A perfect storm has led some industry watchers to wonder if the metaverse, once marketing’s favorite shiny object, is on life support. Generative artificial intelligence (AI) like ChatGPT has taken over the tech hype cycle; key platforms are seeing paltry engagement and grappling with thorny questions around privacy and brand safety; and economic volatility has pushed brands to prioritize marketing fundamentals versus the digital bets that ran wild during the earlier pandemic boom.
“Generally, there’s a lot less conversation around it,” said Dave Kersey, chief media officer at GSD&M, of client interest in the metaverse. “Largely, people have pumped the brakes.”
That said, writing off the metaverse at large may be premature despite the higher risks in areas like data privacy. One doesn’t need to look far to see brands in a number of categories continuing to deploy metaverse strategies to connect with young consumers, foster community and support hybrid experiences. Rather than a curtain call, the current phase of metaverse development could be more of a hibernation period. What emerges following the rout may be a metaverse with clearer definition but a more limited scope compared to the far-flung descriptors that colored early excitement for the Web3-adjacent space.
“I believe it will be much narrower,” said Kersey of how definitions of the metaverse could shake out. “Marketers are going back to tried-and-true tactics that are driving sales and hitting the bottom line.”
In the same way that marketing departments are often the first to feel cuts in a downturn, dedicated metaverse teams have been on the chopping block of late. That’s led to some doomsaying for a channel that was built on lofty promises to bridge the real world with virtual realms and enable innovative forms of commerce, an obviously expensive prospect. Similarly, consumers have been watching their wallets closely amid sustained inflation, creating further barriers for pricey hardware in metaverse-related categories like virtual reality (VR) that have struggled to take off.
Disney recently eliminated its metaverse division as part of a broader round of layoffs, as reported in The Wall Street Journal, while Microsoft has pulled back on areas like social VR. Even Meta Platforms, arguably the metaverse’s biggest champion among the FAANG firms, has put more emphasis on AI, joining others in shifting focus to automated technology. Marketers, too, are taking quickly to generative AI solutions like ChatGPT.
“AI is a little more practical, functional, transactional,” said Kersey.
(Copyright: MarketingDive Will metaverse marketing survive the current tech rout? | Marketing Dive)