From Givenchy, Gucci Beauty, L’Oréal, among others, the metaverse seems to have captured the attention of these brands and many more. All because the total number of Indians that will be present in the metaverse will be around 13-14 million by CY23. According to industry estimates, this equates to a 200% increase from the current 4.5-5 million. “Consumers today are ready to spend their time on immersive and visually appealing mediums. The key demographic in the metaverse is between the ages of 18-25. This demographic is moving to platforms where content is in 3D and provides a more immersive and realistic experience,” Kanav Singla, CEO and Founder of Metadome, a tech startup, told BrandWagon Online.
The metaverse’s global revenue is estimated at $800 billion in 2024, up from around $500 billion in 2020, according to Bloomberg Intelligence. When it comes to advertising in the metaverse, the space offers new ways to market such as experience-driven advertising opportunities. And with that, brands advertise when delivering that experience. This is not a new phenomenon, it is believed to have all started in April 2020 with American electronic music producer and DJ Travis Scott’s concert held in the Metaverse. According to Forbes, Travis Scott’s Fortnite concert grossed around $20 million, including merchandise sales.
Categories such as automotive, lifestyle, and fashion have become early adopters of the metaverse. Even though most of the brands present to date are luxury brands, premium brands such as L’oreal, MG Motors, Mahindra & Mahindra (M&M) and Tanishq have started to experiment. “Although still at a nascent stage in India as a new area of e-commerce, we believe the metaverse offers differentiated avenues of marketing and consumer engagement, for beauty and skincare brands. We are assessing emerging consumer insights to gauge adoption, engagement and readiness for the metaverse to inform future marketing strategies,” added a spokesperson for L’Oreal India. For example, L’Oreal USA recently registered several of its trademarks in the NFT and metaverse categories Skin care brand Kiehl’s, makeup brands Maybelline, Urban Decay and It Cosmetics, and nail polish brand Essie are among the brands of L’Oréal who have also joined the league.In the case of Kiehl’s for example, the registration also covers the rights of virtual perfumes not downloadable in the metaverse.
Due to its nascent stage, few metrics have been defined to measure ROI. Currently, the industry uses cost per experience (CPE), mainly because in the virtual world, the infrastructure cost per user is higher than in the digital world. According to industry estimates, advertising rates on the metaverse are estimated at one-third of a CPM on digital platforms, which ranges between Rs 150-250. Meanwhile, the cost of activation and infrastructure is estimated between Rs 7 and 15 (10-20 cents) per user.
However, marketing in the metaverse is not yet a mainstream item. Industry stakeholders believe that even though everyone wants to enter the metaverse, the industry is still trying to figure out what marketing means in the virtual universe, whether in terms of social media, public relations or digital marketing. “A marketer assesses and understands whether marketing in a metaverse leads to better return on investment (ROI) or gives better engagement to their end consumers compared to the digital or physical world where they directly target their consumers,” Aditya Dhruva, CEO, Factoreal, a marketing automation platform, said.
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