Meta completes a year, Where’s the Verse?

It was October 28, 2021, when Facebook CEO Mark Zuckerberg went all in on the concept of the metaverse. By changing the name of his parent company to Meta, he unveiled plans for a new digital playground in which individuals, celebrities, brands, and organisations could all socialise, play, work, and maybe one day even live, "one day" being the operative term here.

With Meta’s recent dismal quarterly reports and dives in its share prices, perhaps the most positive news that Zuckerberg has come out with in a while is that the company’s engineering team has finally figured out how to properly depict feet on screen.

However, other brands have kicked off their own metaverse platforms to varying degrees of success. As Facebook completes one year of its new avatar (pun intended) as Meta, exchange4media takes a look at how immersed both advertisers and audiences truly are.

The Facts

Vivek Kumar Anand, Director – Business & Innovation, DViO Digital, says we have to accept that the Metaverse as a concept itself needs to be better established and understood by everyday people beyond some vague thing emerging out of augmented reality, virtual reality, 3-D and mixed reality.

“We know that an entire ecosystem will be built through web3, but we are just scratching the surface, and the same reflects in terms of growth for Facebook. When Facebook changed its name to Meta, its vision was to own the entire stack, from hardware to content, as Apple does. It has a good hardware product in Oculus [a VR headset] and is positioned to argue that VR is the future,” says Anand.

Aashutosh Katre, Director, Yellow Seed, says, "When we list down brands who’ve joined the race to Metaverse, NIKE (November 2021) and its NIKELAND is the first name to be mentioned. Amongst other participants, we have other key global participants across industries: Samsung, Gucci, Dolce & Gabbana, Louis Vuitton, Coca-Cola, Wendy’s Balenciaga, Adidas, and Ferrari.

Manish Solanki, COO and Co-Founder, TheSmallBigIdea, says that for brands, the metaverse is a potential marketing platform to reach the digital-first audience, create a digital ecosystem, and unlock a sustainable revenue model.

“The immersive and experiential nature of metaverse has made it a very interesting place for a lot of luxury and entertainment brands that are already making forays into this space.  As of now, there are two ways in which a brand can participate: either they can collaborate with existing metaverse platforms and customize the environment, or they can create their own metaverse environment, where users can embark on quests and gather digital collectables,” says Solanki.

“Once more brands venture into the metaverse, virtual space can be rented to set up outlets to sell the NFTs, allowing users to explore the site, sample novel products, and even evaluate customizations without physically commuting to a store,” he adds.

The Figures

According to a report, Horizon Worlds rolled out to all Quest users in the US and Canada in early December; its monthly user base has grown by 10x to 300,000 people, but it has yet to be a significant number of users.

“But when we look at their software tool like Spark AR- it is leading the AR development, and as per one of the reports released in October 2021, more than 700M people use AR effects across Facebook's apps & devices every month, and it's an impressive number. Metaverse is a work in progress; however, players like Facebook, Roblox, and Unity are poised to leverage this anticipated growth,” notes Anand.

Katre adds that consumers' inclination towards the Metaverse has grown to the extent that 51% of global consumers have shown interest in purchasing virtual products. “Besides brands, individual creators who produce AR/VR-based content on Instagram also have grown by 120%. This interest in Metaverse has pushed Meta to invest $150 million to empower next-gen creators to produce high-quality content for the platform,” he says.

Amanjot Malhotra, Country Head - India, Bitay, points out that video games and virtual worlds are easier to build and design, and XR wearables come in a range of price points (so they’re becoming more affordable). “By 2024, there will be an estimated 1.7 billion augmented reality user devices globally. In a study from the Pew Research Center and Elon University’s Imagining the Internet Center, 54% of experts said that the metaverse will be a more refined, immersive, and well-functioning aspect of daily life for half a billion people or more globally by 2040,” he says.

That being said, third quarter trading volume for the top 10 metaverse projects may have fallen 80% compared to the second quarter, but analytics firm DappRadar suggests that interest in virtual worlds still remains. Besides, the metaverse sector has been hit with a fair amount of negative press as of late, particularly around suggested low user activity across certain platforms, such as Decentral and Meta — reports which they have refuted.

Malhotra refers to DappRadar, which noted in an October 20 report that while trading volumes have taken a sharp hit during Q3, the average number of NFT sales for these 10 projects only decreased by 11.55% compared to Q2.

“DappRadar explains that lower trading volumes could merely reflect decreasing asset prices and not necessarily a lack of interest, noting that: “We consider this a bullish sign because it shows that the hype for these types of projects hasn’t decreased. Instead, the fall of cryptocurrency prices has affected the projects’ overall trading volume instead of a lack of interest,” he quotes.

The future

Sukrit Singh, Founder- XP&DLand, observes that many brands have turned to the metaverse and Web3 tools to not only stand out in terms of offerings but also cater to a change in perception that they are becoming more tech aware. It has been a significant driving force for most brands. It has led most of them to continue exploring new iterations of web3 concepts, be it NFTs, Tokenization, Metaphysical Experiences or more.

Anand Singh, Co-Founder and COO at Sure About Shor, notes that with decentralised currencies and NFT also being a part of the WEB 3.0 the total number of users is approximately 2.3-2.5 million worldwide, with the metaverse expected to grow at 38% CAGR between 2022-30, even as Meta expects 1 billion users by the end of this decade.

Rajagopal Menon, Vice President, WazirX points out that the brands will go where audiences go. “Right now, most brands are tipping their toes in the Metaverse. Experiments are being conducted by different marketing managers and getting their hands dirty. Most managers understand that these are early days yet. The technology is still new and the critical mass of the audience is not there yet,” he says.

“But most brand managers understand that their TG spends ads in front of a screen every day playing games, watching videos, scrolling through endless content. These are different universes - Whatsapp, Hotstar, Instagram, ShareChat Universes. One day they could transform or at least evolve into a more immersive experience,” adds Menon.

Post Script

All the activations mentioned above are great examples of brand marketing in the metaverse. But there is still much to consider before integrating it into every brand strategy.

“There’s a reason why pioneering sci-fi novelists like Octavia Butler and Isaac Asimov warned us of the woes of futuristic technology. The metaverse comes with a heap of data, privacy, and security concerns,” muses Malhotra.

He concludes, “Any new tech innovation requires more security measures, but the metaverse will demand new methods for data privacy and protection. For example, personal verification could require more user data, increasing privacy risks. Some experts are concerned about the metaverse being used as the ultimate surveillance tool. And if something happens in the metaverse, what are the legal ramifications in the digital and physical worlds?”