 1948-1990s).

Not long ago, Nike announced the acquisition of virtual sports shoe design company RTFKT Studios. RTFKT allegedly partnered with teenage artist FEVOCiOUS in February to sell real sneakers paired with virtual sneakers, successfully selling approximately 600 pairs/NFTs in just six minutes, netting more than $3.1 million.

On December 4, Amul and the Jing'an Branch of the Shanghai Public Security Bureau launched the first anti-fraud themed digital yogurt collection. Each bottle corresponds to an anti-fraud slogan to remind users to be wary of the Metaverse scam.

Amul also launched the pixel-style "O Universe Forest's "Sincere Idioms"" series of programs, interpreting three types of metaverse fraud methods with new interpretations of idioms: luring the tiger away from the mountain - forging digital collections to defraud; plucking feathers from passing geese - falling into the dilemma of pyramid schemes; monkey trying to reach for the moon - downloading unknown software that leads to information exposure.

3. Fusion games: Enhance brand exposure and convey brand concepts

Last year, American rapper Travis Scott held a virtual concert in the game "Fortnite", attracting 12.3 million viewers. After the virtual concert, Travis Scott's streaming traffic increased by 26%, and hot singles like "Stagazing" increased by 50%.

It can be foreseen that the traffic that the gaming world will bring to "brand exposure" in the future will be immeasurable. Some brands have already created services or established brand characters and arenas in games to integrate themselves into the gaming experience.

In September 2021, Balenciaga collaborated with "Fortnite" to launch a series of clothing, selecting the four game characters most loved by game fans: Doggo, Ramirez, Knight and Banshee, and pairing them with Balenciaga's classic works, allowing players to express themselves in a unique way.

Burberry has collaborated with Honor of Kings to launch a new skin, "Spirit of Nature", and a star legend skin, "Spirit of the Forest", for the popular female hero "Yao", incorporating classic Burberry elements into the game characters. However, due to the Xinjiang cotton incident, Honor of Kings announced the termination of the cooperation in March this year.

The gaming world can also become a portal for brands to deliver their values.

In 2018, Fortnite launched an event called Food Fight, in which players could fight each other representing the digital restaurants Durr Burger (Team Burger) or Pizza Pit (Team Pizza). Fast food brand Wendy's discovered that Durr Burger would store the steak for its burgers in the freezer, which conflicted with its slogan of "never using frozen beef."

So Wendy's created a brand mascot-like character in the game to destroy all the freezers in Food Fight mode and broadcast it live on Twitch. As a result, Wendy's increased brand mentions on social media by 119% and won eight Cannes Lions International Creative Awards.

Wendy's character in Fortnite

Venus, a women's razor brand owned by Procter & Gamble, created a series of avatars in "Animal Crossing" last year, presenting "more realistic" skin type characteristics, including freckles, acne, cellulite, stretch marks and psoriasis, to further convey the concept of its "My Skin, My Way" inclusive campaign.

Venus's avatar in Animal Crossing: New Horizons

Unilever-owned mayonnaise brand Hellmann's created a branded island in Animal Crossing: New Horizons, inviting players to drop off their spoiled radishes in exchange for a real donation to Canadian food rescue charity Second Harvest, while echoing its brand purpose tagline - "Food is too good to waste."

Hellmann's brand island in Animal Crossing: New Horizons

4. Extended reality: creating parallel worlds and providing customized experiences

The metaverse can use virtual and augmented reality technologies to bring people immersive digital experiences. Brands can use XR technology to create a "parallel world" to provide customers with highly personalized experiences and break free from the limitations of the physical world.

Nike partnered with brand experience company Hovercraft to create the NYC House of Innovation in New York, which provides users with a digital map and event listings. Users can explore a virtual amusement park located in Smith Rock State Park in Oregon, experience virtual products and virtual scenes, and get unique adventure opportunities.

Nike also created NIKELAND in Roblox's immersive 3D space. The buildings and venues are inspired by Nike's real-life headquarters. Users can participate in various mini-games with friends and create their own games. NIKELAND's digital showroom displays a variety of Nike virtual products, which users can freely match.

Vans launched a skateboard-themed virtual amusement park, Vans World, on Roblox, where players can freely explore, skateboard and participate in competitions. The Vans store in the park is filled with clothing, shoes, hats, flower petals and other items, which players can purchase with Robux, the currency in Roblox. Players can also customize the styles themselves and purchase physical customized products through the Vans official website.

Last year, GUCCI collaborated with Roblox to launch the virtual exhibition Gucci Garden in Florence, Italy. A series of themed rooms draw inspiration from Gucci’s advertising campaigns, design history and muses, offering a diverse and immersive multimedia experience.

Roblox simulates a physical experience where users, when visiting, can purchase digital items for their avatars that are only available for a limited time, thereby creating a sense of scarcity and increasing prices. Some of these virtual packs sold for 350,000 Robux, or $4,115, more than the $3,400 retail price of the physical packs.

Dimension Studio, a virtual production startup, has built a virtual production device. After users step onto the platform, they are scanned by 106 cameras and can be stereoscopically scanned into a 360° digital person in a few seconds. The 3D capture can be placed in the virtual world to test clothing and other items. It has currently provided services to Balenciaga, Jean Paul Gaultier and H&M.

4. Cool Thoughts on the Metaverse

The Metaverse will revolutionize the way consumers interact with brands.

With the Metaverse, marketing will break the routine. For marketers, there is nothing that cannot be done, as long as they can think of it; for consumers, we will have a wonderful immersive experience in the future.

It can be said that the Metaverse will bring an exciting future for brands, but there are still some challenges to overcome along the way.

1. The Metaverse has high technical requirements, and not everyone can use the equipment required for the Metaverse. For example, high-end computers, VR lenses, etc. This greatly limits the brand’s potential market and hinders the popularity of mass marketing.
2. Since the Metaverse is still an emerging trend, brands may still not be able to find the right place in it, and their messaging may appear too blunt and difficult to blend naturally and perfectly.
3. There are still many misunderstandings surrounding the Metaverse. Many people will simply understand it as a game, animation or even a gimmick to "scam" people, so the brand's efforts may not be taken seriously.
4. Data privacy and security remains a challenge in the Metaverse. For example, personal verification may require users to provide more data, thereby increasing data privacy risks. As new technologies emerge, there is a need to establish more secure methods of data privacy and protection.
5. The Metaverse is open to everyone, and brands need to be careful to protect their image. The more control users have over the Metaverse, the higher the risk that brands will be spoofed or damaged by users, which requires brands to be seamless, cautious and precise in their marketing strategies.

All in all, the Metaverse provides ample room for innovation for brand marketers and advertisers alike. Despite these challenges, there are opportunities to explore and break through, provide consumers with immersive experiences, and achieve cross-generational innovation victories.

Author: San Yvonne

Source: Decision Maker Retail Research Institute