Digital Craft in association withAdobe Firefly

“We May Not Have Jet Packs But We’re Off the Ground”: The Electric Factory on How Brands Should Enter the Metaverse

Advertising & Integrated Production
Montevideo, Uruguay
The creative innovation company’s ECD, Danny Paul, and MD, Camila Romero, speak to LBB’s Ben Conway about what brands should look for and avoid in a web3 world

(Image: An inside look at 'The Gray Man' maze in Decentraland built by The Electric Factory) 

2022 promised to be the launchpad for this new generation of online opportunities in the metaverse. However, as we learnt from some of our tech-savvy members at the end of last year, the boundless possibilities of web3, blockchain, crypto and everything underneath the ‘metaverse’ umbrella have still not been realised by the majority of brands and marketers.

The Electric Factory is a globally-awarded creative innovation company, with offices in North and South America. Founded in 1999, The Electric Factory’s team of innovators focuses on generating ideas that breed success through strategic thinking, creative design and technology. They do this for clients across the globe, including Meta, Walmart and Riot Games. As experts in the emerging web3 tech, LBB’s Ben Conway decided to have a chat with them about what brands need to know before entering the metaverse, and to ask them about what advertisers can expect when they step foot among the variety of “betaverses” that are at their fingertips in 2023.

As well as discussing 2022’s metaverse marketing successes (including Snoop Dogg and Samsung’s ventures into The Sandbox, Decentraland, Roblox and more), The Electric Factory’s executive creative director Danny Paul, and managing director, Camila Romero tell Ben how brands can develop a long-term strategy for web3 integration, despite potential economic hardship in the coming year. The pair also reveal why simply re-creating your physical identity as a digital one is a foolish effort, how being nimble and persistent is key to success, and why viewing the metaverse as a single entity is the first mistake people make.

LBB> The metaverse was certainly one of the big talking points in 2022 - what does the ‘metaverse’ mean to you? Has it lived up to expectations in the ad industry?

Danny and Camila> Well, we were promised jetpacks… Obviously, the metaverse has generated a lot of buzz in the ad industry in recent years, and for good reason. But with new platforms emerging every day, it can be difficult for brands to get a handle on what the metaverse is - much less, keep up with the pace of all the tech. 

Simple answer: the metaverse is an immersive, digital space that multiple users can experience at the same time.

Better answer: the metaverse is the future of the internet. Strap in!

According to Gartner’s 2023 ‘Hype Cycle for Emerging Tech’, the metaverse is still in its early stages, a time when innovation and expectations are more volatile. This is the period when the world is still defining its relationship to a new technology. For brands, it is an opportunity to experiment with this new frontier, exploring its multiple platforms, engaging with new audiences, and uncovering the immense potential inherent in this new method of engagement. 

We focus on helping brands approach this with a strategic mindset, collaborating on initiatives that not only embrace how the metaverse can benefit them right now, but also generate valuable insights that will be relevant in the near future. We have seen that by taking controlled risks, brands can ensure they are maximising the benefits of the metaverse and positioning themselves for success in this rapidly evolving ecosystem.

So, we may not have gotten jetpacks, but we are clearly off the ground.

LBB> What attracts brands to the metaverse? What are the key benefits to developing a presence in the metaverse/web3 realms? 

Danny and Camila> We live in the age of digital disruption, a time when brands really want to be ahead of the curve, reaching people not just where they are but where they will be. Currently, for the most part, we see two types of brands in this space. First, are brands who are trying to build a lasting presence. Second, are brands who want people to see their presence. It’s the difference between long-term and short-term vision, between PR and R&D, novelty and innovation.

There’s nothing inherently wrong with either approach. If done thoughtfully, both can help to build a foundation. The main difference comes down to the benefits. Brands that are building a lasting presence treat their metaverse initiatives more like an R&D effort, where learnings and insights are as important KPIs as immediate returns. Brands that focus more on PR are driven by very different performance indicators, such as reach, frequency, views, attendees, among many other ‘vanity metrics’.

Both types of initiatives are crucial to gather their own data and build the company's knowledge base and IP within the metaverse and the foundational technologies that underpin it. However, we truly believe that brands that are taking the time to understand and activate small steps to learn, refine, and hone their initiatives have the potential to to not only be seen, but to lead the space in the near future. 

As the future of the internet, the metaverse will eventually become the dominant way that we interact digitally, both with each other and with information. The brands with the most knowledge and experience will have a distinct advantage.

LBB> What have been some of the more successful metaverse projects in the industry that you admire?

Danny and Camila> More than projects, we admire presence. Two brands that have really caught our attention are Samsung and Snoop Dogg. Both have taken a strategic and calculated approach to building their brands in the metaverse. 

Samsung has been activating metaverse efforts across multiple platforms, engaging with different audiences in innovative ways. In June, the brand released the ‘Samsung Superstar Galaxy’ on Roblox, an activation where users could interact with a digital version of Charli XCX, perform on stage with friends, and customise their look and stage props to perfect their own pop star persona. Samsung also created a presence in Decentraland, known as ‘Samsung 837X’, which is a representation of its NYC retail location. Embracing the possibilities of the metaverse, the space has already changed multiple times to introduce new products, initiatives, and experiments. Decentraland users have collected unique NFTs, earned badges through gamified experiences, and scored wearables, a big favourite in the community. It also serves as a space for anyone to attend product launches and virtual events.

Similarly, Snoop Dogg has made significant efforts to establish his own presence in the metaverse. It all started with ‘Snoopverse’ in The Sandbox [a community-driven video game that uses blockchain elements] in 2022. Users can explore Snoop’s mansion, collect NFTs and watch exclusive in-world concerts; he even ‘shot’ a music video in his own virtual world. Add an MTV performance with Eminem that was ‘metaversed’, and the cross-over between worlds is firmly established. He is not just experimenting in the metaverse, he is bringing the metaverse out into his world IRL, making it a part of his primary brand.  

These brands (or celebrities) are laying the foundation for future marketing and intellectual property initiatives by understanding the capabilities needed to become relevant in these emerging virtual spaces. They are not only engaging with communities on different platforms, but also gathering valuable data from user behaviour across these platforms - invaluable information for any brand activation strategy.

LBB> What’s your experience of working with brands in the metaverse and what key lessons did you learn?

Danny and Camila> We've helped a lot of businesses navigate the metaverse, and we honestly learn something new from every initiative. The phrase ‘building the plane while flying it’ comes to mind. As a creative innovation company, we've become very familiar with the challenges of working in unfamiliar territory. The rules of engagement, audience expectations, or even technical specifications of emerging platforms and technologies are subject to change without warning.

We’ve built wearables for a consumer-packaged-goods (CPG) brand, only to rebuild them after a decentralised autonomous organisation changed what wearables could be across the platform. We’ve turned a PR partnership into an interoperable web3 presence for a retail brand. And we’ve changed the 3D program we build in… twice.

Yes, the metaverse presents a world of possibilities, but those possibilities need to be informed by a constantly evolving strategic and technical understanding of the platform and community. Transparency and collaboration are of paramount importance navigating the shifting landscape. Because the workflow for these builds is something entirely new for brands, we utilise a clearly defined system to bring order to chaos, process to possibility, and vision to reality. Beginning with a strategic understanding of the brand’s goals, we identify the most appropriate metaverse platform(s), develop experience narratives, structured feature sets and feasibility checks - and after all that, we start building. It turns out, magic takes a lot of preparation. 

(Landing page for Netflix's 'The Gray Man' Metaverse Mission in Decentraland, created by The Electric Factory)

LBB> What are some common mistakes that brands and agencies often make when trying to enter the metaverse? How can brands avoid these?

Danny and Camila> It’s tempting to try out one initiative and then declare victory or defeat, as if a brand’s digital presence were something static. What the metaverse is changes every day and brands need to be willing to change and grow with it. Brands should have a long term commitment, but a variable strategy. What works today may not work tomorrow, but stay in the game! Imagine if Nike was still using its first Flash website right now…

Another mistake is to consider the metaverse as a single entity or one thing. Right now, it is a collection of spaces and technologies that embrace the concept that digital engagement of all kinds will be immersive and co-inhabited by multiple users at the same time. But to say that Roblox, Decentraland, Zepeto, and Spatial should be treated the same does not consider the technologies and communities which define them. Until interoperability becomes a common function in immersive tech (and that may take a while) we will be working in multiple ‘betaverses’, which will ebb and flow, each offering their own unique benefits. Brands should consider their own knowledge, communities, and IP the persistent objects, not the specific platforms as of yet.

LBB> Is every brand suited towards the metaverse? 

Danny and Camila> Every brand will have a place in the metaverse; however, it is fair to say that brands that have experimentation and transformation as part of their DNA will probably have an easier time of it at first. Brands that have a strong identity will find it easier to flex into this new digital world because their core identity will guide their usage. 

LBB> Can any brand blend physical and digital successfully?

Danny and Camila> ‘New space’ does not mean ‘new brand’. The metaverse will change what brands are and ultimately help them grow in new ways, but if the strategic vision which guides them is strong, the difference between the physical and digital is not as large as it may seem.

It is not that different than it is with people. Gen Z, who don't distinguish digital from physical nearly as much as earlier generations, flow fluidly into new spaces, flexing their own identity based on the powerful tools these worlds offer them. It is a place for self expression, for socialising in meaningful ways, and for access. 

One important note for brands: very rarely does it work to just re-create your physical identity as a digital one. Very few people want to visit a digital store that is exactly the same as one in real life, and then link to purchase. That’s just a fancy website. Brand identity is not a storefront, it is their products, services, and how they relate experientially to people.

(Danny and Camila)

LBB> How do you evaluate if a brand should enter the metaverse? What are the first steps of this process, from The Electric Factory’s point of view?

Danny and Camila> To be clear, we are tech agnostic. We are not just a metaverse company trying to pull everyone in. With that said, in the long term, entering the metaverse will not be a question of ‘if’ as much as ‘how’ - much like it is for brands on the internet. Right now, brands have a choice to be challengers or followers.

Either way, it will become increasingly important for brands to have a clear understanding of the metaverse’s capabilities and how they can best utilise it. We recommend that brands take the time to understand the foundations of the technology, including the roots of the metaverse and how blockchain, crypto, and tokens work. By understanding the basics of these technologies, brands will be better equipped to take advantage of the opportunities presented by the metaverse. And the best way to learn is to do. Anyone can be a challenger.

LBB> Will the metaverse be a growing consideration for brands in 2023? Will brands and agencies continue to allocate more of their budget to developing their metaverse identities?

Danny and Camila> Today, it is clear that metaverse will become a major trend for companies in 2023 and beyond. Industry experts and trend forecasts indicate that the metaverse market will see significant investments and expenditures in the upcoming years. As McKinsey put it in a recent report, “With its potential to generate up to $5 trillion in value by 2030, the metaverse is too big for companies to ignore.” Brands and agencies will need to allocate more of their budget to developing their metaverse identities in order to keep pace with the rapidly evolving technology. 

Brands and agencies should approach the metaverse with strategic and calculated moves, rather than making all-in investments. This means carefully allocating resources to different areas within the metaverse in order to gain relevant insights across the space. We can expect to see a peak in budget allocation for metaverse marketing efforts in the short-term. However, as brands and agencies realise the metaverse is still in early stages and that audiences are scattered across multiple platforms, we may see a downturn. But, following the Gartner Hype Cycle, once the trough of disillusionment ends, a period of enlightenment will emerge with more business-driven strategies, new revenue streams, new sales channels. 

LBB> How do you see the looming economic downturn affecting this progress? Will brands and agencies favour more traditional physical and digital opportunities during economic hardship?

Danny and Camila> It is important to acknowledge that an economic downturn can have a significant impact on the profit and loss of the brands and agencies investing in the metaverse. During economic hardship, brands and agencies may shift their focus towards revenue-driven initiatives as they are looking to optimise resources to maintain profitability.

However, it is important to understand that even during these hard times, the future never pauses. That's why it is imperative that brands make smart decisions about their investments in the exploration of emergent technologies such as the metaverse. Allocating a minimum level of investment could be an action to continue learning from this rapidly evolving environment - focusing on smaller actions or piloting at a limited capacity. 

In short, while an economic downturn can have an impact on the progress of the metaverse, brands and agencies can mitigate the effects by making smart investments and staying informed about the latest advancements in the space. 

More News from The Electric Factory
5 minutes with...
5 Minutes with... Juan Ciapessoni
Work from The Electric Factory