Published: July 7, 2022
Author: Sam Huston
Similar to the early days of the Internet, brands are both eager and wary about developing their presence in the metaverse. Like any nascent technology, it can be difficult to know the right moment to jump into the fray.
I was recently joined by guest speaker, Forrester’s Mike Proulx, during META FESTIVAL for a (virtual) fireside chat about how brands, even if they’re not ready, should be thinking about the metaverse and their strategy. You can watch our entire conversation here. Afterwards, Mike joined us to answer some of the most important questions brands have on their minds right now.
Why is the metaverse so top of mind at the moment? How would you characterize the hype versus the reality? When do you expect the hype of the metaverse to intersect with consumer interest/excitement?
A: Hype versus reality is out of sync, and it’s largely driven by industry FOMO. Nearly three-quarters of US B2C marketers who Forrester surveyed indicated their intent to invest in “metaverse” activities in 2022. Yet only a third of consumers tell us they’re excited about the metaverse, and even less believe that it’ll be good for society. Media headlines tout any extended reality activation as the “metaverse,” which is only adding to the hype. What exists today are singular, immersive platforms — what we call “metaverse precursors.” Until there are standard protocols for interoperability across platforms, the metaverse doesn’t exist. It’ll unfold in stages over the next decade and beyond.
Which brands would gain the most right now from joining the metaverse, and which brands should avoid it right now?
A: Most B2C brands will gain valuable learnings, right now, by experimenting with extended reality (XR) activations — be they augmented, mixed, or virtual reality. The brands that are having the greatest success right now in the space are those that are creating a value exchange with XR and Web3 communities. It’s one of the reasons why so many fashion brands are jumping in. We do advise that, as brands test and learn at this nascent stage, they should temper both their expectations and investments.
How do brands build their metaverse strategy and identify measurable business objectives?
A: It all starts with asking and answering “Why?” What’s my objective as a brand, and how will the metaverse help our business in the long term? Is my target audience even using extended reality today, and to what degree? Choosing the right platform partner based on business objectives is also paramount. If a brand is looking for scale right now, there are only a handful of platforms that have mass reach. The audiences on each platform are also very different and greatly factor into the calculus of the brand’s metaverse strategy.
How will brands know that the metaverse has matured and is ready for wider brand adoption? How quickly does Forrester expert this to occur?
A: There are two parts to this: First, technology across the metaverse stack will continuously evolve. This includes things such as fidelity, devices, and UI but also the underlying infrastructure that will power the metaverse and create the pathways for interoperability. The real signal for brands, however, should be consumer behavior. Forrester believes that the metaverse has the potential to disrupt and transform customer experiences. Mass adoption of extended reality requires consumers, en masse, to see and understand how it benefits their day-to-day lives.
Can you talk about the types of customer experiences that could exist in the metaverse?
A: Forrester defines the metaverse as the 3D experience layer of the internet. Its inherent spatial nature is what makes it immersive. But it’s not simply just about virtual reality. There will be many ways to experience the metaverse. This includes the metaverse being present in the physical world through augmented reality and holographic projections. What this means is that the metaverse will be able to power hybrid customer experiences. It will likely impact how we shop, travel, learn, and play. And that’s just on the B2C side. Immersive tech through things like digital twinning is already having a material effect on manufacturing, medicine, etc.
How will interoperability between metaverse platforms be built, and what will/should happen with regulation?
A: For interoperability to happen, it will require, in part, cooperation among the key companies and platforms that are investing heavily in helping to build the metaverse. We’re seeing early signs of this with the likes of Microsoft, Meta, and Epic Games coming together to begin to develop a set of standards. But we’re in the VHS versus Betamax period right now. There will be lots of ways in, but it’s unclear which one (or combination thereof) will win out. Ultimately, the metaverse will require something akin to the W3C to steward the set of standards and practices.
Which platforms should brands be focused on to maximize value from budgets? How important is device ownership in this?
A: Platform selection must be based on an individual brand’s business objectives, both in the short and long term. For example, if a brand wants learnings with the “Web3” community, then they’d want to partner with blockchain-based immersive platforms such as Decentraland or The Sandbox. But as I mentioned earlier, these platforms have less than 500K monthly active users right now. If a brand is looking for immediate scale with a younger audience, then a platform like Roblox, which has close to 60 million daily active users, may be a better fit.
What are the big hurdles, and how should brands overcome those hurdles? And if they can’t, is the metaverse just a no-go for their brand?
A: The biggest hurdle in the short term for brands is discerning hype versus reality — resisting FOMO in favor of a pragmatic approach of testing and learning with metaverse precursor platforms. This requires setting and managing expectations on ROI — the lion’s share of which will come from key learnings that will inform future metaverse use cases. If the history of once nascent tech like the web, social media, and mobile are a tell, there will come a time when the metaverse becomes a valuable utility in society — one that will eventually be an important commerce channel for brands.
How are brands internal metaverse spaces having an impact on corporate culture in our hybrid, always connected world?
A: We’re living in an “anywhere work” environment. Metaverse-like technologies are already helping companies to better collaborate. Forrester believes that enterprise use cases will be the surprise onramp to early metaverse adoption, because everyday people (beyond today’s gamers and VR enthusiasts) are increasingly being exposed to immersive tech at work. This will drive reverse consumerization and help accelerate metaverse adoption at home.
My conversation with Mike was just one part of DEPT®’s 24-hour global META FESTIVAL, which featured thought leaders discussing the technology that will shape our future. You can check out recordings of the entire festival here.