Given the history of Meta Platforms Inc., it is relatively easy to dismiss Mark Zuckerberg’s vision of a future in which human interaction is widely conducted via avatars in virtual reality settings. After all, it sounds like a daydream being promoted by a social media billionaire looking to distract investors from recent revenue challenges and a questionable record of social responsibility. But dismissing all the related hype would be a mistake because the metaverse isn’t just about Meta.
Metaverse marketing strategies do not need Zuckerberg to be on track to become the future norm, perhaps a lot sooner than some brand managers might think. After all, when it comes to interacting with consumers, the metaverse experience has already taken things up more than a notch.
For example, when rapper Travis Scott partnered with Epic Games to perform an in-game concert for Fortnite players in early 2020, he didn’t just show other musicians a cool way to connect with millions of fans during a pandemic. While Fortnite had previously hosted similar events, Scott’s giant shapeshifting virtual avatar officially transformed Fortnite from popular video game into a leading metaverse platform. And by re-imagining the concert experience, Scott delivered a watershed moment for the music industry.
As TechCrunch noted after a Fortnite tour by Ariana Grande attracted 50 million participants last year, the metaverse concert experience is now even more interactive, offering “a handful of mini-games that gave players more to do than just flying around while a gigantic virtual pop star does her thing.”
Now that the concert experience has been elevated to include surfing on rainbows, it would be a mistake not to recognize that the future of entertainment is all about immersive metaverse environments that enable much more consumer participation and even co-creation. In fact, it would be a mistake not to recognize that the same can be said about most industries.
Here are six other mistakes to avoid when planning your metaverse strategy.
Mistake 1: Assuming the metaverse is far away
The metaverse is not just for musicians. As part of an “Into the metaverse” offering in late 2021, Adidas sold more than US$22 million worth of non-fungible tokens, or NFTs, that created a community of consumers with exclusive ties to the brand. In addition to special events and experiences, holders of Adidas NFTs gain access to digital items that they can use on certain metaverse platforms (starting with The Sandbox, an online community that enables users to monetize creativity) along with the right to purchase limited-edition products designed to make them stand out in the non-digital world.
Owning an Adidas NFT, for example, gives consumers the right to purchase a real-world version of the tracksuit seen in the company’s new profile pic—a Bored Ape Yacht Club (BAYC) NFT that the company named Indigo Hertz. (BAYC pics are digital images of indifferent-looking cartoon primates that exploded in popularity last year, generating a fortune for developer Yuga Labs.)
According to Vogue Business, future product drops for Adidas NFT holders will be unveiled in digital and physical comic books created in collaboration with BAYC and other trending metaverse players such as NFT influencer Gmoney and Punks Comic, an NFT series drawn by Marvel and DC Comics artist Chris Wahl that was launched by NFT collector and influencer Beanie.
In addition to having exclusive rights to special merch drops, Adidas’ NFT community will help shape what kinds of products and experiences the company develops for the digital and physical worlds. “Adidas is in the metaverse,” Tareq Nazlawy, Adidas’ senior director of digital growth explained to The Verge. And using NFTs to engage customers was “the dopest thing to do in that space.”
The lesson here is that Adidas isn’t the only major brand already in the metaverse game, so don’t get caught putting off strategy development like too many brands did back when the Internet itself seemed like a lot of hype. The metaverse is destined to become part of our daily lives, which is why now is the time for more brands to enter the metaverse game and try to figure out what it means for them.
Mistake 2: Trying to dominate
It is easy to see the metaverse as just another market that brands can dominate, but being a winning player requires ditching traditional corporate mindsets.
For Adidas, seeking partnerships with existing metaverse influencers and established virtual communities like The Sandbox—where Adidas has purchased virtual land so it can offer branded content and experiences—was not just a tool to accelerate speed to market. It was about working with others to spark creativity and enhancing community interactions.
Mistake 3: Assuming the metaverse will reflect real-world structure
Being virtual, metaverse environments obviously offer freedom from geographic limitations. But when it comes to the removing barriers, geography is just the start.
Keep in mind that we are talking about the third era of Internet development being formed by disruptive technologies—ranging from AI and machine learning to quantum computing and blockchain—coming together and maturing at the same time. As a result, brands need to think of the metaverse as “the great remover of barriers of all kinds,” including equity or class barriers (the widespread use of avatars could even prove to be a great bias eliminator, opening doors for brands to better connect with talent and consumers alike).
Simply put, we are talking about a much wider and more open playing field that allows brands to connect much more directly and deeply with their audiences. Just look at the blockchain-based trading card system developed by basketball. Using NFTs, the National Basketball Association has generated hundreds of millions of dollars in new revenue while taking fandom to a deeper level by simply allowing consumers to own and trade “moments” that moved them, meaning digital highlights of their favourite player moves or team victories.
With limitations being eliminated, the bottom line is that brands can now be much more present during key moments of engagement, including the point of product delivery or first usage.
Mistake 4: Focusing on transactions
Don’t just enter the metaverse with a focus on seeking monetary gains. After all, the same forces of disruption that are toppling barriers to brand interactions are also driving waves of cultural change. Amongst other things, this is producing a generation that craves interactivity along with a proliferation of touchpoints, experiences, opportunities – and ultimately human knowledge.
In other words, as an emerging market with reduced barriers, the metaverse represents opportunities for brands that go well beyond selling additional goods and services. In fact, you could argue the major opportunity is all about creating new consumer connections, cultural relevance, and community clout, which is why major brands are not fixated on pricing points when planning how to get to a bang for their metaverse buck.
Adidas’ metaverse strategy is a good example of targeting revenue growth via deeper engagement. As Nazlawy told Vogue Business, “It’s a flip of the normal business model where we make stuff and hope people will buy it. You’re not just buying the product. You’re becoming a member of this community.”
In the metaverse, good will and influence are the ticket to prosperity.
Mistake 5: Failing to seize the opportunity to drive stakeholder capitalism
The last thing the metaverse needs is more pointless marketing strategies. They are a waste of everyone’s time. They also waste the opportunity to develop new business models.
As Vivaldi founder and CEO Erich Joachimsthaler, author of The Interaction Field: The Revolutionary New Way to Create Shared Value for Businesses, Customers, and Society, noted in an interview with Innovation Management, stakeholder capitalism hasn’t really advanced much beyond words because there hasn’t been a framework that effectively drives it. But the metaverse is all about collaboration and participation—which makes it well suited to supporting business strategies aimed at meeting latent consumer needs and solving big, hairy problems.
LoanSnap is a good example of a company with an interaction field business model. It has attracted investors like billionaire Richard Branson and LinkedIn co-founder Reid Hoffman by using artificial intelligence and NFTs to make mortgage underwriting more customer friendly and accessible to retail investors. As outlined in Forbes, the company isn’t just using disruptive technologies to move the mortgage process online or make it faster—it aims to a) use AI to offer smart mortgages that put consumers in a better financial situation, and b) allow average investors to get in on the action by assigning NFTs to property loans.
As Forbes noted, “financial regulation and capital requirements have historically made it virtually impossible for everyday citizens to get involved in mortgage lending. This has left large financial institutions and the government to soak up all of what’s considered to be one of the lowest-risk and consistent yielding asset classes available. Tokenizing housing debt eliminates many of these barriers to entry—making it theoretically possible for anyone with a DeFi wallet to own a fractional share of a mortgage.”
The takeaway here is that LoanSnap has clearly thought about how it plans to use NFTs to solve a problem. Every brand manager worth their salt knows that they are not selling product, but answers to fundamental questions. Who am I? Where do I belong? Am I valued? And while the metaverse will change a lot, consumers will still reward brands that answer these questions.
“The last thing the metaverse needs is more pointless marketing strategies. They are a waste of everyone’s time. They also waste the opportunity to develop new business models.”
Mistake 6: Equating the metaverse to NFTs
This article has highlighted how some companies have built their metaverse strategies around NFTs, which have attracted a lot of attention for good reason. After all, as Fortune recently noted, prices for Bored Ape NFTs have ranged from about US$260,000 to over US$2.8 million (as of the first quarter of this year). But don’t get stuck on NFTs or the prices they can garner.
Non-fungible tokens are more than dope. When it comes to brand applications, the possibilities range far and wide (from issuing digital property rights to documenting product origins and ethical supply chains). But NFTs represent just part of a dramatic expansion of branding opportunities—so don’t limit your thinking to tokens when exploring how to best take advantage of the metaverse. Remember it is an immersive and interactive environment, so focus on meeting consumer needs and demands in new and more engaging ways.
Ultimately, the evolution of the metaverse will bring together today’s disparate and fragmented ecosystems, allowing businesses to connect with consumers and solve problems in revolutionary new ways. We’ll soon see how far things go in 2022. But whatever happen this year, the writing is on the virtual wall—and it says the winning brand strategies for the metaverse will not take a business-as-usual approach.