By Jay Friedman, President Goodway Group
While the metaverse is not a new idea, it quickly rose to prominence when Mark Zuckerberg used the term repeatedly in a late October earnings call. VR, AR, blockchain, NFTs and other Web3 technological advancements enable immersive social interactions online and bring elements of the physical world online, enabling us to “move ourselves and goods seamlessly between our digital and physical worlds.”
How the metaverse will and has influenced traditional business functions such as advertising and marketing continues to be a big conversation within the industry. But we’ve yet to explore in-depth what this merging of the real and digital world will mean for branding.
The Purpose of a Brand in the Virtual World
At its core, a brand holds two essential roles for the consumer. This first is as a stored value of trust that guarantees a company’s credibility, quality and beliefs. Nike, for example, has a powerful, trustworthy brand. If my Nikes are defective, I trust that brand to stand behind them. The second is self-expression or signaling. A brand communicates to others how they want to be seen.
Centuries ago, it was more common for people to be the “brand.” John, the local horseshoe maker, was the brand, not a company. Today the world is more expansive and brands have assumed this vital role with trade extending beyond borders.
Yet, in the metaverse, it’s unlikely your digital sneakers are defective, amplifying the importance of the self-expressive component of a brand over anything else. While there are still elements of trust to consider, such as longevity and continuity of values, branding in the metaverse hinges on marketers’ ability to bring their brands to life in a specific way in a specific environment.
The power of signaling precisely what someone means and who they are when they digitally showcase a brand will grow exponentially. Similar to the mind-shift that occurred when marketers transitioned from catalogs to e-commerce and ultimately to anywhere-commerce, branding in the metaverse requires a fundamental change in their approach.
Adapting Branding Strategies for the Metaverse
With the metaverse emphasizing a new level of importance on brand image, brands must more clearly define their personality, core values and stance on social issues (if they choose to do so) more than ever. Being everything to everyone is a death sentence to a brand as it makes it impossible to self-signal in an environment where self-signaling is the main reason for brand ownership.
Interestingly, IRL (in real life) quality is still important. If a car is known to be unreliable in the real world, consumers will extend this concept to digital worlds and shy away from that product. This is because all brand interactions create a single brand personality and image, whether they occur in the physical or digital world.
So how can brands shift their strategies to create a strong brand image that resonates with and delivers value to consumers in the metaverse?
Understand Your Brand and Audience: Before fully diving into shifting your brand image to the metaverse, marketers need to ask themselves a few key questions. What does my brand stand for? Who are my customers? What do they value? Many marketers will scoff at these questions — they’re table stakes for any decent marketer!
But how a marketer defines its brand personality and how a consumer sees it are often different. Truly understanding this provides a clear understanding of both the brand and its customers, which is instrumental in shaping the brand’s image and messaging in the metaverse. It also provides the guidance necessary to create synergy between a brand and its customers to signal who they are accurately.
Adopt an Authentic Approach: To avoid being perceived as gimmicky, marketers must nail their brand’s voice and persona in the metaverse. How? Through authenticity. This means the digital brand carries a voice that’s appropriate for the platform and would be “how the brand would behave” in that type of environment.
This demand for an authentic brand image extends into the experiences marketers create within the metaverse. Whether incorporating a brand into games, media and content or digital items — NFT’s anybody? — the brand must also naturally integrate with the world around it.
It’s About Behavioral Economics, Not Economics: Games like Fortnite have shown us that consumers will purchase or compete for rare items to elevate their perceived status. This is the scarcity principle at play. Other behavioral economics, like anchoring and loss aversion, work just as strongly in the metaverse as they do in the physical world. With signaling playing such a massive role in marketers’ branding strategy in the future, brands must have an expert understanding of how people think, behave and respond to cues and signals.
With these considerations in mind, marketers can build a branding strategy that establishes a deeper connection with customers and delivers on customers’ desire for value, community and experiences in the metaverse. However, the most crucial element that marketers must embrace is experimentation. The metaverse isn’t fully here yet, giving marketers ample time to thoroughly vet their branding strategy testing new approaches, failing spectacularly and adapting to perfect their technique.