What Does Marketing Look Like in the Metaverse?

Tim Cross 28 May, 2020 

The success of ‘Fortnite’, one of the world’s most popular video games, is notable not just because of the huge number of players it has attracted (it now claims over 350 million registered users), but also because of how the platform is evolving beyond its roots as a competitive shooter, into a social space where people go to hang out with their friends.

Live events in Fortnite have enabled them to pull in huge audiences, and generate huge publicity, for live concerts featuring artists Marshmello and Travis Scott. More than 12 million users tuned in for the latter. And earlier this year Epic Games, Fortnite’s developer, released a new non-violent ‘Party Royale’ mode, geared towards social interaction rather than competition.

Many believe Epic Games is building a ‘metaverse’ – a persistent, shared virtual world, based around social experiences and interactions rather than competitive gaming.

The concept isn’t a new one – with the term ‘metaverse’ credited to 1992 sci-fi novel Snow Crash. And Fortnite isn’t the first game to bear the hallmarks of a metaverse. Second Life, an online game released in 2003, let users live out ‘second lives’ in a virtual world. More recently, games like Minecraft, Roblox and VRChat have become popular spaces for virtual social interactions.

As users migrate to these virtual worlds, brands are quickly following, capitalising on the high user engagement and new possibilities enabled within these games.

By the traditional definition, none of these are true metaverses. Many aren’t persistent (servers disappear after a period of time), and are limited in the number of people that can interact in the same space at any one time.

But the early examples of marketing and advertising we’ve seen in these games hints at what metaverse marketing could look like further down the line.

From product placement to TV-like ads

Dave Morgan, CEO of Simulmedia, an advanced TV advertising tech company which has begun working in the gaming space, said it’s inevitable that brands will play a significant role in metaverse. “I think there’s no question that we’ll see more commercial communication as part of the gaming experience,” he said. “There’s so much growth, audiences are massive, and gamer’s wallets are limited to pay for all the games they want to play, plus there’s a willingness from advertisers.”

Those VAN spoke with highlighted four different categories of marketing we’ll likely see in metaverse environments.

The first is in-game products and items. These may be virtual recreations of real-world items (like a can of Monster Energy in action game ‘Death Stranding’) or branded items which promote a real-world product (like the ‘John Wick’ character model released in Fortnite, used to promote the film of the same name).

Many games already monetise by selling in-game products and character skins, and in fact these items tend to be seen as desirable, meaning users actively want them (users could pay for the John Wick skin in Fortnite, for example).

James Stedman, creative director Level99, an esports marketing agency, said that where these products fit naturally into the virtual world, there tends to be a large appetite for them from players.

“Look at something like (basketball simulator) NBA 2K. It’s so tied to sports, you want it to feel authentic and real,” he said. “So right off the bat when it’s released, you can get every single Air Jordan that’s been released in-game. And when new sneakers from LeBron or James Harden come out, they get added into the game. There are tonnes of brands, it’s a big part of the game, and an inherent part of that culture.”

Metaverses will likely be less constrained by being tied to a specific theme or genre than traditional video games, allowing for a wider range of product integrations. It’s easy to tie in Air Jordans to a basketball game, but harder to seamlessly integrate a brand like Burger King. In an open-world metaverse, both of these would be fairly easy to integrate.

The main issue is technical integration, since product placements are fairly unique. But solutions are emerging to standardise the process – Level99, a creative agency focused on the gaming sector, just earlier this week showcased product placement for Unreal Engine, a game engine owned by Epic Games which is used by a number of third-party developers.

The second category approaches the metaverse in a way that wouldn’t look out of place in the real world, taking spaces where ads would appear in the real world, and placing them in their virtual counterparts.

Bidstack, a video game ad tech company, is an interesting example. Bidstack started off working in real-world outdoor advertising, but has now transferred that tech over to the virtual world. Bidstack places ads on virtual billboards and advertising hoards in virtual stadiums.

More spaces will emerge as metaverses become fleshed out. Fortnite recently announced it will screen a Christopher Nolan film in-game this summer. If this proves popular, it’s easy to imagine a future where trailers and ads are run before film screenings in virtual cinemas, in the same way they would in the real world.

Again, it’s important that marketing integrations are unobtrusive and feel natural to the user and the environment, appearing only in places where users are used to seeing ads. And they tend to be more scalable. Bidstack for example sells ads programmatically, as its tech is able to automatically fit creatives into virtual placements, and adapt them to make them fit naturally within the game environment (for example, by adding weather effects).

While these solutions take advantage of the metaverse’s similarities to the real world, the third category, experiential and events marketing, exploit its differences.

A good example is Marvel’s integration with Fortnite last year. This partnership saw Thanos, a character from Marvels ‘Avengers’ film series, turn up as a playable character within Fortnite. Thanos was integrated into a specially designed game mode, and given a unique set of abilities within the game.

These sorts of tailored events and experiences inherently take a lot of work, and aren’t particularly scalable. If a game like Fortnite introduces a new mode once or twice a year designed around a specific brand, it’s a fun novelty. More often than that, it might start to become tiresome for users.

Level99’s Stedman said the results of these sorts of integrations can justify the high effort. “If a brand gets it right, there is an audience that will actively participate in your execution,” he said. “It’s the same with experiential – if you put on something that people enjoy and are entertained by, it’s going to be a success. And the gaming space allows for a lot more of those things, and there’s less to lose – you’re not going to have to go out to a specific place at a specific time.”

But Matt Cannon, COO at Venatus, an advertising platform which specialises in gaming, said that for the moment at least, these sorts of activations might only work for a limited number of brands.

“These events have been appropriated by musicians and movie makers alike to raise awareness, but where else is one seeing this form of marketing?” said Cannon. Events based around popular musicians and films can prove popular – would an event based around a brand like Visa work as well?

The final category of metaverse advertising wouldn’t actually take place within the virtual world at all, but instead during breaks from the games, running as full-screen video or display ads, similar to what are commonly used in mobile gaming today, often giving users in-game rewards in exchange for their attention.

Simulmedia’s Dave Morgan said the advantage of these types of ads is that they would fit much more easily into most brands’ media plans, using creative formats and measurement standards that brands are familiar with.

“For advertising to scale, it will have to fit into some of the core ways advertising is done in other channels,” he said. “Yes, we’ll see ads as part of in-game environments – on the walls of stadiums or on jerseys in games. But that will have a limited scalability. You can build technology to deliver it faster and count it better, but there are limits.”

Morgan envisions a future of full-screen, TV like ads which are shown either before a user jumps into the metaverse, or during breaks in play. If these ads can be bought and measured in the same way as TV ads, they could be an easy add-on for TV advertisers looking to reach younger audiences.

“That makes the shifts of TV budgets frictionless,” said Morgan. “It may not be the sexiest thing, but boy is it an efficient way for this sector to capitalise on what I believe is a $20-25 billion opportunity in console and PC-based gaming. I think solving measurement is critical, and solving it with a respectable, panel-based TV partner is the most frictionless way to do that.”

Still hurdles to overcome

The metaverse will open up a lot of exciting opportunities for brands, but there will undoubtedly be challenges to navigate along the way.

Firstly, Venatus’s Matt Cannon said that brands should not yet be swept up by the hype generated by Fortnite. While we’ve seen some interesting events and brand integrations run through the game, we’ll need to see advances in technology and higher player counts before metaverse marketing reaches its full potential.

“The metaverse conjures up images of Ready Player One [a recent movie set in a VR environment] with Magic Leap style augmented reality, but unfortunately we are a long way from these types of immersive experiences in games,” he said.

And while Fortnite has built up a huge engaged playerbase for its own in-game universe, this is far from the norm. “The driver for the metaverse to blossom into a true environment for ads is adoption and reach,” said Cannon. “The game, tech or platform needs to hit a critical mass for there to be the epiphany that this “place” could be relevant and engaging for an advertiser.  All credit to Epic for beginning to forge this path, but let’s hope other games and platforms continue to innovate.”

Brands also have to tread carefully when marketing in the metaverse, to avoid riling up players with overly-blunt messaging. While some brand activations can work seamlessly and feel natural, badly planned placements feel overly intrusive and leave players feeling disgruntled.

Andreja Mahovic, Level99’s co-founder, said it’s important for brands to take time to understand a game and its community before diving in, which inherently creates a barrier to metaverse marketing.

“Simple, subtle integrations will work better,” he said. “Travis Scott worked because he was already popular. For most brands it’s important to not be over the top. Don’t talk about what you’re selling straight away, talk with the community about what they need. After you’ve done that, then you can talk about your messaging.”

And finally a metaverse, more than most other gaming environments, will come with a string of brand safety concerns. The more control a metaverse hands to its users to create and shape their environments and to interact with other users, the more risk there is that a brand activation will appear next to questionable content.

“The metaverse is still in its infancy and there are a myriad of challenges to overcome before brands feel comfortable diving in,” said Venatus’s Cannon. “Do you have a robust and brand safe environment or is your world open?  Could your super cool metaverse brand launch descend into a virtual riot?”

Brands are likely to feel more comfortable controlled environments which place more restrictions on what users can and can’t do. But Simulmedia’s Dave Morgan said with time, advertisers may need to reconsider how they think about brand safety in the metaverse.

The metaverse will, if it takes off, be something of an extension to the real world; a place where people can interact with friends and strangers in ways they can’t in real life. Thus, just like real life, it will be unpredictable. If you buy a billboard in real life, there’s always a risk someone will spray offensive graffiti on it. These same risks carry over to the metaverse.

“Advertising will not be one-size fits all,” said Morgan. “So for advertisers wanting to use games as extensions of TV campaigns, those will be biased towards parts of the environment where there’s a bit more predictability. But I think there’s a recognition among advertisers that life is a little messy.”

“Games are becoming an extension of people’s real lives,” said Morgan, “and if brands want to be part of that, they need to accept that it’s going to be a little messy.”

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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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