How business can make the most of the metaverse
Something was missing from the alternative universe recently trumpeted by Mark Zuckerberg: brands. Facebook’s simulations of the metaverse seemed largely free of advertising.
That absence seemed at odds with the rest of a presentation that was in part a big advert for the rebranding of Facebook as Meta, an empire that is and will be fed by advertising. Indeed, when not cartooning the future, Zuckerberg spent a lot of time name-checking companies already working with Facebook’s virtual and augmented reality products and enthusing about the opportunity the metaverse offers for new business models.
Given the metaverse’s limitless real estate, companies are bound to look to fill its three dimensions with their logos and products. We know that because it already happened once — in the early virtual world called Second Life.
Launched in 2003, Second Life took off a few years later as companies raced to build virtual showrooms and boast about its potential. IBM created IBM Land; General Motors constructed Motorati Island. From BMW to the BBC, organisations sought to shape their image in this new online world.
Second Life still exists. According to Philip Rosedale, founder of Linden Lab, its creator, a million users still frequent the virtual world, which grew to be roughly the size of Los Angeles. Most businesses have lost interest. Still, while briefly hawking their wares in Second Life, they should have banked some useful lessons. One is that immersive virtual worlds can be an inefficient vehicle for traditional advertising, but they could be an interesting channel to stimulate and accelerate leadership skills.
“In general, marketing control is moving away from brand and towards customers, and in online spaces that’s even more important,” says Bernadett Koles of Iéseg School of Management, who studied Second Life.
Social media, still in an early stage when Second Life peaked, has since shown brands they need to work with customers rather than broadcasting to them. Money will of course be made in the metaverse, by Facebook above all. “The harvesting and capture [of data] is going to be a huge business,” says Lee Howells of PA Consulting (which itself dabbled in Second Life). There will be plenty of new ways to make money, too. For instance, in the overlapping virtual world of online gaming, Koles is studying how players buy “cosmetic” products to prettify their avatars, even though the enhancements do nothing to improve online performance.
But studies of Second Life suggest companies also reaped some less obvious benefits from the platform. Virtual reality “is a first-hand experience, as close as you get to being in a company and experiencing it in person”, points out Koles. How deep companies want to dive into the metaverse will depend on the task.
Scenario-planning could be one application. The humble business school case study started as an analogue simulation of actual management problems. Companies felt their way through the pandemic by wargaming short- and medium-term outcomes. In a virtual world, such challenges can be expanded and made more realistic.
Second, researchers who looked at Second Life found it gave people a chance to try out different identities and novel approaches. Just customising avatars stimulated their imagination. Playing with different options opened them to new possibilities when they emerged from the virtual world.
Third, as experience of remote working has underlined, virtual co-operation and collaboration can be more inclusive, allowing a more diverse range of people to participate. Microsoft’s more modest step towards a workplace metaverse, adding avatars to its Teams collaboration tool, hopes to build on what workers have already grown used to.
Not all these uses will require full immersion. Some people will not even want to dip a toe. “Who wants to spend time as a high-end emoji in a virtual office??” commented one sceptical FT reader about the Microsoft initiative. Second Life creator Rosedale says Facebook and others will also have to leap some daunting technological obstacles to realise their vision. “It’s like crossing a chasm,” he told The Sunday Times’s Danny Fortson on a recent podcast. He thinks that, for now, the metaverse will remain a niche.
Eventually, though, it could be a good niche for companies. To profit from it, they need to see virtual worlds less as a channel for aggressive marketing than as rich places to experiment, to collaborate, and to develop leadership and management skills. Expect the much-maligned team-building away-day of 2025, or sooner, to take place in virtual reality. Then tell your team to doff their VR headsets and bring the lessons they learnt back into the real world.
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