Advertisers actively testing metaverse marketing shared some hard truths for the burgeoning media channel at the IAB’s Audience Connect event in New York City this week.
Metaversum early adopters, for the most part, say they’re just exploring the possibilities rather than trying to really demonstrate ROI.
And while hugely popular online games like Roblox and Fortnite are lumped together with Metaverse platforms, they are truly Web 2.0 games without the decentralized interoperability promised by Web 3.0 and blockchain technology. The few actual Metaverse environments on the market, like Decentraland and The Sandbox, don’t provide the audience reach that advertisers crave.
Web 2.0 vs. Web 3.0
“Right now, a lot of people are merging the metaverse with virtual worlds,” said Rachel Noonan, director of strategy at ad agency Jam3. The Metaverse is an emerging internet protocol in which interconnected platforms use blockchain technology to enable the exchange of digital assets, she said.
Web 3.0 is the realization of that aspiration that is decades away, said Jessica Berger, VP of Innovation at Publicis Media.
When we think of the metaverse today, online gaming platforms like Roblox or massively multiplayer online games like Fortnite come to mind. But these types of interactive and immersive 3D environments are rooted in Web 2.0 infrastructure and aren’t built on top of the decentralized blockchain technology that’s the hallmark of Web 3.0, Berger said.
For example, Roblox is Web 2.0 because its users cannot transfer the digital assets they purchased on that platform to other virtual environments, said Lauren Griewski, CRO at web 3.0 advertising platform Permission.io (and a meta and Roblox Graduate). .
In a Web 3.0 environment, ownership of digital assets — known as non-fungible tokens (NFTs) — would be recorded 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, qualify as true metaverse marketing, although they are often classified as such. But these hybrid efforts help bridge the gap between Web 2.0 and Web 3.0.
While Metaversum spaces are sometimes hyped as a new way to reach a younger, hipper audience, the in-market Metaversum platforms don’t always attract large numbers of active users. Decentraland and The Sandbox, two of the most popular non-meta metaverse platforms, both attract around 1,000 average users daily.
“Sometimes there are 46 people walking around. There is nobody on these platforms,” Noonan said. “Or they come for an event or a concert and then leave again.”
Meanwhile, Meta’s Horizon Worlds averaged 300,000 monthly users two months after its release in December 2021, but Meta hasn’t released updated user counts for the platform since February.
Some Metaverse-related online games draw huge crowds — like Roblox, which attracts more than 50 million average users daily. But mainstream popularity at this level doesn’t exist in real Metaverse rooms.
Eric John, vice president of media center at the IAB, said he tried to show his Dolce & Gabbana NFT on Decentraland recently but nobody else was there. When your virtual fit is fresh but no one is around to make some fuss about it, does it really beat?
Metaverse platforms struggle to increase participation rates as users often face complicated setups that require linking a digital wallet to cryptocurrency or NFTs, said Vadim Supitskiy, CTO at Forbes. He stressed that simplification and enlightenment are key to bringing more users, and therefore more brands, into the metaverse.
Attribution and brand safety
When it comes to measuring the ROI of Metaverse campaigns, “no one asks,” said Scott Varland, SVP and head of Jack X, North America for agency Jack Morton Worldwide. “Everyone is into that kind of experimentation, but honestly, when we talk about what we’re going to do, there’s no mention of ROI.”
But some brands are starting to focus on metaverse marketing attribution. Decentraland offers limited metering capabilities, and many virtual worlds have trading integrations that can be attributed, Berger said. But at this point, Metaverse’s measurement capabilities are mostly focused on upper-funnel metrics like brand awareness and sentiment, she said.
While the Metaverse plan 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 PR backlash.
For example, Roblox’s recently launched advertising platform has to be age-restricted due to the platform’s popularity with children, Noonan said. And whenever brands meddle with new media channels, “consumers will toast brands, regardless of whether brands are on the right side of privacy, security, or advertising standards,” she said.
To stop giving ad-haters even 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 phase, so campaigns tend to be “either a runaway hit or a total flop,” Varland said. “You have to be prepared for some things to go wrong.”