Metaverse & What it Means for the Brands? | MMA Global

Metaverse & What it Means for the Brands?

January 25, 2022
Submitted by Nitin Gupta, Founder & CEO, Xapads Media Private Limited


Metaverse as a concept was first introduced in science-fiction novel Snow Crash by Neal Stephenson in 1992, which showcased a Digital / Virtual World. Within a decade of the Novel's launch, the first Virtual Reality World by the name Second Life was launched, which allowed users to create their avatars and live in this virtual world. Similarly, Virtual Reality Headsets / Augmented Reality Glasses are not something new and have been available in the market from quite some time now. So now the question is why this sudden buzz around Metaverse?

Though giants like Facebook, Microsoft & Google have been exploring VR / AR / Metaverse from quite some time now, but all hell broke loose on 28th October 2021, when Mark Zuckerberg during Facebook Connect 2021 Event, rebranded Facebook as Meta Platforms and brought Metaverse back to the headlines.  Further declaring the company's commitment to developing that future and talked about how it will redefine the way Humans Work, Play & Socialize with each other. However, one of the reasons for this very bold move could be Apple's strategy to limit ad tracking that hit Facebook's Top & Bottom line.

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As of October 2021, the total market capitalization of Web 2.0 metaverse companies was 14.8 trillion U.S. dollars.  For gaming and eSports and also Facebook (now known as Meta after an October 2021 restructuring and pivot to VR), this figure sits much lower at 1.98 trillion and 0.90 trillion, respectively. Source: Statista|

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The role of Meta (Facebook parent Company) in creating the Metaverse is similar to the size and relevance of Facebook in creating the Internet / World wide web, the fact is what Meta is creating is just one of the building blocks of the Metaverse. In the gist, Metaverse stands not for a Single Technology (VR / AR / Computers / Smartphones) or Platform (Second Life / Fortnight / MineCraft), but the amalgamation of these which would allow users to live their lives virtually on any of the platforms with the help of compatible tech.

Benefits to brands/ How brands can benefit from Metaverse

If we are considering Metaverse to be the Virtual Home of the users, where they will Work, Play & Socialize, then definitely money will be involved in some or the other manner wherein Digital Economy will be one of the centerpieces of the Metaverse. Users can offer their Products (Digital Goods, Art, NFTs) & Services on Metaverse, which in turn they can use to buy other digital goods like Clothes / Accessories, Virtual Homes & Vehicles for their Avatars. At this point, these digital goods are linked to a particular platform, but in the true Metaverse,users will be able to set up their avatar in one platform and take it to another just like you are wearing your Zara Jeans and traveling anywhere physically.

Current Metaverse Platforms like Second Life, FortNite, MineCraft or Roblox, revolve around Gaming, with Economy being linked to the users for buying Digital Goods for their Avatars. But Meta's Platform can totally shift the paradigm to the whole new level, as it will be more about Users Working & Socializing on the Platform, and hence spending more time on the Virtual World, as compared to Gaming based Virtual Worlds.

Meta being an Advertising backed Business, its needless to say, that the hence launched Virtual World will be Advertising backed as well. With Facebook already reaching billions of users globally, it will be just a matter of days to see mass adaptation happening on the platform. Since the majority of the Brands, including the Digital ones, still rely completely on our Physical life, offering Goods & Services, in exchange of Money or our data Metaverse can open new doors of revenue generation for these brands.  They will be able to sell their goods & services in our virtual lives as well. Think about a Virtual Clothing Store, where you can purchase clothes & accessories for your Avatar, paying top money for the same, while it looks like fools gold, just take a pause and read this:  A Gucci virtual bag was sold on Roblox (Virtual World) for over USD 4000+, way more than its worth in real / physical life. Think about Digital Art being bought & sold for millions of dollars in the name of NFTs, can be the best use case scenarios for the Brands to be the early adapters of this revolution.

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There are predictions out there that Metaverse could reach the $800 billion mark by 2024, as it is already sitting at the $47 billion mark thanks to a surge of interest in 2020 when the pandemic peaked. Source: Bloomberg|

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Digital advertising still depends heavily on the Standard Banners, Rich Media Banners & Video Advertisements, giving limited options to the Brands to communicate with their Customers. While these creatives work good on Web 2.0 environment but will look like leaflets in the Web 3.0 Metaverse, where Brands will be able to reach out to their customers way more innovatively, like a Virtual Store (H & M recently did trial run of their Virtual Store in CEEK City Universe) or like a Virtual Rock Concert (Justin Bieber's Concert on Wave). In other words you can easily say that more than creatives, it will be about Experiences now.

Much like how a popular energy drink which has been investing heavily in Extreme Sports for over a decade where hundreds of sportspersons and maybe a few thousands of the fans attend these extreme sporting events. Now consider these extreme sports in a Virtual World, where any user can participate from any corner of the world, irrespective of their physique, health conditions, age, gender or capabilities, enjoying the true essence of the sport virtually in an avatar, such virtual experiences will actually give wings to the masses. Needless to mention the Brand Recall & Penetration among the consumers globally.

At the end I can just say that, the building blocks i.e. the technologies, platforms & digital economy are already in place for Metaverse and it's only a matter of time, when it will become a reality, err Virtual Reality, sees a mass adaptation. So the earlier the brands & ad-tech companies will accept the tidal shift, the better it will be for their business, or they will become physical phone books in the time of smartphones.