Has the metaverse bubble burst among brands?

While the term Metaverse was coined in 1992, it gained prominence in 2021 when Mark Zuckerberg, CEO of erstwhile Facebook, announced that the tech giant would be rebranding itself as Meta as its plans a transformation from being Facebook-first to Metaverse-first.

Later on, even Microsoft jumped on the Metaverse bandwagon - wherein the Chairman and CEO of Microsoft, Satya Nadella said, “I can’t overstate how much of a breakthrough this is.”

In India, many of the OTT, automobile, real estate, hospitality, and gaming players amongst others forayed into the Metaverse and enjoyed the first-mover advantage therein along with the immense publicity proposition and built on the phygital hype.

Having said that it is just three years down the line that the hoopla around metaverse seems to be dying a slow death as the second Oxford Word Of The Year 2022 has seen a massive decline in terms of interest and searchability on Google Trends and in real life.

It is also to be noted that Meta has registered constant losses from its Metaverse vertical- Reality Labs - in the past few quarters which had made Zuckerburg say out loud that “Metaverse is not the majority of what we're doing” and that 80% of Meta’s investments still go towards its core social media businesses including Facebook, Instagram, WhatsApp Messenger, and the ads business associated with those.

In fact, Meta shifted its focus away from the Metaverse since the end of the previous year wherein Zuckerberg emphasised that the vast majority of what Meta is doing is, and will continue to be, going towards social media for quite some time until the metaverse becomes a larger thing.

Similarly, tech giants such as Tencent and Microsoft have also halted their plans for the metaverse and therefore dissolved their core teams that were working on the phygital world.

Niraj Ruparel

As per Niraj Ruparel, Head of Mobile and Emerging Technology, GroupM, a lot of brands rode on the metaverse and NFT bandwagon in 2022 and created unique experiences in phygital spaces - including the launch of new cars, connecting people over food, etc. 

“At GroupM, as part of our recruitment process, we also interviewed candidates in GroupM's office in the Metaverse,” he added.

In his opinion, brands-led metaverses are growing as virtual worlds where people play games, hang out, meet friends, socialise, interact etc., however, the state of adoption for the Metaverse in 2022 is somewhat comparable to the state of internet adoption in 2003.

Ruparel also went on to add that Avatars emerged strongly last year and that NFT awareness and deployment also gathered pace, but it was comparatively slower than elsewhere in the world. Contrary to this, in 2022, India ranked 3rd in the number of total NFT firms, he pointed out.

Sharing his views on the Metaverse for 2023, he went on to emphasise that Web 3.0 will continue to advance and become more widely adopted, leading to new applications and use cases such as decentralised finance, digital collectibles, and virtual reality marketplaces. In fact, 5G technology will enable faster, low latency and more reliable data transmission that can facilitate the growth and widespread adoption of Metaverse technology by providing the necessary infrastructure to support real-time virtual and augmented reality experiences in his opinion.

“However, the development and success of the Web3 and Metaverse ecosystem will also depend on overcoming challenges such as scalability, user experience, and regulatory hurdles,” he opined.

Furthermore, Ruparel also shared that the novelty value for both NFTs and Metaverse is fading away in the current times and that their true value is emerging as a means toward community and collaboration which is why this year will be all about ‘Meaningful Experiences’. 

He also emphasised that Metaverse is not a fad as innovation in the phygital space will eventually bring real and virtual worlds closer to each other, but there is an increasing need to focus on creating value exchange for the customers and brands to make it effective.

Nisha Sampath

As per Nisha Sampath, Brand Consultant and Managing Partner, Bright Angles Consulting, it’s just a matter of time, but we will all graduate to the Metaverse as it will take off, when we take it out of the tech nerds’ domain and hand it to storytellers and creators.

“It was a storyteller who first coined the term, and its storytellers who can reveal its vast potential. For example, imagine experiencing a book or a movie in the Metaverse or being a part of the famous Avatar movie instead of watching it,” she said.

Sampath also went on to point out that when it comes to the Metaverse, what sounds the most exciting aspect of it to her, is that it will create a three-dimensional environment that will replace the ‘flat’ content of the web, and this upgrade to the digital world made possible by technology, will transform the online experience.

“However, the major challenge that I see to adoption is that it is still a world of tech nerds. The jargons are daunting, the user-friendliness is next to zero, and the issue of alternative payment system will take a long time to work out,” she added.

In her view, one of the other key aspects of the Metaverse is its ability to build community in new and meaningful ways. Citing an example to support her standpoint, Sampath said that Second Life, the oldest and most successful virtual world, has been a great experience for the specially-abled, someone who is blind or maybe in a wheelchair, as they can navigate it sans many limitations of the physical world which is why the Metaverse in her views can also offer much more to the users.

“The excitement of Metaverse lies in such developments and I think that the marketing and commercialisation will have to wait until we have such meaningful applications for it, that people can understand and which will impact their lives eventually,” she opined.

Sharing another parallel example, she also emphasised that we have been hearing of AI for the longest time, but even people could not really conceptualise what it was, or what it does. 

“We had to wait until ChatGPT, which really brought alive for us in the most direct way, how AI can change our lives. Similarly, the Metaverse needs a killer application – but obviously, it’s going to take time to develop,” she highlighted.

Vivek Srivastava

In the views of Vivek Srivastava, Advisor and former Managing Director, Innocean India, the disciplines of advertising and marketing are at crossroads in the current times and that one can safely add immersive experiences as another important deliverable apart from effectiveness, impact and measurability. 

“Metaverse is being used by brands as yet another delivery mechanism for such immersion for enthusiastic consumers. While there is marketing euphoria amongst brands at being the first to touch the Metaverse tape, it so far seems more of tactical one-upmanship. Even though it adds a new flavour with glitz to brand introductions or launches, one is yet to see the enduring success of brands built around NFTs etc. Moreover, the lack of interoperability across the various platforms like Roblox, Decentraland, Fortnite or Horizon World etc. makes it difficult for consumers to move owned virtual assets freely around,” he elaborated.

Moving on, he also went on to emphasise that the real positive spin-offs are coming up in the form of Virtual Product Placements or Virtual Spokespersons as the content ecosystem is getting to move beyond flat images and videos to more lifelike interactive and immersive options.

Additionally, the advantages of Enhanced and Augmented Reality, Metaverse and such tools are being deployed across the entire marketing and sales value chain including channel engagements, on-field sales team engagements, training, etc. are seeing a rush on initiatives by brands and specialist agencies, in his viewpoint.

Moreover, Srivastava also shared the belief that we have only seen the initial rumblings on Metaverse as an opportunity and we are already in the midst of its first wave but technology is evolving and communities are getting enlarged and brands plus agencies alike are keeping a keen eye on this, but it is still a long haul currently.

Ajay Kakar

Ajay Kakar, Brand and Marketing strategist, said that technology will always come up with increasingly newer engagement platforms.

“Similar to a soft drink which comes with an initial fizz, these platforms will have an initial appeal and euphoria attached to them. The true test is what happens thereafter, once the buzz settles. Do the users choose to stay and engage with an equal sense of excitement and euphoria, with the passage of time. The metaverse is possibly facing this same challenge to first prove its lasting fizz,” he said.

He also went on to add that in his belief, the metaverse, as a concept, has limitless possibilities and that so far, very few, if at all, have fully understood or experienced its true potential as these are very early days wherein the platform itself is undergoing a slow-peeling of the onion by both brands and users.

“I believe that brands today have two options- either to be where their audience (already) is or to anticipate where their audience is likely to be tomorrow, and be there, in advance,” he opined. 

Furthermore, he also emphasised that the Metaverse did come with an initial (enviable) buzz and anticipation, preceding it, in lieu of which many brands wanted to be the first to rush in and create a virtual world that would soon have their consumers visit and re-visit, in droves. 

“I know that the temptation to attempt and adopt was high, for both brands and consumers. But I’m not sure if I sense the same today. I will, however, caution that the potential and concept of the Metaverse is not to be discounted or dismissed as the thought of a world within a world is amazing. But the manifestation of the Metaverse has possibly not yet been explored or experienced to its true potential. We are possibly at just the beginning of its transformational journey,” he stated.

Kakar further also went on to point out how the Metaverse can actually be used to make the virtual world as real and aspirational as possible, and how it will help pull the crowds and inspire brands to invest time, effort and monies.

“I would like to see how the Metaverse moves from where it is, today; a virtual world of avatars or a ‘comic book’ look, to the avatar where the Metaverse will actually make me experience the real world, be it a hotel, restaurant, a car, a holiday destination, etc. I’m sure the Metaverse will soon go in that direction, in a far more impactful way,” he said.

Moving on, he also shared with BestMediaInfo.com that in the Indian context, he carries the belief that brands, per se, will now prefer to wait for the volumes and intensity that was expected. Until then, they may prefer to wait and watch.

“In the final analysis, categories and brands that best lend themselves and their customer experience to a virtual world will want to go to the Metaverse once the magical experience unfurls,” he said.

Shashank Srivastava

Bringing the marketer’s POV to the discussion, Shashank Srivastava, Sr. Executive Director- Marketing and Sales, Maruti Suzuki, pointed out that there were two categories of customers who onboarded themselves on the metaverse- companies who wanted to just ride the hype cycle and create some quick win/launch like an an event or a gamified experience campaign as a one-time initiative and companies like MSIL and Nike, who invested in integrating this experience tied to their product discovery experience.

“In fact, at MSIL, we refrained from venturing into the NFT space yet, because we clearly understood our target customer segment. So, the former set could not garner continued interest while latter saw incremental business benefits,” he said.

As per MSIL’s Srivastava every significant industry trend in its early adoption stage have players riding the hype cycle and that the future of internet as an immersive and decentralised version is going to be mainstream. Therefore, in his views, the key to success is aligning the same with your current customers and business.

“Brands who have done that still have that as mainstream. Brands who are investing in the next generation of digital natives, will continue to treat this as mainstream. Brands who only wanted to ride the hype cycle, will see user adoption fading. Metaverse or otherwise,” he stated.

Furthermore, he also went on to highlight that blockchain as a technology is very interesting as a pillar of decentralized web, or in simple terms giving users the ability have ownership of their data and said, “We believe the infrastructure requirements to do this at scale is still in its developmental phases and hence have a wait and watch approach. The regulatory framework of India is also in its developmental phase including initiatives such as the digital rupee, to enable this adoption, that will really set the ball rolling for brands focused on India to adopt this technology at scale.”

“Metaverse is a concept and technology stack that has to go through its own hype cycle. There are people who will take advantage of the same early on, where the expectations are high. There will be a trough of disillusionment. But as the technology will keep getting evolved, increased adoption will make new used cases viable,” he added.

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