What the metaverse means for marketing and generative AI
By embracing innovative marketing strategies, businesses can leverage the metaverse to stand out in a sea of AI-generated content
Picture this: You're a brand manager in a world where everyone relies on generative AI for their digital marketing strategies. Your unique product (that once stood out) is drowning in a sea of AI-generated content. It's a world where everything looks the same, and attracting new customers takes time. With the advent of generative AI content, this is the scenario many businesses face, if not already, in the not-so-distant future. And it’s in this scenario where adopting marketing strategies that incorporate the metaverse early on will help you stand out.
The global Metaverse market, valued at $US65.5 billion ($A101.5 billion) in 2022, is projected to expand to $US936.6 billion ($A1.45 trillion) by 2030. It is becoming clear that the metaverse presents a unique avenue for transforming brand differentiation and consumer engagement. It provides a new frontier in customer engagement, offering rich, immersive experiences that blur the lines between the physical and digital worlds. However, amidst the excitement, the practical application of the metaverse across business still faces challenges: many brands, even Meta itself, need help navigating it effectively.
Jason Juma-Ross, Director of Tech Industry Strategy at Meta, recently explained that even at Meta, there is yet to be a definitive answer as to what the metaverse will look like or when it will hit the mainstream. He also clarified some common misconceptions about the technology’s rollout. “I think there are many misconceptions about what it is and isn't. Some of those focus on timing. We've been working on this for a while, probably from 2015 onwards. But when we started talking about this publicly some 18 months ago, we said, 'hey, you know, this is going to take five to 10 years.' There are lots of technologies that need to be developed and invented, it's going to take a while.”
Why should businesses care about marketing in the metaverse?
Meta’s Mr Juma-Ross recently spoke at a workshop hosted by the Metaverse Lab (MLab) and the UNSW Marketing Leadership Forum, where industry professionals and forward-thinking academics came together to delve into the potential of the Metaverse. Speaking at the event, Ko de Ruyter, Professor in Marketing and Vice Dean (Research) at King’s Business School and Adjunct Professor at UNSW Business School, explained that businesses must adopt evidence-based strategies for the metaverse to be successful.
Specifically, he described how applying academic research with its methodical experimentation and statistical analyses has produced vital insights into how businesses can utilise (and why they should care about) innovative solutions, like marketing strategies that incorporate the metaverse. He said the metaverse serves as an antidote to the problem of content saturation driven by generative AI, offering a fresh way to capture the attention of a new generation of consumers.
However, a guest panellist at the workshop, Jennifer Killian, Chief Marketing and Experience Officer at XPON Technologies Group, said real challenges and disparities exist in creating immersive customer engagement, particularly in business-to-business (B2B) marketing.
Ms Killian said that while business-to-consumer (B2C) sectors are making significant progress, the B2B sector needs to catch up. Ms Killian attributed this disparity primarily to the slow pace of organisational procedures and change. However, she said the failure to adapt marketing strategies and embrace emergent technologies such as the metaverse could render companies more relevant and attractive to their intended target demographics. “I wonder if it will take another pandemic to get us back into the metaverse again. I hope not,” she said, explaining that some organisations rely too heavily on outdated approaches, even when better tools and capabilities exist.
Innovative solutions to stand out in digital marketing
A significant takeaway from the workshop was the emphasis on crafting immersive experiences and engaging customers through brand adventures that challenge conventional marketing approaches. It’s clear the gamification of digital marketing means that brands can no longer get away with simply replicating physical experiences (like shopping) in the virtual world, as this won’t resonate with new audiences. Soon, customers will expect to try on products virtually, using their avatar, for example.
So, how can businesses incorporate metaverse marketing strategies? During the workshop, Associate Professor Mathew Chylinski, Founder and Director of the UNSW MLab, introduced the Alice in Wonderland Model, which is a structured framework developed through rigorous academic research. This model addresses the shortcomings of current metaverse marketing attempts, providing marketers with a roadmap to harness the potential while avoiding pitfalls. The core of the Alice in Wonderland Model revolves around creating value through divergent experiences in an immersive wonderland and forging brand connections through metaphorical elevation. Guiding customers through metaphors allows brands to establish memorable relationships and "aha moments," leading to brand epiphanies.
According to Associate Professor Chylinski, customer insights suggest the importance of finding a "zone of successful hyperreality" in the metaverse where brand value is enhanced. This zone is defined by two key insights: that customers in the metaverse seek divergent experiences beyond physical reality and that brands often fail when they don't adapt their approach to this new divergent reality, either by creating mundane experiences or by straying into absurdity without a clear link to core brand values and messaging.
It’s important to strike a balance between novel/strange new experiences and connecting those experiences to a deeper, more familiar meaning. He said this helps make these experiences work well in the virtual world without leaving people feeling too confused or disoriented.
Yet many brand managers remain unaware of the importance of establishing clear links between metaverse experiences and core brand messages, resulting in ineffective marketing strategies. Associate Professor Chylinski explained that a key concern among managers has been generating revenue and capturing value in this new market.
While brand managers might be scared to venture outside of their comfort zone, innovative new solutions like the Alice in Wonderland Model, for example, address this by linking metaverse experiences with traditional marketing metrics, including customer acquisition, retention, willingness to pay, and referral, which are all essential measures of marketing success, concluded Associated Professor Chylinski.
MLab is a research laboratory at UNSW Sydney specialising in augmented reality (AR) and virtual reality (VR) marketing. Through evidence-based strategies and academic research, the MLab aims to navigate the Metaverse marketing landscape for collaborative and creative problem-solving grounded in rigorous research and expert analysis, ensuring the latest data and insights back every project. For more information, contact Associate Professor Mathew Chylinski, Founder and Director of the MLab.