October 17, 2022 | 5 min read
This perspective originally appeared in The Drum.
The entrance of the metaverse, a fully immersive, augmented and virtual reality experience anticipated to surpass the popularity and utility of social media, streaming video, and other digital platforms, opens a whole new world of opportunities—and challenges.
Tech companies like Facebook parent Meta, Niantic, and Roblox are racing to build the first true metaverse experience for users, and in doing so, an interesting growth trajectory plays out for onlookers like ourselves.
Similar to how social media emerged as a simple online space for interacting with friends and family and eventually transformed the internet (and society), the metaverse platforms of today, while impressive in their own right, are rudimentary to what can be expected from the metaverse of tomorrow.
Knowing what we know about the challenges facing web2, such as enabling adequate consumer privacy and data security, opportunities like launching a new digital medium, such as a non-fungible token collection (NFTs), and metaverse activations should be carefully considered, with special attention paid to the challenges currently facing web3 technologies.
Metaverse platforms expand beyond the standard technology found on mobile or desktop devices and can often require hardware equipped for augmented and virtual reality technology.
Most web2 platforms, like YouTube and Instagram, are free to users, while Meta’s version of the metaverse, for example, is accessible through a Meta Quest 2 headset, which retails for $399. Rival platforms may require different software and hardware, meaning that mass adoption of metaverse experiences may be slower to come by versus the exponential growth seen by social platforms in their heyday.
Virtual worlds like The Sandbox and Decentraland are accessible via desktop devices; however, blockchain technology is used, requiring users to have virtual currency to unlock the full potential of these metaverse platforms.
The infrastructure of each metaverse platform relies on cutting-edge computing technology, like the blockchain of Ethereum (Decentraland), which benefits from an influx of capital and press interest but can translate into a steep learning curve for general audiences who may want to join in on the fun.
Brands eager to hop into the metaverse with virtual fashion collections, NFT drops, and brand stores should remember that ease of access and understanding will be critical to long-term success.
Inclusivity should remain top of mind and will go a long way toward helping customers grow more accustomed to engaging with brands in the virtual world.
In practice, this takes shape through clear instruction, consistent brand messaging, and even support resources to help customers better understand how to engage with the brand in a metaverse activation.
Of course, accessing the metaverse is only one piece of the puzzle.
Some immersive experiences like Roblox and Fortnite have made things easy in this respect by establishing themselves, first and foremost, as a game platform versus a metaverse. Logging into Roblox is as easy as Facebook, but regarding engaging and moderating communities, it couldn’t be more different.
Roblox was recently accused of deceptive marketing by Truth in Advertising, which argued that Roblox doesn't explicitly identify branded worlds, called “advergames.”
The same challenges hold true for providing user safety in virtual worlds. In May 2022, a female researcher reported that her avatar was harassed while on Meta’s social-networking metaverse platform Horizon World.
While Meta launched a new personal safety feature dubbed Personal Boundary in February 2022 to reduce these encounters and avoid unwanted interactions in response to similar reports, the continuation of these instances signifies that user personal safety remains an ongoing concern.
Similar to how regulators eventually mandated sponsored content to include certain attributes (like #ad), we can expect a similar system of rules and regulations to be introduced across metaverse platforms in due time. The same can be expected regarding user safety.
Of course, until then, brands that invest in metaverse activations could be subject to scrutiny by watchdog groups and other parties for their inability to regulate and moderate content and communities within these platforms.
In today’s world, protecting consumer privacy remains critically important, with legislators, platforms, and regulators all weighing in to address concerns by introducing features, legislation, and data processing procedures.
At a high level, data privacy concerns in a web2 environment primarily center around consent, safekeeping the data that's collected, and reducing any unnecessary instances of user behavior and signal tracking across digital properties. In contrast, the list of user data signals that can be tracked within a metaverse environment exponentially increases.
Depending on the sophistication of the platform in use, data collection for metaverse companies could soon include virtual avatar behavior, biometrics, eye-tracking within AR/VR hardware, personal interests, and countless other personal details that'll require specialized data privacy protections.
As brands weigh metaverse activations, data collection and privacy protocols should be addressed with any potential partner to ensure alignment with a brand’s data values.
“Logging into Roblox is as easy as Facebook, but regarding engaging and moderating communities, it couldn’t be more different.”
As research shows, calls for more sustainable products and business practices are growing louder across the world stage, with brands going to great lengths to adopt more eco-friendly practices.
Despite the metaverse taking shape within virtual environments, the computing power needed to host these truly immersive experiences requires a significant carbon footprint, running counter to the sustainable goals many brands have put forth as key investment initiatives.
In a 2019 scientific study, global bitcoin production was estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year, or the equivalent of carbon dioxide levels produced by Jordan and Sri Lanka.
According to Digiconomist, a platform that explores digital trends, the electrical energy footprint of a single Ethereum transaction is similar to the same amount of power used by an average U.S. household in eight days. NFT transactions are producing similar carbon emission volumes.
As corporate action falls under greater scrutiny by customers, regulators, and watchdog groups, brands that are interested in entering the metaverse will need to weigh the environmental impact of any activation against the company’s larger ESG commitments or risk negatively impacting the work being made to curb carbon emissions.
Already, brands such as MeUndies have walked back on web3 partnerships after customers argued that the activation ran counter to the brand’s mission to reach net-zero carbon emissions.
For all the challenges facing the metaverse, there are just as many opportunities marketers should be excited about.
The ability to engage with customers in new mediums, build transformative brand experiences, and ultimately bring the brand to life in a new environment are activations that bring with them a whole world of unlimited creativity and never-been-done-before opportunities.
As with any new technology, challenges exist and should be thoughtfully considered before engaging but not used as an insurmountable barrier to entry. For every challenge facing the metaverse, there are countless operators working to solve them.
Just as web2 platforms built out dedicated teams and tools to solve challenges such as protecting user privacy, and enforcing content moderation across regions, the same can be expected for web3 technology in the years to come.
It’s early days for web3, but as web2 evolves into this new frontier, brands that take an imaginative yet pragmatic approach to vetting new opportunities will be best positioned to unlock the truly endless potential of any metaverse opportunity that comes their way.
About the Authors
Written by Ting Zheng, Abby Long