In my last article, we looked at the game-changing potential of the metaverse. Specifically, how 3D graphics will shift the internet from 2D static experiences to immersive 3D synchronous experiences, we can enjoy together. With that reframe in mind, what are the implications for marketing in the metaverse, and what can brands do to take advantage of the possibilities? This question requires speculation and imagination to approach. To set down our preconceived notions of marketing, social media, and the internet itself, and challenge our mental models to look beyond what we're used to and consider what could be.
To begin that process, let's look at an interesting example of a company that redefined itself over the past couple of decades, transformed its industry's technological landscape, and redefined its marketplace: Netflix.
Since its creation, Netflix's business has been to deliver entertainment to customers. Initially, the company did this by shipping DVDs in the mail. Then, in 2007, the company pivoted to streaming content, becoming the first major streamer of the digital age. Fast forward to 2013, when Netflix released its first slate of original series. Over the next handful of years, as the streaming market became white hot, Netflix became one of the largest film and television studios on Earth. Netflix was competing with (and frequently outperforming) its non-streaming competitors. Netflix produced programming that won or was nominated for dozens of Oscars and Emmys. From 1998 to 2022, the company ballooned in value to nearly $120 billion, redefined its business model, and initiated a transformation of the entertainment industry at large.
All that innovation and expansion sits on top of the technology development that made the new platform possible. It is critical to remember that Netflix (or anyone else) could only do this once the technological requirements to stream high-quality video came into existence. And to their credit, Netflix invested millions of dollars in developing this technology, helping create the space they later occupied. Our understanding of what Netflix is and does has shifted over time, prompted by changes in technology and customer habits and preferences.
Once the technological barriers are removed, and the metaverse is fully realized, it is reasonable to assume there will be many new versions of this same pattern. This is because new technology allows for new products and forms new customer behaviours, allowing old (and new) brands to redefine themselves and how they market themselves to customers.
So, let's imagine ourselves in that reality, where the metaverse (i.e., 3D internet) is ubiquitous, and customers can acquaint themselves with a new way of experiencing the internet. Then, let's consider how contemporary brands market themselves in presently available formats and what they could do in a 3D internet environment.
Nike today
Nike spent over $3 billion on advertising in 2021. Roughly one-third of that can be attributed to social media spending. They have over 100 Facebook pages, over 100 Twitter accounts, 16 Instagram accounts, and 40+ Youtube channels. The firm also has brought social media in-house and has a whole staff supporting their accounts. Why does Nike spend so much? Well, they are a global brand with an influence in markets all over the world and across multiple sports and activities. It is hard to estimate the ROI for Nike's marketing budget, as the brand also sponsors major athletes. It is still being determined where these sponsorship payments show up in the financial statement (as part of marketing or their own cost), but the point is these sponsorships have an effect that is not easy to track. A Nike athlete doing exceedingly well or poorly may impact how much coverage their athlete gets and how much screen time the Nike swoosh does as well. We can say this: Nike has a massive chunk of the market. Telsey Advisor Group has estimated that Nike has 39% of the global footwear market and 13% of the global athletic market. If a company with this presence still spends billions annually on marketing, we can assume there is some benefit to it.
Nike's potential in the metaverse
New Forms of Customer Service Imagine you are trying to buy a new pair of shoes. You may be unsure how they will fit, so you could speak to a customer service bot that could answer your questions. Or, perhaps, you are trying to buy a new pair of shoes you already own. If Nike no longer makes them, the same bot could point you towards a similar shoe currently available. Imagine if you could also see reviews of the product - not just the ones on the Nike site, but reviews across web pages. Some of this functionality exists already, but it takes work to do on the Nike website. Imagine if this was as easy as entering the question in a chat with an AI shopping bot.
Maximized Cross-Selling
In recent decades, Nike has become a fashion brand. People are willing to buy jerseys for teams they don't support because they like the aesthetic. (I own a Miami Heat Vice Night jersey and a Knicks FDNY City jersey because they both look cool. I also am a huge soccer fan, and I get a new USA jersey every World Cup.) Now, imagine if Nike were to create its own metaverse. They could use the data from my purchases to cross-sell like never before. Imagine if I am buying a new Knicks jersey (like a good New Yorker) and get an ad for an aesthetically similar France jersey. I would buy the France jersey as well. What I am about to say may seem surprising, but jerseys have become a fashion accessory. The branded merchandise market was worth roughly $30B globally in 2021, according to market research firm imarc. These sales are not just to fans but also to people who think these jerseys are fashion accessories or status symbols. A 2018 SBNation article discussed how almost no one in Samoa played basketball or followed the sport, but NBA jerseys had become one of the island nation's hottest fashion accessories. Jerseys now represent more than the team or the player; they represent the sport, or a piece of Americana, in the case of the NBA jerseys. The Nike catalogue is almost too extensive for someone to review; with their metaverse, they could position new products to existing customers, including customers who did not realize that there was something that fit their aesthetic in a totally different sport.
Utilizing Pre-existing IP
Another consideration here is that Nike itself has fans. Not just fans of their athletes or sports but actual fans of Nike. People love the brand and love their products. Imagine giving these fans more control and rewards for their fandom. (This is possible through NFTs, but if we leave them out of the equation for now.) Nike could leverage this new 3D medium to have fans vote on new colour designs, styles, and releases. Furthermore, Nike owns decades of iconic content. Think of their ads during the World Cup, Olympics, or the Superbowl. Ads featuring Lebron James, Roger Federer, Lance Armstrong, and Michael Jordan. All of this content and the access they have to athletes could allow Nike to become a content producer. (Think of how Amazon began as an online bookseller before morphing into everything it is today, including Amazon Studios.) Content Nike owns could then be exclusively released on its platform.
Marriot today
Marriot spent $77 million (roughly one-third of its total marketing budget) in 2020 on social media advertising. The other two-thirds were spent on TV ads, print ads, radio spots, and other traditional marketing channels. In 2022, they also launched a podcast. In 2020, their social media mix included TikTok and paid-travel influencers. The hotel brand takes its own industry-specific approach to marketing, as pictures of a hotel can only do so much. Instead, Marriot works to create a buzz around its properties by associating a persona or sense of status with the properties. They do this by aligning the appropriate influencers with their brand and having these influencers chronicle their travel and stays at these properties. In the metaverse, they could take this to entirely new heights.
Marriot's potential in the metaverse
3D Tours For all their uniformity of design and layout, Marriot has numerous properties that offer a unique experience. A Marriot metaverse tied to each property would allow a potential customer to understand more about the experiences on offer. You could get a better feel for your accommodations than any pictures offer and get a sense of the neighbourhood, city, and what's happening nearby. You could experience a "lite" version of your trip before leaving home. In addition, Marriot could include a bot to provide concierge service so you could set up your early arrival or luggage storage.
Experiment with Design & Prototypes
Furthermore, if you are Marriot, why not test out floor plans or concierge setups in the metaverse? You could do A/B testing and receive feedback before breaking ground on a new location. Aloft Hotels was the first to use the metaverse as a space for rapid prototyping, launching a hotel concept in Second Life in 2006 (You can find more info here).
Arrive Before You Leave
Another potential use case: imagine you are going on a golf trip with friends and want to plan the exact experience you'll have. In linked metaverses, imagine being able to play a digital hole on the two courses you are deciding between, with the environment mapped to what it would be like when you visited. For example, one course may be windier than planned, something you could read about, but instead, you would be experiencing it in a minigame. If you didn't like the experience on one course, you could select the other option, optimizing your experience before you even get on the road.
Taco Bell today
In 2020, Taco Bell spent $378 million on advertising. Let's assume that, similar to the other brands examined above; about one-third went to social media. The company has accounts across all social media platforms. In addition, Taco Bell has an online shop where enthusiasts can buy Taco Bell branded clothes. (Not quite the status symbol as the Fendi F or Gucci G, but hey, different social circles have different status symbols. That's the reason a McDonald's x Travis Scott sweatshirt sells for $155 (check it out here), and 7/11's x Crocs clogs sell for $110 (again, not joking, link here).) The company is known for having an exceedingly strong social media presence. Their account admins are very active, posting entertaining content frequently and replying to tweets often (some examples here). On top of that, they are highly interactive. Taco Bell enthusiasts were thrilled to learn of the return of the restaurant's Mexican Pizza, based on the tweets of their spokesperson Doja Cat, and a Change.Org petition with over 150,000 signatures.
Taco Bell's potential in the metaverse
Bring the Customer into the Kitchen
Taco Bell has already entered the metaverse with a somewhat gimmicky metaverse wedding contest. But if they had a metaverse platform, they could provide a very large amount of utility to customers and potential customers. Let's start off with the low-hanging fruit. Taco Bell can take customers through its sourcing and preparation process, shrugging off the perception that fast food is unsanitary and bad for consumers and the environment. They can create a new level of transparency that builds trust. On top of that, they can make their nutritional info easy to find and calculate through a bot, something that would appeal to anyone trying to eat healthier.
Remote Interactive Dining
A Taco Bell metaverse could offer some exciting social opportunities. For example, I grew up doing late-night fast food runs with one of my best friends, but we currently live on opposite sides of the country. Imagine if we both enter the Taco Bell metaverse, input our orders, and sit at a booth. As we do this, it triggers an actual food delivery from Taco Bell. My buddy and I are catching up in this digital social space, but we are also eating Taco Bell in real life as well. The opportunities for the metaverse to reconnect people are massive, and brands that play a part in this, like restaurants, should lean in and become a place for people to reconnect.
Allbirds today
The Venice, California, shoe brand masterfully leveraged social media to grow from a fledgling startup in 2016, to generating $1.7 billion in 2020, and being publicly listed in 2021. Their admins engaged with people who liked and commented on their posts, creating a significant following before launch. The company produced several funny videos, getting the word out that its shoes were comfortable and eco-friendly. Allbirds benefited from word-of-mouth marketing, with "ambassadors" creating social media content that appeared in various mediums.
The brand used social media to find people aligned with its value prop and then used that crowd to refine its products. In addition, the brand referenced specific social media requests when launching a new product and mined the feedback they received to make adjustments. You can find a deeper analysis (put together by Optimonk's Nikolett Lorincz) here. Still, all of this is to say that a startup can leverage current social media platforms to align its content with its vision and the goals of its users.
Allbirds' potential in the metaverse
Take Customers Behind the Scenes Allbirds is no longer a startup but lacks some of the inherent advantages of more longstanding brands like Nike. Especially in terms of owned IP. Allbirds started with casual sneakers and has expanded to several athletic offerings. I recently went into an Allbirds store and considered buying their running shoes, but ultimately I couldn't do it. You see, I have bad knees, and I couldn't understand how Allbirds produced an optimal running shoe compared to Nike or Addidas, with all of their sports know-how. Allbirds tested their product thoroughly, but that testing data was tucked away in a small drop-down on their website. Imagine an Allbirds metaverse and featuring a 3D model of the shoe, tied to videos and graphs explaining how Allbirds tested their product and why it works well. Obviously, you can do this with a simple video, but imagine what this could look like in a 3D medium. On top of that, imagine a gamified experience demonstrating the shoe's capabilities. For example, imagine a minigame where you had to have an avatar run a mile across different terrains in different shoes. The difference in speed and control of the avatar could help demonstrate the difference between Allbirds and competitors’ offerings.
Closing Thoughts
There are tools and features of a 3D internet that we can't fully imagine at this point. Still, hopefully, this exploration has made clear that the metaverse is not just another form of social media to gather hearts, likes, and comments. If you are a known brand with an inventory of your own IP, you are in a great position to leverage that in a metaverse that could excite your customer. If you are a startup, this new medium gives you an opportunity to prove why your product is worth your customer's time, commitment, and money. Traditional marketing strategies will continue to be options in the metaverse, but exciting, new creativity will play an unarguable and possibly transformative role.