Metaverse advertising offers a host of opportunities, and challenges
By Colin Campbell. Top image: Adobe stock
The metaverse is often portrayed as a mash-up of virtual shopping malls, entertainment hubs, and gaming arcades. Each of these real world places are heavily festooned with loud, colorful advertising. It's a fair bet that the companies currently funding metaverse development view advertising as a core component of their offering.
Likely, they are basing their models on a mixture of outdoor advertising (aka Out Of Home), search / social media ads, and in-game advertising, each of which are as different from one another as can be imagined, and yet each of which are pertinent to the ambitions of the metaverse's current framers.
It seems obvious that a metaverse denizen will have no problem virtually wandering around retail and entertainment environments, and encountering some version of outdoor advertising, such as billboards. We've seen these things in virtual spaces many times before, most particular in professional sports and driving games, where billboards are an acceptable element of the experience.
Likewise, we have become accustomed (begrudgingly, perhaps) to being served ads on social media and on Google that are ostensibly catered towards our interests. If you search Toyota on Google, or click on an ad for a car on Facebook, you can expect to see a lot of ads for cars in the weeks ahead.
But virtual worlds offer new creative opportunities. It remains to be seen if - say - birds flying around a metaverse sky painted like Coca-Cola bottles is something metaverse users will be willing to tolerate, even if they just used an metaverse chat app to mention that they're "feeling a bit thirsty IRL".
This is where in-game advertising becomes relevant. Game companies have learned a lot about the challenges of balancing the lure of advertising revenues, with the natural resistance of the user to being fed commercial messages.
Pros and cons of in-game advertising
In-game advertising has a patchy history, for sure. Once touted as a potential bonanza, it has generally under-delivered financially. Product placement and advertising in games can feel jarring and misplaced, as was the notorious case of the post-apocalyptic classic Death Stranding, in which Monster Energy drinks were placed to ludicrous effect.
As I wrote at the time in Polygon: "Death Stranding is a stark, post-apocalypse of muted tones carefully arranged around a naturally understated palette. In the midst of all this mournful loveliness, there sits an anomaly: garishly designed cans of a 21st century drink called Monster Energy”.
The user's experience was marred, and the game's reputation suffered. Although the details of the deal have not been released, the revenue gains must have been marginal, given that the game sold more than five million units. A later Director's Cut of the game removed all product placement.
Death Stranding (2019) [Sony]
The effectiveness of in-game advertising has been tested many times, but results are still inconclusive. Outside the peculiarities of the mobile games market, most games, most of the time, do not make use of in-game advertising.
Innovative in-game branding
Yet game companies have found innovative ways to bring brands into the fold of their gaming worlds, without upending the user-experience. At the height of Fortnite's popularity, in 2018, publisher Epic Games worked with Marvel to promote the movie Avengers: Infinity War. The movie's villain, Thanos, was introduced as a character in the game, along with his fearsome Infinity Gauntlet weapon, thereby incorporating a commercial message into the players' core experience.
Speaking to Entertainment Weekly at the time, Epic's worldwide creative director Donald Mustard said: "It was really important that whatever we did, it had to be super authentic to both Fortnite and Avengers: Infinity War, and something that fans of both would be excited about”.
During the 2020 U.S. presidential election, then-candidate Joe Biden turned an Animal Crossing island into a campaign office, featuring various slogans and Biden quotes. Christian Tom, director of digital partnerships for the Biden campaign, said at the time:
"This is one way we are finding new creative and innovative ways to meet voters where they are and bring our supporters together".
Metaverse marketers are likely to cleave to these kinds of fun, interactive experiences that engage users, without making them feel like they're being sold a message. To put it another way, in a highly competitive interactive environment, only the best experiences will survive.
Another option is reward advertising, which is currently a common form of marketing in mobile gaming - users are given in-game prizes or currency if they sit through a video commercial.
A 2019 DeltaDNA survey on mobile game advertising found that 94% of free-to-play publishers and developers use some form of in-game advertising in their games, with rewarded videos the most popular format, used by 82% of respondents. However, the fact that this is particular to mobile platforms suggests the possibility that it's only an option in future mobile metaverse iterations.
Finally, marketers can attempt to create a metaverse version of an adver-game - a complete interactive experience built around a brand. The drawback here is that it's a risky and expensive exercise. For most marketers, game creation is an unfamiliar area of creative expertise.
Metaverse growth and opportunities
In-game advertising company Frameplay makes the point that gaming - and by extension the game-heavy metaverse - is an enormous and expanding market. The company's latest promotional video - which also demonstrates how in-game advertising works - states that 64% of adults in the US play video games, and that 2.7 billion people play video games globally for an average of 6 hours and 20 minutes a week.
According to a report from Dataintelo, the global in-game advertising market size was valued at $5.2 billion in 2018 and is expected to reach $14.6 billion by 2030. Brands are alert to the coming of the metaverse, and are certainly aware that it's going to be a sharp learning curve.
As Isabel Perry, Director of Technology at digital marketing agency Byte recently noted:
“Metaverses are jam-packed with innovative marketing potential; from live shopping to virtual stores, fashion shows, product launches, content production, live flagship events, enhanced social, pimping-up of Zoom calls and NFTs paving the way for real economies. The possibilities that this hybrid digital and physical world offers are near-endless. It’s time for forward-thinking brands to get involved.”
In his book, The Metaverse, Matthew Ball writes:
"By the end of the decade, we’ll agree the Metaverse has arrived and it will be worth many trillions. The question of exactly when it started and how much revenue it generates will remain uncertain".
Ball's book also makes the point that many young consumers already inhabit metaverse-like environments such as the game-world Roblox, where brands are finding ways to engage audiences, and it's here that the first shoots of metaverse marketing are to be found.
NASCAR recently launched a playable version of its newest race car via the Roblox car-chase game Jailbreak. Players can choose to drive the car, and can paint it using a variety of customized designs.
Nick Rend, managing director for gaming and esports at NASCAR, recently wrote:
"The community makes this platform incredible, and it is essential for us to show up authentically. Growth comes from how users interact with, interpret, and incorporate your brand as part of their virtual escapades”.
Metaverse marketers have a sharp learning curve ahead. But gaming offers winning examples of branding partnerships that entertain and engage consumers. If implemented effectively, rather than disrupting the UX, in-game advertising enhances the gameplay, and as we move into the metaverse, intrinsic virtual ads bring more opportunities for targeting and personalizing content for each user.
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