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Enter the metaverse, the future of in-game advertising

By Tom Simpson | Vice president of programmatic, Asia Pacific

January 18, 2022 | 6 min read

Virtual reality and the metaverse provide new opportunities for advertisers to connect with consumers, writes AdColony’s Tom Simpson as part of The Drum’s Metaverse Deep Dive. But, he says, they must tread carefully.

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Technologies such as blockchain are set to go hand in hand with the metaverse, with NFTs powering games

In 2022, gaming advertising is going to be unlike anything we have ever imagined. As web3 comes into fruition, it’s clear there is a greater focus on gamified digital experiences, resulting in an impact on the real world.

For example, Hellman’s award-winning activation within Animal Crossing encouraged players to drop off their rotting vegetables on ‘Hellman’s Island’. For every turnip, the company would donate meals to real-life FareShare food banks.

What’s for sure is that, as gaming innovation and technology become more sophisticated, brands and agencies need to seriously rethink their approach to in-game advertising.

In-game advertising isn’t anything new and is already used by 94% of mobile game producers in their free-to-play games. However, today’s ads differs from traditional ads in several important ways.

Enter the metaverse

What once was a niche consumer segment has grown to the point where ‘gamer’ is almost synonymous with ‘consumer’. Web3 and the metaverse give consumers a whole new way to interact, live and play. In the play economy, virtual worlds can be monetized. Every important part of our lives will become ‘smart’, digital and exist in the metaverse.

The metaverse is undoubtedly set to be the intersection of entertainment, gaming, shopping, and community, and brands need to understand that it’s also a world where conventional business models can be ignored.

A metaverse is a place where ‘consumers’ are no longer ‘consumers’, they’re ‘players’. It’s a place where they can hang out, play games, buy land, earn digital items and collectibles, buy stuff, lend money and meet new people.

Now we’re already seeing metaverse-like behaviors. Early examples of popular multiplayer online games like World of Warcraft and Habbo Hotel were our first glimpses into what the metaverse could be. Players could exchange gifts and buy online products for real-life money while meeting new people from all around the world. These early examples are paving the way for the new era of the metaverse and the incredible in-game advertising possibilities it presents.

Technologies such as blockchain are set to go hand in hand with the metaverse, with NFTs powering games. Take Playermon, which allows players to buy, hatch and interact with their favorite Playermon character via an NFT in the game’s metaverse. Online-to-offline-to-online (O2O2O) and omnichannel shopper strategies are also ripe for disruption via the use of blockchain and NFT technologies.

Old school KPIs in a new world

When it comes to measuring gaming, there is a lot to make marketers smile, including access to a relevant, trackable, verifiable and valuable audience. With so many distinct gaming subcultures at our fingertips, it’s possible to reach extremely narrow and extremely wide audiences at the same time.

The challenge, however, comes in knowing how to collect and evaluate this user data, with many businesses set for a steep learning curve. It’s not enough to simply apply existing old school metrics to the entirely new proposition presented by the metaverse.

Virtual reality and the metaverse provide new opportunities for advertisers to connect with consumers, but they must tread carefully. Brands must go further than merely taking an existing piece of creativity and shoehorning it into a game. Be ready to automate all types of advertisements, not simply interstitials and rewarded videos.

In-game advertising must do two things at once, capturing attention while not detracting from the gamer’s experience. Creativity is needed to unlock both. There’s a whole universe of creative muscle for brands to flex within games. Gaming and in-game advertising feel like the next monumental industry evolution since search and social. But we all need to be realistic about what is possible right now, and how the parts can complement each other.

The tech businesses I closely work with have prioritized gaming innovation over the past year. Adtech firms are already keeping up with the pace of technology, and evolving their strategies and approach to optimize online experiences for a new world. With privacy and proper data usage in mind, the future of web3 and the metaverse is looking bright.

Tom Simpson is the senior vice president of AdColony for APAC

For more on the exciting new opportunities for marketers in this rapidly evolving space, check out The Drum’s Metaverse hub.

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