Advertisers actively testing metaverse marketing had some hard truths for the fledgling media channel at the IAB’s Audience Connect event in New York this week.
For the most part, early adopters of the Metaverse say they’re just exploring the possibilities rather than trying to really demonstrate ROI.
And while wildly popular online games like Roblox and Fortnite are bundled with metaverse platforms, they really are Web 2.0 games without the decentralized interoperability promised by Web 3.0 and blockchain technology. The few real metaverse environments on the market, such as Decentraland and The Sandbox, do not offer the audience that advertisers are looking for.
Web 2.0 versus Web 3.0
“Right now, a lot of people are confusing the metaverse with virtual worlds,” said Rachel Noonan, chief strategy officer at ad agency Jam3. The Metaverse is an ambitious internet protocol in which interconnected platforms will use blockchain technology to enable the sharing of digital assets, she said.
Web 3.0 is the realization of that aspiration, which is still decades away, said Jessica Berger, vice president of innovation at Publicis Media.
When we think of the metaverse today, we think of online gaming platforms like Roblox or massively multiplayer online games like Fortnite. But these kinds of interactive and immersive 3D environments are rooted in Web 2.0 infrastructure rather than built on decentralized blockchain technology, which is the hallmark of Web 3.0, Berger said.
For example, Roblox is Web 2.0 because its users can’t transfer digital assets they’ve purchased on that platform to other virtual environments, said Lauren Griewski, CRO of Web 3.0 advertising platform Permission. .io (and a Meta and Roblox alum).
In a Web 3.0 environment, ownership of digital assets – called non-fungible tokens (NFTs) – would be accounted for on a blockchain, which is essentially a cross-platform digital ledger.
This means that marketing efforts involving purchasable digital assets in Roblox or Fortnite would not, strictly speaking, be considered true metaverse marketing, even though they are often classified as such. But these hybrid efforts help bridge the gap between Web 2.0 and Web 3.0.
Limited scope
While metaverse spaces are sometimes touted as a new way to reach younger, hipper audiences, metaverse platforms in the market do not consistently attract large numbers of active users. Decentraland and The Sandbox, two of the most popular non-Meta metaverse platforms, are both inspired by 1,000 average daily users.
“Sometimes there are 46 people walking around. There is no one on these platforms,” Noonan said. “Or they come for an occasion or a concert, then they leave.”
Meanwhile, Meta’s Horizon Worlds boasted 300,000 average monthly users two months after its December 2021 release, but Meta hasn’t released updated user numbers for the platform since February.
Some metaverse-adjacent online games draw large crowds — like Roblox, which draws more than 50 million daily average users. But mainstream popularity at this level is non-existent in true metaverse spaces.
Eric John, vice president of the IAB’s Media Center, said he recently tried to show off his Dolce & Gabbana NFT on Decentraland, but no one else was there. If your virtual form is fresh, but there’s no one to make noise, does it really snap?
Metaverse platforms struggle to increase the level of participation as users are often faced with complicated setups involving a digital wallet to be linked to cryptocurrency or NFTs, said Vadim Supitskiy, CTO at Forbes. He stressed that simplification and education are key to engaging more users, and therefore more brands, in the metaverse.
Attribution and brand safety
When it comes to measuring the ROI of metaverse campaigns, “nobody’s asking,” said Scott Varland, senior vice president and head of Jack X, North America, for agency Jack Morton Worldwide. “Everyone is in this mode of experimentation, but honestly, in the room, when we talk about what we are going to do, the ROI is not mentioned.”
But some brands are starting to focus on metaverse marketing attribution. Decentraland offers limited measurement capabilities, and many virtual worlds have business integrations that can be attributed, Berger said. But, at this point, the Metaverse’s measurement capabilities focus primarily on upper funnel metrics such as brand awareness and sentiment, she said.
While the plan of the metaverse right now may be to increase brand affinity, an experimental channel populated by teenagers may leave brands open to legal and ethical concerns, not to mention public relations backlash.
For example, Roblox’s recently launched advertising platform must be age-restricted due to the platform’s popularity among children, Noonan said. And whenever brands engage in new media channels, “consumers will roast brands whether they’re on the right side of privacy, security, or advertising standards,” she said.
To avoid giving ad haters more ammunition, advertisers and platforms should turn to third parties like the Electronic Frontiers Foundation and XRSI for guidance on best practices for user privacy and security in virtual spaces, Noonan said.
Ultimately, metaverse marketing is still in the trial-and-error stage, so campaigns tend to be “either wildly successful or a total flop,” Varland said. “You have to be prepared for some things to go wrong.”
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