From Givenchy, Gucci Beauty, L’oreal, among others, metaverse seems to have caught the attention of these brands and many more. This is all because the total number of Indians who will be present in the metaverse will be about 13-14 million by CY23. As per industry estimates, this amounts to a 200% rise from the present 4.5-5 million. “Consumers today are willing to spend their time on immersive and visually appealing mediums. The key demographic of metaverse is 18-25 years of age. This demographic is moving to platforms where content is 3D and provides a more immersive and life-like experience,” Kanav Singla, CEO and founder, Metadome, a deep-tech startup, told BrandWagon Online.
The global metaverse revenue is estimated to touch $800 billion in 2024 as compared to around $500 billion in 2020, according to Bloomberg Intelligence. As for advertising in the metaverse, the space offers new ways of marketing such as experience led advertising opportunities. And with that brands advertise during the delivery of that experience. Not a new phenomenon, it is believed that all this started in April 2020 with US electronic music producer and DJ Travis Scott’s concert which was held in the metaverse. According to Forbes, Travis Scott’s Fortnite concert grossed roughly $20 million, including merchandise sales.
Categories such as automotive industry, lifestyle and fashion have emerged as early adopters of metaverse. Even as most of the brands present as of now are luxury brands, premium brands such as L’oreal, MG Motors, Mahindra & Mahindra (M&M) and Tanishq have started to experiment. “While still at a nascent stage in India as a new area of e-commerce, we believe that metaverse provides differentiated avenues of marketing and consumer engagement, for beauty and skincare brands. We are assessing emerging consumer insights to gauge adoption, engagement, and readiness towards the metaverse to define future marketing strategies,” a L’Oréal India spokesperson added. For instance, L’Oréal USA recently registered many of its brand trademarks in the NFT and metaverse categories. Skincare brand Kiehl’s, make-up brands Maybelline, Urban Decay and It Cosmetics, and nail varnish brand Essie are among the brands under L’Oréal which too have joined the league. In the case of Kiehl’s for example, the registration also covers the rights for non-downloadable virtual fragrances in the metaverse.
Due to its nascent stage, not a lot of metrics has been set to measure the return-on-investment. Currently, the industry uses cost per experience (CPE), this is primarily because in the virtual world, the infrastructure cost per user is higher than what it is in the digital world. As per industry estimates, the ad rates on metaverse is estimated to be one-third of a CPM on digital platforms which ranges between Rs 150-250. Meanwhile, activation and infrastructure cost is estimated to range anywhere between Rs 7-15 (10-20 cents) per user.
However, marketing in the metaverse is yet to be a mainstream element. Industry stakeholders believe that while everybody wants to enter the metaverse, the industry is still trying to understand what marketing means in the virtual universe, be it in terms of social media, PR or digital marketing. “A marketeer is evaluating and understanding if marketing in a metaverse results in better return on investment (ROI) or gives better engagement to their end consumers when compared with the digital or physical world where they are directly targeting their consumers,” Aditya Dhruva, CEO, Factoreal, a marketing automation platform, stated.