The Metaverse - Did It Live Up to the Hype in 2022?

 

In 2022, the Metaverse captured the imagination of both people and brands with projects being launched across just about every industry vertical. But ten years from now, how will people think about metaverse technology?

 

To understand that I think we should forget about the trends from this year. One year is just a blip in the grand scheme of things. Instead, just look back over the past decade and you’ll quickly see that digital experiences and consumer engagement continue to move in the direction of greater immersiveness and greater recognition of people as individuals. Metaverse, while still far from mature, is a natural evolution in this macro trend.

 

So the question is, how has metaverse furthered that trend in 2022:

 

So while 2022 is definitely not the year that metaverse became profitable for all, I believe it will be remembered as the year where the future brand experience leaders took some of their first steps. I believe what you’ve seen this year is an investment in the learnings that will drive significant business growth and customer engagement tomorrow.

 

The human brain is wired to be distrustful of new ideas. They make us feel uncertain of things that we were previously sure of. They cause a biochemical change in the brain that makes us want to run away from them. It’s an evolutionary defence mechanism called neophobia. It’s why people are more comfortable with being cynical. Cynicism is our brain’s safety blanket. But cynics create nothing new. They are really just saying, “Please don’t change things, change makes me nervous.” 

 

When the metaverse burst into the global consciousness in 2022, it challenged everything you thought you understood about immersive human connection. It quite literally freaked everyone out. You instantly became an adopter or a rejecter, depending on your ability to engage with new ideas. Now, you can choose to run away to safety, or you can decide to walk towards it and see what happens. 

 

Viewed with an open mind, the potential for web3 is uncharted. And I salute all the pioneers who have dived in to explore. We all owe them a debt of gratitude. Everyone will learn from their experiences. 

 

Without doubt, the hype is justified. It may perhaps be a little premature, but there can be no doubt that MR and VR will open up previously unimagined opportunities for brands to connect with new audiences. And as glasses move on from expensive bricks held in place with industrial bra straps (in the same way that early mobiles transformed into the iPhone) and become commonplace, a new and thrilling creative playground will open up. 

 

Web3 is here to stay. And in the blink of an eye, we’ll all forget what life was like before it. Even the cynics amongst you.

 

2022 sparked incredible innovation across the metaverse and web3 ecosystem. We've seen phenomenal brand activations pave the way for an entirely new marketing category. But the ecosystem is in the early stages of growth, requiring development for years to come to fulfil the vision of the metaverse and move beyond the macroeconomic downturn currently impacting crypto. 

 

At the same time, we're seeing some of the largest brands in the world forging ahead, innovating, and shining a light on the undeniable advantages of web3 and metaverse-enabling technologies. From new forms of social entertainment on gaming platforms to digital-only apparel and interoperable avatars, brands will continue to explore how emerging virtual spaces can help future-proof their business and cultivate new product categories. This in turn will inspire continued growth and evolution in 2023.

 

What meaningful progress has really been made? Not to be annoying, but it really depends on what we mean when we say “meaningful progress.”

Truthfully, the ubiquitous adaptation of web3 by the average normie somewhere in Idaho is probably a few years out. HOWEVER, that theoretical normie somewhere in Idaho has now heard the term (thanks, Zuck!), and has a baseline knowledge of what it means, even if they don’t understand all the ins and outs quite yet. This year’s developments REALLY set up the space to expand rapidly in the near future, as more and more web3 infrastructure is implemented across the digital landscape.

But it’s not just about infrastructure. Experiences are uber-important in the metaverse, and as more and more brands and entertainment properties create unique experiences in the space that demonstrate the promise of web3, more and more consumers will dip their toes in and discover its utility. This will prove especially true with augmented reality in the short term, as the virtual reality space still needs another decade or so before it’s fully ready for prime time.

Web3 is certainly not a novelty, and brands/studios/whoever should continue to invest in the space in the years ahead. But with that being said, it’s ALSO not a universally understood or adapted platform as of today, so if you’re GONNA invest there, you should make sure you know who you’re talking to and what you’re trying to accomplish (unless burning money is, like, a kink of yours; I’m not here to yuck any yums!).

When mobile phones were first introduced, their value was clear from the get-go: I can connect with anyone at any time. What problem is the metaverse solving? It’s not clear to me yet — and that is the metaverse’s greatest challenge: answering its intrinsic value to society. 

I may be the outlier here, but I am of the belief that the relevance of the metaverse, in its current state, is limited to a select few brands. The “first-in” approach makes sense for some household names like Nike, which has a broad-enough adoption across the world to experiment and play. Just look at “.Swoosh,” their digital, blockchain-powered platform for athletes, collectors, creators, and consumers.

Meanwhile, most organisations have not fully optimised their existing channels of communication, so they are better off refining their engagements outside of the metaverse. Web3 poses the most interesting and impactful ways for brands to do so. They can leverage an endless supply of older and dormant IP and infuse them into new digital content. There’s a deeper level of shared ownership in what you’re creating and, through blockchain, you can track how that IP is optimised across channels. That opens up a whole other segment or world of opportunity when it comes to the distribution of ownership, which is exciting.

Even for brands that do have a viable entry point into the metaverse, it’s still a massive spend that requires consistent tech resources and oversight to keep consumers in the virtual worlds they create. 

Given we have been in an extended crypto bear market, 2022 has been the time for building and testing. This year we have seen many brands dipping their toes into the metaverse for the first time. From fast-food chains to fashion houses, it appears many have joined to be in on the trend, rather than establishing how a presence in such spaces can be integrated into long-term business strategies. 

Platforms, such as Roblox, unarguably have huge reach and are the closest thing we have to the metaverse currently - but they are less web3, more web2.5. As we move into 2023 we will see more aesthetically pleasing and hyper-realistic spaces coming to the forefront, providing brands with better locations to connect with customers. Simultaneously, as consumers awaken to the power of their data the true winners will be brands that utilise web3 to shift away from traditional loyalty schemes and data collection methods, to blockchain programmes that transfer the ownership of data back to the customer. Could this speed up the end of third-party cookies and provide consumers with the freedom to trade and benefit from their data?

Brands need to realise that the time is now, as whilst they have been experimenting and exploring, real consumers have been uniting in the web3 world and forging strong communities. In 2023 businesses need to be conscious of a web3 culture and society that not only exists but is also expanding.

 

 

For the brands engaging in the metaverse, 2022 was a year of learning how to create authentic experiences. While authenticity led to relatively high levels of engagement for many, we also witnessed examples of inauthentic experiences that rapidly fell flat with consumers. Those that made meaningful progress recognized the importance of leaning into the community’s creator culture while delivering on the opportunity for these users to experience their brands in immersive ways.

 

Success in metaverse activations is relative, because in 2022, the space is still emerging. When you have success, will it dramatically impact the business now? No. But, will it position you to be prepared for the future? Absolutely. We believe web3 will grow in mass appeal as challenges like usability and interoperability are addressed by the underlying tech platforms.

 

From our first execution of Samsung’s 837X in January, we’ve been applying our lessons learned throughout the year to other metaverse projects with clients like Grey Goose and Patròn. While the metaverse is still a niche space, learning and understanding what creates an effective immersive experience can provide substantial value – as we’re already seeing these immersive experiences impacting brand metrics in meaningful ways.

 

 

 

At the end of 2022 the world is still as foggy about what the metaverse actually is. There’s lots of buzzwords, lots of ideas and lots of blur with other technologies like web3. If you think of the metaverse as a way to experience the internet with a VR or AR device, then 2022 saw more small steps towards mass adoption. Devices like Meta Quest Pro and Magic Leap 2 are improving the experience and giving us a glimpse of how and why people will use this technology. But we’re still years away from these devices being small enough, and affordable enough, for most people to take notice.

If you define the metaverse in broader terms, for example as a set of immersive experiences where people spend time, have fun and express themselves, then 2022 was a great year for the metaverse. Nearly 60 million people use Roblox daily, up 23% since 2021. They’re spending more time there, spending money there, and finding increasingly creative things to do. What the metaverse will become and how we’ll use it day-to-day is impossible to predict but beyond the hype and corporate bluster, there are interesting signs of its future on show already.

In many ways, our own creative ambition is running far ahead of what is still technically possible. Every other week, we have clients approaching us with ideas that, on paper, are amazing experiences — but the tech is just not there yet to live up to them, even with multi-billion dollar investments from the world's leading tech companies behind it. The promise of a socially-driven virtual space still exists, which is why there’s such a massive push. 

2022 held some good experiments as brands dipped their toes in, bringing light experiences to various platforms that gave their communities something to play with. There’s power in a shared world that can exist across devices, but it’s currently an investment that only forward-thinking brands are making. 

The interesting challenge I see is that the metaverse is already fundamentally fragmented among all the different companies building their own platforms: Meta, Roblox, Niantic, and Epic Games, to name a few. Each has their own metaverses for their communities to invest their time and money in. So, when brands approach one platform, they’re only tapping into a narrow slice of the metaverse pie. That begs the question, as we’re building the foundation of what the metaverse will become, is there a way for brands to publish experiences across multiple metaverse platforms? 

You solve that, and you extend the reach brands have, which will entice more investment into bigger, richer experiences that will, genuinely, push the true promise of the metaverse forward.

My mother is not what you would call an early adopter. So when she asked me to help her get “Netflex” [sic], I knew Netflix had not just reached every age group and demographic, but also appealed to an incredibly wide base of customers like few brands do. This year we were invited to the metaverse, most notably in a 2022 Super Bowl ad designed to capture our imaginations and start a revolution, but what actually manifested from this campaign is even more people wondering what value would be found if we actually put on our goggles. Adoption has been slow. 

 

I have no doubt brands will end up in the metaverse, but will it just be out of FOMO or deep, strategic planning? Will we be looking at just another platform or a revolutionary one? That all remains to be seen. What we do know is we’re weeks away from another Super Bowl destined to deliver another big clue. Somebody’s going to have to take the place of all the crypto ads that won’t be running and I’m hoping for a metaverse ad that makes my mother ask me for a set of goggles for her birthday.

 

 

2022, is not the year of the metaverse, rather the year we understood the idea of the metaverse.

Neal Stephenson’s 1992 concept is now part of our lexicon as we talk about the future of

advertising, retail, games, education, fashion and more.

The ideas have been developed further, so this potentially huge change - an internet in three dimensions - is no longer alien to us and we can begin to define what it will look like and debate how it might work.

We have seen practical tools being developed and the creation of ‘mini-metaverses’ - singular virtual worlds on the internet you can explore but aren’t yet interoperable with one another. We have seen the creation of metaverse brands and startups. We have also seen technology companies and agencies make large investments in this space, training or buying in new talent, and launching experiments and prototypes. Much of 2022 has been about that magical PR moment of “we were here first” or “look, we’re here too”.

We are preparing ourselves for the shift. Understanding that digital assets and ownership can garner as much importance in the virtual world as they do in the physical. When it becomes truly part of our zeitgeist will depend on the speed technology develops; 5G, AI (we’ll see 3D worlds created like DALL·E creates images) and the graphical power of the computers we carry in our pockets and will carry on our heads. How we shape it though, is up to us now. Is it owned by everyone, is it owned by one or two all powerful organisations? Is it a diverse place where everyone wants to be, or a place for the privileged few? A MacKinsey report from November 2022 takes the view that “Both the entrepreneurial capital and the CEO roles in the metaverse space remain disproportionately reserved for men” (Mina Alaghband and Lareina Yee).

In 2023 we’ll see more creator tools becoming available, such as Creator 2.0 for Fortnite. The streamlining of UX and onboarding, so those new to the metaverse can join easily and quickly get into the action. Also a sharp increase in third party supporting tools that are interoperable between ecosystems, like Ready Player Me already does for avatars.

We are at the dawn of the metaverse. A time to experiment, explore, prototype, debate and define. Can it live up to the hype? Now we know what it means, let’s find out what it can be.

 

Did the metaverse live up to the hype in 2022? Well, Google Trends tells us the hype peaked in Q1; there was a flurry of activity driven by the Facebook rebrand and the preceding media and price peaks in crypto and NFTs. And while these peaking trends appear to have plateaued since then, in adland, we have experienced consistent interest from brands throughout the year.

 

Today, the term metaverse remains ambiguous for many, but there has been meaningful progress in the last 12 months. It is clear that technology is a key enabler of metaverse experiences - we have seen significant advances in AI, Blockchain, NFTs, digital worlds and digital identity in particular this year. And although each technology has a different function and level of maturation, they have helped see the creation of new commercial models, loyalty mechanisms, methods for engagement, and opportunities for brands.

 

We can see the most meaningful progress in contexts where brands have combined an emerging technology, a clear customer value proposition, and creativity, to create a memorable experience that could only be possible in the metaverse.

 

RTFKT is a good example. Their innovative mix of NFTs, 3D design, physical product, and partnerships create a well-rounded (and fun) consumer experience journey comprised of a story and a community. Additionally, Reddit recently initiated millions of users to NFTs when the platform launched their first large scale limited edition NFT avatar project: users didn’t even need to know or care about NFTs themselves, all they wanted was to be a part of something exclusive. 

 

Now, the media has moved on, crypto prices are down, and we’re in a bear market with macroeconomic headwinds. It may sound bleak, but this phase provides opportunities to upskill and build and find the spaces to connect brands with people through new and exciting experiences.