Metaverse Mania Cools for Many, but Not for Marketers

Many marketers build their metaverse campaigns largely to raise awareness or improve consumer perceptions of their brands. (File Photo: Bloomberg)
Many marketers build their metaverse campaigns largely to raise awareness or improve consumer perceptions of their brands. (File Photo: Bloomberg)


  • Marketing executives still say they will spend more on the metaverse this year even as some consumers and tech companies lose interest in the concept

Even while some of the metaverse’s biggest proponents are scaling back or shutting down spending on their visions for virtual worlds, many marketers are standing firm.

Forty-six percent of consumer brand marketers say they will increase their metaverse budgets this year, and only 12% say they will spend less, according to a survey of 903 executives conducted by research firm Forrester in January and February.

Mastercard Inc., which last year helped host a virtual Grammy Awards red carpet on popular online game platform Roblox and created a plaza for Pride Month in the 3-D virtual world Decentraland, plans to fund more branded metaverse experiences, said Chief Marketing and Communications Officer Raja Rajamannar.

“Beyond the buzz, beyond the novelty value, there is a lot of possibility in this," Mr. Rajamannarsaid.

Marketers’ continued interest in the metaverse contrasts with other recent developments.

Microsoft Corp. recently shut down a social virtual-reality platform; Walt Disney Co. closed its division for metaverse strategy; and Mark Zuckerberg, who kicked off much of the interest in the sector when he renamed Facebook as Meta Platforms Inc., has shifted his focus at least in part to the industry’s new obsession: artificial intelligence.

Mr. Zuckerberg is hardly alone. Generative AI was mentioned on 163 corporate earnings calls in March, up from seven one year earlier, while the metaverse received 35 mentions last month, down from 112 the previous March, according to financial data firm FactSet.

Marketers aren’t immune to the enthusiasm over AI, which the industry is eyeing for everything from developing campaign ideas to deciding where ads should run.

Fifty-one percent of marketers named AI as their biggest tech investment priority in a survey of 408 executives conducted by research firm Advanis on behalf of marketing automation software maker Sitecore last month, compared with 8% who placed the metaverse at the top of the list. When asked where the money to fund these AI initiatives might come from, 48% of respondents pointed to their metaverse budgets.

So it is striking that many big brands still say they will continue making long-term investments in the immersive, three-dimensional digital experiences that define the metaverse.

Roblox, which lets players drop their avatars into millions of 3-D virtual experiences, is on track to double the number of branded worlds it hosts this year after recording about 100 in 2022, a spokeswoman said. Recent examples include Roblox experiences backed by retail clothing brand PacSun and restaurant-and-entertainment chain Dave & Buster’s.

Designer Samuel Jordan, who goes by Builder_Boy on Roblox and has worked with fashion brands such as Stella McCartney and Forever 21 and celebrities including Elton John, has begun receiving requests to collaborate with properties ranging from TV shows to Nascar, he said.

Metaverse math

Metaverse campaigns’ potential value can outweigh their modest price tags, even when they are less effective than envisaged, marketers said.

The cost of building many sponsored games in Roblox can range from $100,000 to $300,000, and brands can create a line of virtual goods on the platform for a low five-figure sum, according to Mr. Jordan.

Mastercard spends a relatively small amount on marketing campaigns in multiple metaverse platforms to ensure that it won’t miss out whenever one eventually reaches significant scale, Mr. Rajamannar said, citing Meta’s Horizon Worlds in addition to Decentraland and Roblox. The payment company’s metaverse spending comes from a portion of its annual budget devoted to so-called innovation projects, which also funds other experimental efforts such as NFTs, pop music albums and sponsored restaurants that only make reservations for Mastercard holders, he said.

“It’s one component, and that one component is not going to make or break our budget," Mr. Rajamannar said of the metaverse. “So therefore, I’m not particularly worried if this whole investment goes to waste because that’s part of the game, right?"

High engagement

Tokyo-based cosmetics giant Shiseido Co. is fully committed to the metaverse because it has found that consumers are more willing to engage with brands in such settings than on traditional social platforms, said Dina Fierro, senior vice president of the Web3 and metaverse group at Shiseido Americas.

“Nars Color Quest," a Roblox experience sponsored by the Shiseido makeup and skin care brand, attracted 41.9 million visitors while it was active from July to October of last year, said Ms. Fierro.

Consumers in 2021 spent an average of six to seven minutes playing a series of games on Drest, an app on which users can sample 3-D virtual fashions, that were sponsored by Nars, she said.

“When you think about seven or eight precious minutes with a consumer and how lucky you are to get maybe six seconds of someone’s attention on a platform like an Instagram or a TikTok, I think it’s very easy to validate the theory that this is a qualitative engagement," Ms. Fierro said.

Shiseido will look to expand on its past success with metaverse experiences and digital tokens, said Ms. Fierro.

Virtual worlds, real data

Many marketers build their metaverse campaigns largely to raise awareness or improve consumer perceptions of their brands.

Few, if any, currently make a profit from the sale of virtual goods, and they will find greater short-term value in using such campaigns to collect data on consumers, said Reeve Collins, co-founder of Web3 services company SmartMedia Technologies.

In 2021, Mr. Collins’s company provided the technology for Unilever’s Ben & Jerry’s to develop a “Pokémon Go"-style augmented reality game in which players searched for golden Easter eggs that could be redeemed for free ice cream at retail locations, said Mr. Collins.

These sorts of activations, and others centered around digital loyalty coupons and contests, are designed to help brands market to consumers more directly by using the email addresses required to register for every metaverse platform and app, Mr. Collins said. And the virtual wallets that consumers use to store the items they acquire in the metaverse will eventually allow marketers to track their digital behaviors in greater detail, he said.

“Your [key performance indicator] is your cost per email acquisition," said Mr. Collins.

The consumer question

Marketers’ enthusiasm aside, consumer interest in some of the metaverse’s signature experiences appears to have cooled.

The second annual Metaverse Fashion Week in Decentraland drew 28,000 unique users over its three days last month, down from 108,000 during last year’s five-day inaugural event, according to a spokeswoman for the Decentraland Foundation, which runs the platform. Sales of virtual products at the event also declined, to $26,700 from $76,757, despite the presence of brands including Adidas and Tommy Hilfiger, she said.

Another challenge for marketers is the uncertain value of their metaverse investments; 46% of those surveyed by Forrester in late 2022 agreed that measuring metaverse returns is difficult.

“The reality is that a lot of these platforms and the economies within them definitely do need to mature a bit before we’re seeing, for example, positive [return on investment] from an experience," said Ms. Fierro of Shiseido.

Forrester advises marketers to temper their metaverse expectations, according to Mike Proulx, vice president and research director of the firm’s CMO practice.

He described continued optimism about the space as “a FOMO hangover from last year," adding that, “The metaverse was incredibly hyped up in 2022."

Write to Patrick Coffee at

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