“Users play on Roblox an average of 78 hours per month. That's more time than the average consumer spends on TikTok, YouTube, Instagram and Facebook combined." How can brands cash in on this trend, creating engaging experiences with lasting impact?
“The biggest myth about the metaverse is that it's just hype. Today it brings billions in profits." This is supported by Justin Hochberg, CEO of the Virtual Brand Group, analyzing in Marketing Week the opportunities that the metaverse creates for brands and the conditions for exploiting its potential.
MW: What is the picture of the metaverse today?
Justin Hochberg: To give you an idea of the size of this market, 5.8 billion virtual fashion items were sold on Roblox last year, making it the third largest e-commerce platform per unit worldwide, after Amazon and Alibaba. The metaverse is not a prediction, it is a profit opportunity here and now. Historically, it has always been difficult for 99% of people to understand what the 1% are doing, until they put it to practical use. Think of the PC, the internet, social media… the skeptics have always outnumbered the believers.
There are many misconceptions surrounding the metaverse. What are the most common?
The biggest myth about the metaverse is that it's just hype. Today it brings billions in profits for every type of brand and consumer. And at Virtual Brand Group (VBG), we know the metaverse isn't just hype for three reasons: First, VBG made international fashion company Forever 21 the number one retailer on Roblox in less than six months, and we're selling millions of products in the first month. year. Second, we launched Barbie's first metaverse clothing line with the #TwinWithYourAvatar campaign, which went viral, driving millions in earned media, new virtual sales, while converting virtual consumers into real-life shoppers in Forever 21 stores.
Finally, on a more general note, unlike previous innovations in social media, what most people call the metaverse (social games, crypto, blockchain) has been around for decades: Roblox launched 18 years ago, cryptocurrencies appeared in 2008, and blockchain has been around for 10 years. Most people didn't know about any of these until last year when Facebook renamed itself Meta.
How can a company decide whether or not to develop a presence in the metaverse?
Speaking of myths, another misconception is that the metaverse is only about certain kinds of companies and people who belong to certain demographic groups, like GenZ. It is true that, traditionally, younger people adopt new technologies earlier and faster. However, metaverse is already used by every age group and is suitable for every type of company, B2C or B2B. If you have any kind of customer, if you sell something, anything, you have an e-commerce strategy. Think the same about the metaverse. That's why VBG works with businesses in a wide range of markets such as fashion, automotive, TV shows, movies, games, subscription services, music, beauty, food, as well as those that offer training services, event management, etc.
Another thing that is not properly understood is the measurement of success. Today, we live in what many call the "attention economy," where time is the common denominator for which brands compete. Each consumer only has 24 hours in a day and there is no way to change that (unlike money which is something variable).
When VBG starts working with a brand, we ask "how much time of their available consumer they earn per month". How about if we could triple it with a better ROI? This is what VBG offers, leveraging the immersive and social character of the metaverse.
In what ways can the metaverse evolve the brand-consumer relationship?
Companies spend money on e-commerce, TV and social media because they think that's where their consumers are. They were. But now there are fewer and fewer of them. What happens is that users play on Roblox for an average of 78 hours per month. That's more time than the average consumer spends on TikTok, YouTube, Instagram and Facebook combined.
More than the amount of time people spend in the metaverse today, what they do has an even greater impact. All of VBG's brand research, based on behavioral models, shows that the metaverse influences people's IRL behavior more than any other social media or channel in general, which is a huge shift. In support of this, a recent study by YPULSE showed that 47% of Gen Z want to discover brands first in the metaverse. The Boston Consulting Group recently issued a report stating that "59% of 18-34 year olds believe the metaverse can replace social media."
The biggest challenge seems to be building a metaverse strategy with overall business impact. Is it really possible?
Marketing vs Money? This is the most irritating conversation my team can have with companies. Of course you can use the metaverse only for marketing. But it will be a missed opportunity. We believe that cashing in on the potential of the metaverse is one of the most important KPIs. Every time we work with a brand, we focus on how to build a $20M business in less than 18 months. This may sound ambitious, but this world is so new and there are so many ways to leverage the technology that makes it possible.
One of the key elements to such an approach is to shape your brand's presence in the metaverse as an "experience in progress". This means that it should be constantly refreshed so that consumers want to stay on it and come back regularly. For example, when we created the experience for Forever 21 on Roblox, we were only the third brand to be on the platform. We didn't build a store as one might expect, but an ever-evolving world where players could build their own store, customize it, make purchases and trades, organize fashion shows, spend time with their friends and enjoy events, activities and concerts. And what's more, we refresh it on a weekly, monthly and quarterly basis.
We think this way because, as I already said, we are competing for people's time. And the more time you buy for the experience you've created, the more customers connect with your brand and want to have a piece of it.
Tips for Meta-Newbies
MW: What advice would you give to marketers now planning their presence in the metaverse?
Justin Hochberg: The four most effective, practical tips I can offer to brands thinking about taking their first steps are:
- Get started now: Don't let corporate "analysis paralysis" get in the way.
- Start over: It may seem like everyone in the metaverse is doing something and you're left behind. The truth is that we are still in the "first" day of the metaverse. It's the perfect time to start new things and not worry about the long-term impact. Then try something new. The good thing is that it is so early that the cost of execution is insignificant compared to what will happen in the next two years. As a brand you can start creating something with 25, 50 or 100 thousand dollars. In fact, in some cases even for free, with the right partnerships. So limit your social media budget and invest in the metaverse.
- Work with creators, not consultants: You will need help but don't choose an expensive agency that just advises you. All the companies and people we work with are "artisans" who "get" their hands dirty in the "trenches". They don't do presentations and infographics. They implement. This is how you go from being an outsider to having essential knowledge that will give your brand an advantage in the long run.
- Build a team with people who understand more than just technology: You need a partner who can build all aspects of a real business. Three elements are required: a. A team that can build things, like virtual games or fashion. b. Someone who understands commerce and marketing, both in the virtual environment and their connection to the physical world. c. A partner that can handle all technologies and platforms, be it social gaming, NFTs or blockchain.
Don't operate in silos, assigning different items to different partners. The beauty of the metaverse is that everything is connected. Use this to your advantage, as we do with all the brands we work with.