Diving into Marketing in the Metaverse

Neil Stevenson first used the term “metaverse” in his novel, Snow Crash (1982), to represent a virtual place where the characters went to escape the dreary totalitarian reality (Marr, 2022b). Since then, it has transformed from a world of imagination to an elevated virtual experience on the next level for its users. This evolving tool has grasped the attention of marketers who are obliged to gain all the needed expertise on the marketing innovations awaiting to go viral such as the case of Tik Tok during the outbreak of the COVID 19-pandemic. Multiverses have already fully infiltrated the internet, hence why leading businesses such as Apple, Nike, Microsoft, and Coca-Cola have already adapted their technology to freely engage in virtual reality (Marr, 2022b). According to Bloomberg estimations, by 2024, the market of multiverses will be worth 800 billion US dollars (Metaverse Market Size, 2022). From buying virtual groceries to buying virtual real estate via cryptocurrencies and NFTs a lot goes on inside this fascinating alternate universe. This article aims to offer a better overview of the rise of the metaverse and its operations through NFTs and cryptocurrency to visualise how it can be an effective marketing tool.

Figure 1: An illustration of the metaverse.

What is the Metaverse?

Metaverse is a term that has been circulating around the internet for some time. Even though most people are familiar with the concept, it is certainly worth reinstating: envision a three-dimensional, augmented, and virtual reality, where people can work, live, shop for groceries, purchase art and real estate, and interact with other people on several platforms, all behind a computer screen observed from the comfort of one's home. Through digital alters egos, known as “avatars”, real people are able to “live” in augmented reality. Multiverse is always active, and self-contained, even when players are not active in the game. The virtual “lives” run their course, ideally portraying the alternate dimension framework (Marr, 2022b). It uses user-generated content as well as virtual and individual identities and agencies (Needle, 2022). Through the utilisation of human interface technologies, multiverses share their decentralisation all the while running a full economy on digital currencies.

Currencies of the Metaverse

The three primary forms of currency utilised in retail markets are blockchain cryptocurrencies, non-blockchain cryptocurrencies, and real currencies (Hamilton, 2022). Blockchain currencies are cryptocurrencies created on a blockchain. They are decentralised and the most popular form of currency on the metaverse now. Non-blockchain cryptocurrencies are currencies managed by the host platform (Hamilton, 2022). At the moment, Fortnite, a member of the VR, utilises cryptocurrencies not based on a blockchain (Ledstrup, 2022). According to reports, Meta plans to launch their own non-blockchain cryptocurrency which is rumoured to be called Zuck Buck and will only be valuable in Meta’s platform (Hamilton, 2022). Ultimately, real currency is still available for limited use (Hamilton, 2022). The most common utilisation of real currency is to purchase cryptocurrencies since they hold real money equivalents in the multiverse. Being a cryptocurrency owner is an unspoken obligation since cryptocurrency owners engage in purchasing art and real estate through NFTs in augmented reality.

Figure 2: The logo of non-fungible tokens.

NFTs in the Metaverse

NFTs are a crucial part of all metaverses seeing as they are used as currency in most of them. NFT is an abbreviation for non-fungible tokens which are cryptographic tokens on a blockchain unable to be replicated (Non-Fungible Token (NFT): What It Means and How It Works, 2022). They are often represented by real-world items, the most comment being an artwork and recently real estate, however, they can represent intangible things such as human identities, property laws, or rights. “Tokenising“ real-world tangible assets make buying, selling, and trading them more efficient while reducing the probability of fraud (Non-Fungible Token (NFT): What It Means and How It Works, 2022).

Contrary to public belief, 2021 was not the year NFTs were invented or introduced to the market. They were first launched as a concept in 2015 when Kevin McCoy introduced the first one ever, Quantum. However, after Quantum was launched the public was not immediately taken by the idea. In 2021, known as the year of NFT, their popularity exploded by requiring high supply and demand. The main directive behind this colossal change of public opinion was due to prestigious auction houses like Christie’s and Sotheby’s taking their auctions online and selling NFT art pieces. The marketplace of non-fungible tokens was ultimately validated by Christie’s sale of Beeple’s Everydays: The First 5000 Days for 69 million US dollars. Another strong reason backing their rise was blockchains establishing their own versions. To ensure the authenticity of all digital assets blockchains such as Cardano, Tezos, and Flow set their own standards.

Figure 3: An illustration of Beeple's Everydays, sold by Christie's for $69 million.

The ultimate surge of power in the year of NFT was when Facebook rebranded as Meta and joined the metaverse. The demand within the multiverse turned out to be outstanding. Currently, multiple NFTs circulate to purchase goods and real estate, the most popular being the MANA, SAND, and AXS token. With a market cap of $4.3 billion, MANA is Dreamland’s cryptocurrency, build on the Ethereum blockchain. It is currently the most prominent cryptocurrency. Sand is Sandbox’s cryptocurrency also built on an Ethereum blockchain capping at $3.4 billion. Lastly Axie Infinity’s cryptocurrency; AXS token capped at $3.2 billion and built on the identical blockchain, differs from the others seeing as its use and viability are limited to their game transactions.

The most recent and popular transaction is purchasing real estate through NFTs (theSkimm, 2022). Metaverse real estate is entirely virtual and created by pixels, however, purchasing real estate in VR is similar to buying properties in the real world. Location, and size determine the price point which can amount to millions of real American dollars for a large condo in Decentraland’s fashion district (theSkimm, 2022). Once the purchase goes through every owner of virtual real estate receives a blockchain code as proof of ownership. The real estate market is extremely volatile and risky according to experts (theSkimm, 2022). Since the entire concept is fully based on cryptocurrency and digital wallet ownership, the future of real estate in augmented reality is uncertain making its marketability speculative.

Figure 4: An illustration of two avatars interacting in the metaverse.

Metaverse Marketing

The decentralisation found in the metaverse allows companies to freely express their creativity by creating a world that fully symbolises the brand identity of the company (Hetler, 2022). Creating an entire world dedicated to one brand is far more immersive, unique, and brand-representative than any words, images, commercials, or ads. Customers can profit from VR’s immersive experiences by being able to view everything in 3D and full-scale visualisation, which offers endless creative space for marketers to create innovatively personalised campaigns (Hetler, 2022). Personalised content, strategies, and targeting are already the focus of traditional marketing and can be further developed in the multiverse.

An already implemented example of untraditional marketing is that of IKEA’s Place (Hetler, 2022). IKEA’s Place allows customers to view the furniture inside the room from the comfort of their homes (Hetler, 2022). Virtuality removes the physical boundaries of traditional marketing. Metaverse is extremely accessible for marketers and the implementation of new marketing tactics is still a novelty, thus making it far less competitive than traditional marketing (Marr, 2022b). The lack of competition and freedom of creativity allows companies to easily stand out through their chosen methods of advertising (Marr, 2022b). However, the lack of competition simultaneously equates to a lack of foolproof marketing results and techniques that guarantee success with augmented reality customers.

Seeing as it is decentralised, the metaverse allows organisations to use platforms owned by other companies as opposed to traditional advertising which has platforms that review all content before going live in respective and predetermined domains — such as publications, radio, billboards, and banner ads (Hetler, 2022). The possibilities are endless in terms of content creation and strategic planning in a fully immersive and digital alter world. However, seeing as it is restricted to higher-income individuals due to the need for a digital wallet to fully “live“ in augmented reality, many marketers have chosen not to invest in professional growth in VR.

Figure 5: An illustration of real estate in the metaverse.

Conclusion

The metaverse is a unique, innovative, and expensive alternate world, where owners of digital wallets and cryptocurrencies have started to build their virtual lives. It is highly technologically advanced, decentralised, and accessible. The extreme increase in popularity which then led to a radical increase in value for cryptocurrencies, NFTs, and virtuality reality in 2021 threatens to prove itself very volatile and provide moderate stability. Worlds built on alternate virtual realities are unique and uncharted territory making it ideal for marketers to professionally acquire in order to begin untraditional marketing. The lack of competition on the platform further increases the high stakes for both success and failure. The only certainty surrounding the VR market is that global brands are joining in and they will either lose or gain significant investment opportunities and financial income.

Bibliographical References

Hamilton, A. (2022, March 3). The Beginning Of NFTs - A Brief History Of NFT Art. Zeno Fine Art. https://www.zenofineart.com/blogs/news/the-beginning-of-nfts-a-brief-history-of-nft-art

Hetler, A. (2022, September 28). Marketing in the metaverse: What marketers need to know. WhatIs.com. https://www.techtarget.com/whatis/feature/Marketing-in-the-metaverse-What-marketers-need-to-know

Ledstrup, D. (2022, June 9). Everything You Need to Know About Shopping in the Metaverse. Kubbco. https://www.kubbco.com/shopping-in-the-metaverse/

Marr, B. (2022b, March 21). A Short History Of The Metaverse. Forbes. https://www.forbes.com/sites/bernardmarr/2022/03/21/a-short-history-of-the-metaverse/ (Marr, 2022b).

Metaverse market size (2022). Bloomberg. https://www.bloomberg.com/press-releases/2022-03-09/metaverse-market-size-worth-678-8-billion-by-2030-grand-view-research-inc

Needle, D. (2022, October 3). The metaverse explained: Everything you need to know. WhatIs.com. https://www.techtarget.com/whatis/feature/The-metaverse-explained-Everything-you-need-to-know

Non-Fungible Token (NFT): What It Means and How It Works (2022, June 22). Investopedia. https://www.investopedia.com/non-fungible-tokens-nft-5115211

theSkimm (2022, August 24). Metaverse Real Estate: What It Is and How It Works. https://www.theskimm.com/money/metaverse-real-estate

Visual Sources