Photo by Steve Johnson on Unsplash
It seems like every week we get news of a new brand exploring the metaverse and web3 technology. The new world being forged in the Metaverse is one that promises an immersive and compelling opportunity to create engaging consumer experiences. This is all very exciting to marketers, but the first question anyone will (and should) ask is “what will this do for my brand?”
Despite the potential being unlocked by platforms like Roblox, Decentraland, and Horizon Worlds/Venues, there remains healthy skepticism around the value of these early activations. This is certainly justified given the fact that as often as we see a cool brand experience being launched, we are also hearing news of a web3-related scam of some sort. There is a lot going on in the Metaverse space and it is hard to decipher between buzz and value.
Despite it being the early days of these more mainstream metaverse platforms, I wanted to spend some time thinking about reframing the marketing ROI discussion for brands in the hopes it may inspire more worthwhile exploration and development of the space.
Looking to Understand the Value of Metaverse Activations
Although we are seeing a lot of exciting press around brands entering the Metaverse, we are not seeing much information around results. When they are mentioned, they are often obfuscated by discussion of the overall investment and impact the brand has made by surrounding the activation with other established tactics. This leads me to believe that the numbers for branded Metaverse experiences are more often than not much smaller than other channels (though this isn’t to say they don’t have strong PR or data capture value). Whether I am right or not, I do wonder why we have seen so few results of Metaverse activations discussed openly. My hypothesis is that because the numbers are smaller than traditional advertising programs there is concern about the space looking weak from an ROI perspective.
Resetting the ROI Definition for New Mediums
It’s unfortunate that this is how many marketers are coming to be suspicious and doubtful of the current metaverse environment on offer to them. Metaverse opportunities for brands are not going to be comparable to any other kind of marketing ROI for a long time still.
You are not going to see the same traditional return from $100K spent on a digital ad campaign that you will by investing in a Metaverse experience, but that should not be the anchor. Investment in the space for brands should potentially not even come from a marketing budget, but rather be thought of as innovation or R&D. Value should be considered across a spectrum from near-term to long-term with thought given not just to immediate impact and engagement, but factors like: earned media lift, engagement with high value niche communities, CRM and loyalist retention, and capability enhancement. With this in mind, I’d like to elaborate on a few of these initial avenues to frame Metaverse ROI around.
Near Term Value Focus: Visible Innovation and Engagement with Valued Communities
A couple areas brands can consider leveraging Metaverse activations for in the short-term include driving visibility in media and creating engagement with high-value niche communities. A few months back Chipotle launched a Roblox game allowing fans of the fast casual restaurant to digitally roll burritos to garner digital currency which could then be exchanged for real world entrees. While this experience surely didn’t drive a major amount of revenue for the chain at scale, it did help to position itself as an innovative brand and provide younger customers (likely to be on Roblox) a fun way to engage with the brand. Similarly, JPMorgan recently created a virtual lounge in Decentraland to help promote their Blockchain-based platform Onyx and bring attention to their report on Metaverse opportunities. Again, the value here for the brand lies not in expecting significant transaction volume through this touchpoint, but rather in building a reputation for innovation and showing up authentically in a space with metaverse users who may be more likely to explore web3 banking solutions in the future.
Medium Term Value Focus: Building Direct Connection with Customers
The second horizon to consider when exploring ROI in the context of Metaverse and web3 is the potential for direct connection with customers and moving toward enhanced CRM programs. Starbucks is one such forward-thinking brand who has announced the intention to create an NFT-enhanced loyalty program for customers. Although details are scarce, they have mentioned experiences and perks being provided to NFT holders. It’s easy to dismiss this effort as a gimmick designed to generate headlines and discussion, but if they can create an intuitive path for customers to purchase and engage with NFTs it will unlock a big customer data opportunity. If the brand were to create ‘smart’ NFTs (capable of being programmed to change at different times and provide different things), the brand could potentially test different offers at a personalized level and collect that data to fuel their broader loyalty program.
Long-Term Value Focus: Future-Proofing Your Capabilities and Opportunities
We are already seeing the impact VR, AR and 3D design is making on social networks like Instagram and Snapchat and it’s expected that this kind of content innovation will only continue, whether in these current Metaverse platforms or whatever’s next. As a brand it’s important to always be exploring what’s next so you are not caught off guard if and when it matures into an important channel.
Nike is an example of a brand well ahead of this curve, having patented their trademarks for virtual goods and acquired digital collectible studio RTFKT. Now, they are in position to create digital representations of their products on any platform that emerges. It is never too soon to start planning for the future - even in the Metaverse. The current Metaverse provides a great training ground for brands looking to build up their digital experience capabilities and learn new technologies.
Whether you think these new platforms are useless for your brand at the moment or believe it’s going to create a multi-trillion dollar impact, like McKinsey does, there’s no denying that the underlying technologies are going to play a role in the future of marketing. Getting your teams familiar with designing and producing content in 3D, AR, and VR now can pay dividends later. Considering these efforts from an investment and innovation lens helps put the goal in perspective - building a future-proof foundation doesn’t always start with immediate ROI.
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