With a recession on the horizon, brands are not pulling back on their metaverse-marketing spending — but few of them seem to agree about what exactly it is.
“Most brands have no idea what’s going on at all,” said Lewis Smithingham, svp of innovation at Media.Monks. “Which is great — that’s what we’re here for.”
Over the past year, different parts of the tech industry have laid claims to the metaverse, most prominently the gaming industry, which believes that the metaverse will arise out of pre-existing virtual game worlds, and the Web3 sector, which argues that the metaverse must be built on top of blockchain infrastructure if it hopes to succeed.
CMOs find themselves in a unique position when it comes to the metaverse because they are tasked with both allocating resources and marketing to consumers in an entirely new medium. But with so much disagreement about what the metaverse actually is, it’s difficult to know where to start — or how to justify the cost to shareholders.
The term “metaverse” was coined by Neal Stephenson in his science fiction novel Snow Crash, in which he described it as “the next big thing after the Internet.” In recent years, it has been popularized by Web3 enthusiasts as a decentralized virtual world built on top of blockchain infrastructure. However, there is no one agreed-upon definition of what the metaverse actually is.
That hasn’t stopped brands from trying to get a piece of the pie: According to a report from Business Insider Intelligence, spending on metaverse marketing will grow from $2.9 billion this year to $11.9 billion by 2025.
However, with so much confusion about what exactly the metaverse is, it’s unclear how exactly brands should be investing in it. Should they be building their own virtual worlds? Or should they be focused on creating experiences within existing ones? And then there’s the question of whether or not they should be using blockchain at all.
“Most people want to use blockchain because they think it sounds cool,” noted one commentator . “But very few people actually need to use blockchain.”
The gaming industry has been quick to lay claim to the metaverse, arguing that it will be built atop pre-existing virtual game worlds like Fortnite and Minecraft. While there are already some elements of social interaction and commerce within these games, they will need to be greatly expanded in order for them to serve as a fully fledged metaverse. For example, Nintendo has already begun selling in-game items like clothes and furniture for its Animal Crossing franchise, but players can only use these items within the confines of the game itself; they can’t take them with them into other games or sell them to other players.
The Web3 sector, on the other hand, believes that themetaverse must be built on top of decentralized infrastructure like blockchain if it hopes to succeed. One of the most promising projects in this space is Decentraland, which is building a VR world powered by Ethereum where users can buy and sell land, content, and experiences using cryptocurrency. However, Decentraland is still in its early stages and it remains to be seen if it will catch on with mainstream users.
The disagreements between these two camps could prove costly for brands who want to get involved in metaverse marketing but don’t know where to start. Without a clear understanding of what exactly the metaverse is supposed to be, it’s difficult to allocate resources or create effective marketing campaigns.
