As companies begin to build out and publicize their metaverse and Web 3.0 roadmap, two very important questions surround value generation: What new revenue opportunities can the future internet provide for CP firms, and which use cases should brands be focusing on?
An interesting and unexplored opportunity for many companies is digital asset, or NFT, sales. Younger generations are more open to acquiring digital assets—which are much cheaper to create and sell—than ever before. When it comes to ongoing supply chain challenges, digital assets don’t require the same resources that traditional physical assets do.
However, many CP companies can’t just create exact digital replicas of their physical products. While many food and beverage brands have already filed for trademarks for digital candy, chips and other snacks, it’s unclear how users will interact or whether they’ll purchase virtual items, especially food. Thus far, only 19% of U.S. consumers from age 18-34 have gone shopping in the metaverse, compared to 27% that have played games, according to Publicis Sapient research. The digital asset market is a high-growth space for brands to experiment with, but in these early stages, CP firms shouldn’t rely on revenue from direct digital asset sales.
“CPs shouldn’t think of the metaverse, or any social media, as purely a commerce channel,” said Saba Arab, Managing Director at Publicis Sapient. “It’s a marketing and buzz channel, and it’s about building the followership and the love.”
Instead of pivoting straight to commerce in the metaverse, some brands are using it to build brand engagement and awareness, similar to building engagement on traditional social media.
Heineken, for example, chose to ironically launch a new beer product in Decentraland, playing on the fact that it can’t actually be consumed in the metaverse. The brand didn’t sell digital assets, but the successful campaign generated traffic and buzz around the accompanying physical product.
Unilever experimented with a virtual “Metathon” event in Decentraland for the Rexona deodorant brand. However, rather than create digital assets of their new adaptive deodorant sticks, they designed digital wheelchairs and running blades for metaverse avatars.
This new potential for a revenue stream from digital assets presents a challenge for brands: What new digital assets can your brand provide that consumers gain value from? For example, a diamond jewelry company might not create exact replicas of diamond earrings. Instead, they could sell diamond tattoos for metaverse avatars. The exact possibilities and plans will vary depending on each brand’s values and authentic strategy.
In 2023, companies can prepare for or test digital assets while understanding that until the metaverse is widely adopted, most customers won’t be motivated to purchase virtual products. According to Publicis Sapient research, only 11% of consumers ages 18-34 are currently interested in purchasing NFTs in the metaverse. However, when asked about experiencing a vacation destination, attending events or interacting with friends and family, 20% or more of those consumers want to try these things virtually.
Brands have an opportunity to expand past the trend of virtual games to capitalize on new activities to build buzz and gain insight into what customers want in the form of digital assets.
“In 2022, we saw a gold rush of companies launching non-fungible tokens, or digital assets, and a spike in value,” Dalal said. “But now, brands are realizing that they need to offer some type of utility or value propositions within NFTs that answers the question of, ‘Why should I own this?’”