Market Spotlight — NFT Rising: Reimagining Marketing In The Metaverse

By Aqilliz  

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Rise of NFT metaverse

From Coca-Cola to the NBA, brands of all shapes, sizes, and industries have capitalised on the promise and potential of non-fungible tokens (NFTs) — the latest tech trend to appeal to mass audiences. In Q3 2021 alone, sales volumes of the asset class surged to US$10.7 billion, representative of an increase of over an eightfold from the previous quarter.

In line with the growing interest surrounding NFTs, another corresponding concept that has dominated headlines is the metaverse. Defined as an online 3D universe that comprises numerous virtual spaces, the metaverse essentially enables one to live their life online — transcending borders and the limitations of physical geography. The metaverse will be enabled by other emerging technologies, be it augmented reality or virtual reality, as users traverse digital landscapes by way of their own avatars. If it sounds crazy, it shouldn’t — after all, so much of the year has already been spent living life online!

As we collectively transition to an increasingly virtual state of affairs, what role will NFTs play in this new digital universe and what will this mean for the future of marketing?

Redefining value

The concept of a metaverse predates that of NFTs, and to understand how, we’ll need to look at the gaming industry. From popular virtual world games such as Fortnite or Roblox where users can create their own avatars to navigate an in-game ecosystem, complete with in-game assets for purchase with real-world value, gaming has prepared a new generation of increasingly digitally-savvy consumers for what a truly digital economy looks like.

Consider that earlier this month, game developer Epic Games partnered with luxury fashion brand Balenciaga to launch high-fashion in-game ‘skins’ for its leading battle royale title Fortnite. Available for purchase with Fortnite’s in-game currency V-Bucks — priced at up to 1,500 V-Bucks or US$15 — or upon completion of select challenges, the partnership is befitting representation of a virtual economy and marketing campaign in action. Other metaverse-esque apps including blockchain-based games Axie Infinity and Decentraland function with a play-to-earn model, enabling players to buy and sell virtual land or cute creatures.

As brands continue to tap into these digital experiences, be it Gucci or Nike, we’re already beginning to see the initial stirrings of virtual communities built upon a repository of branded content, assets, fashion, and most of all, experiences for consumers to rally around.

Generating authenticity

That said, brands need to remember that these virtual spaces are more than just opportunities to capture audience segments. Catalysed by the coronavirus pandemic, the past year has shown the true importance of technology in being able to connect people and serve as a critical conduit for long-term relationship building. The metaverse is reflective of this fact and functions as a space for brands and marketers to meaningfully collaborate, engage, express, and socialise with their customers.

In line with this, it simply won’t be enough to borrow from existing models of in-game advertising. Users want something of value and something to resonate with. Take Stella Artois’ partnership with digital horse racing platform ZED RUN, where the Belgian beer brand launched an exclusive collection of NFT horses to be bred, raced, and trained. The campaign mirrored the brand’s existing event sponsorship activities, positioning the NFT collection as something authentic to the brand rather than as a means to capitalise on the hype.

Meanwhile, virtual world game Roblox played host to Gucci Garden, an immersive experience that allowed users to navigate themed rooms as avatars in order to try on themed clothing and accessories that could be purchased in real life.

Eliminating gatekeepers within a virtual economy

As tech companies rally around the potential of the metaverse, the critical role that advertising and marketing will play hasn’t gone unnoticed. Facebook, in its eventual positioning as a ‘metaverse’ company, has implied that advertising will continue to be a key source of revenue in its vision for a virtual universe. However, critics have pointed out the risks of enabling big tech players to dominate in the arena.

Instead, others are looking to embrace the ethos of decentralisation — as presented by NFTs and their underlying blockchain technology — as a means of ensuring a more open metaverse. With blockchain, we can reimagine a metaverse where users are in control of their data, where NFTs can represent the scarcity and provenance of one’s digital identity. Here, independent content creators, artists, as much as brands and marketers, all stand to benefit.

The metaverse quite literally offers a whole new universe of opportunities for marketers. As the next frontier in digital, it’s time for experimentation to begin.

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