Major Brands Need to Move Deftly to Avoid Bungling the Metaverse

Speaker 1: Well, the metaverse or metaverses are clearly upon us. It was the buzz topic at CES kicking off the top of 2022. But believe me, not everyone has the same definition of what metaverse will be. And most people don't have a definition of what metaverse is going to be. I know I don't yet. So let's go to one of the experts out there in the media world. Who's working on this as well. And I think it's gonna give us some great insights into where things could be going. And that would be Jane [00:00:30] lacker, who is the head of group M growth for north America, group M for those of you who aren't in the media business is one of the world's largest media agencies. And they have to get their brands connected to all the latest, as well as all the established technologies and platforms where their story and their message can be told to people like us who are all consumers. Of course. So, Jane, um, so let's start off with, in, in general, what's the buzz level around metaverse among group M clients, are you having to take it to them and say, you gotta be interested in this, or are they knocking [00:01:00] on your door and saying what it's going on with metaverse Speaker 2: The flood gates opened up on January 1st. And I would say that, um, every, uh, fifth email and inquiry is what's the metaverse do I need to be there? Uh, I need to educate my senior leadership on what the metaverse is. So I think what we're hearing from clients right now is the headlines have hit, um, their CEOs and C-suite and potentially, uh, other, uh, stakeholders, [00:01:30] uh, in the senior level. And we're getting a lot of requests right now about, uh, please educate us and, and help us understand what we need to be doing. Speaker 1: Now. This is not the first time you, our group M have been at the forefront of a new revolution in technology that is just arriving and have had to manage it. We had 3d TV and others that kind of went nowhere and we've had big ones. Of course, what are these little phones? People are watching movies on. So at this point, if you had to play a wager or tell your clients, this is gonna be big, or it's gonna be [00:02:00] niche, what would you say? Speaker 2: I honestly, I would say it's gonna be big. Um, it will, it's gonna be big and niche at the same time. So, uh, niche in that it is a virtual experience and they are virtual worlds. Um, big in that you have an entire generation starting at the youngest for four year olds who in a decade are going to be virtual first consumers. So [00:02:30] depending on where you sit today, if you are looking in an organization five years out, 10 years out, you have got to be preparing now for what is gonna be a very significant way to talk to your consumers, sell your services, talk about your brand. If you're looking one to two years out, you should be educating yourselves, but you're not gonna miss it if you're not there in the next two to three years. Speaker 1: So when you're talking about being there, uh, the first thing [00:03:00] a lot of people will think of is, okay, I've seen some images of metaverse. Maybe my kids are on Roblox or something, or I'm taking part in one of the new virtual worlds that are out there. And boy, it sounds like they're just gonna plaster everything with advertising. Is that what they want to do? Speaker 2: There's an opportunity for brands to show up there. Now we've seen Roblox, um, bring brands in, but the last thing a brand wants to do is create a bad experience in one of those platforms and just be there as an advertiser, right? Um, so the rules of engagement have not changed [00:03:30] when it comes to the necessity for a brand to create value for their consumer. And I think in this particular territory, more important than anywhere else. Speaker 1: So gimme an example of what a brand can sell for lack of a more delicate term in the metaverse leaving aside their brand and their story. They can always sell themselves. But what kind of companies do you think might have some initial luck selling items or versions of their real world product in a virtual metaverse they is world. Speaker 2: [00:04:00] So I cannot answer that question because selling in the metaverse, depending on where you are, is not the same as selling in the world world. So in a lot of these virtual experiences, again, I'm gonna go back to this. It is crypto based. So you may sell something, you may have a product in a virtual world, but the, um, the commerce you're doing is not translating itself to dollars [00:04:30] in a bank necessarily. And that's one of the barriers to adoption for a Speaker 1: Brand. Mm. Interesting. Speaker 2: But you are there and what you are getting across is and awareness. So I, I think one of the also challenges to companies today is where does being in the metaverse live for you. So there are some examples, um, Roblox, there's a great example, Gucci and Roblox, um, Sony and Roblox. And I would actually be interested to find out, is it a [00:05:00] brand building, uh, exercise, or is it truly a commerce exercise because are they AC, are they making money on it because they're not making real dollars on it necessarily, but it's definitely a really important awareness vehicle. Speaker 1: It's it may shape up long term as a parallel economy where that value doesn't transfer over to real dollars on the real company's side. Or it might, I mean, it's hard, that's a whole nother Ketle of fish is whether or not the, uh, digital currencies and, [00:05:30] and the traditional currencies ever merge into one bunch of value way beyond my expertise, for sure. But that would obviously be a big deal. And if you think about, if I'm selling a, a, a Sony piece of electronics in the metaverse or a Nike shoe that don't really exist or do anything, that's a whole different way to think about a product than the ones in the real world that actually have to have a great picture or real great comfort. Speaker 2: Yeah. Um, that's a really interesting point. So let's take the, [00:06:00] the Nike experience. So Nike just made a very important per purchase. They bought a company that makes virtual footwear for the metaverse. So virtual footwear in the metaverse. So you have an avatar, um, wanna get it a, uh, fancy pair of shoes for thing you're doing virtually, um, in whatever social, digital Medi experience you're having. Um, it is now gonna be, uh, a quote quoting Nike shoe. Um, so why would Nike do this? Nike is [00:06:30] a performance brand. They're a lifestyle brand. Okay, great. They just took a huge piece of territory in a future, uh, with a future audience. Um, are they gonna be performance based footwear? They could be, you could build that. Um, I think what's important in that example is that they saw a potential new audience and potential new territory and said, yeah, I don't really know what this is yet, but I, the shoe wear [00:07:00] is gonna be Nikes. Now that said there aren't a lot of rules here yet. And there, um, anybody can come in. There's really nothing to start Adidas from doing the same thing tomorrow, but Nike just bought the company. That's already doing it, and it's already like, made all the mistakes and figured out how to do it well. Speaker 1: So that gets an, our next question. Is, is there a metaverse or are there a thousand metaverses or is it gonna be more in the middle, like with social platforms where there are a handful of big [00:07:30] ones? Do you have any idea yet on how, how singular fractured or sort of condensed metaverses might end up being? Speaker 2: I would argue that metaverse, isn't a place like, you know, I'm gonna go visit, uh, the me metaverse and I would have several linear, uh, voyage too. The metaverse is anything where there's a, uh, social aspect where there's an opportunity to have a, uh, virtual experience [00:08:00] and G just, uh, during CS announced their life lab. And you could argue that it is their website on, um, you know, turbocharged, right? So you can have a virtual experience where you learn about their brands in a more interesting way, uh, as long as it's immersive. So that's technically a metaverse experience cuz it's immersive. Roblox is a little bit more fun probably. I mean, I don't, you know, how much fun am I gonna have on the P and G uh, immersive experience? I might have a lot of fun. I don't, I don't [00:08:30] wanna, you know, poo that experience. Um, but they're all metaverse, it's, that's really just the virtual piece of it. I think what you're also asking though, will a few of them be, be more places people go versus others, that's Speaker 1: It? Because people go there because people go there, right? It's the class of formula for great restaurants and a whole lot of other things, and Speaker 2: It's gotta be fun and it's gotta be, uh, a, a good experience. That's also where brands can come in and actually ruin an experience. Right? You don't wanna be, um, someplace [00:09:00] where now all you're seeing is a lot of advertising. You're not getting value out of it, or you have, uh, something like a Minecraft where a lot of children are, you have parents saying, Hey, wow. Uh, what was that for around doing there, talking to my kids about X product. I'm not all right with that. So I think that's also gonna dictate to your point, Brian, do these things get cordoned off? Is there sort of an adult version? Is there a younger version right now? [00:09:30] Those, um, differentiations don't exist? Speaker 1: So we talked, uh, a little earlier about the idea of it being broad and niche at the same time in terms of its appeal, metaverse technology. And one of the things I think that would be a huge limiting factor is if you need to wear some kind of headgear or goggles to partake in it, uh, my hunch and I want to get your check on this is that metaverse will be perhaps as readily consumed on flat screens, laptops, phones, [00:10:00] and tablets, as on headsets. And that, that in fact, the headset will remain verified and the regular screen will be where we do most of it. Or do you think that's not immersive enough? Speaker 2: So just as a futurist and somebody who's been looking at technology adoption for years, um, I am going to air on the side of no gear, um, because the easier, and the more frictionless the experience is, um, that the less expensive the technology is, that's where you're gonna see the growth. [00:10:30] So on a phone, on a, uh, laptop, um, it's gonna have to get on a handheld device very quickly. The gear might still be very appealing for some people that might be, um, you know, the Ferrari car versus the, the Acura. They're both incredibly, uh, useful and good at getting you places. And you love the experience in them, but different. Speaker 1: Yeah, that's interesting. The maybe for the, um, for the deepest, most passionate experience or for the occasional time, when you say, you know, what [00:11:00] I really want to drop in and go deep on this, here's a concert I absolutely wanna be at as opposed to look at, I guess, I don't know. I have a hard time with, with anything that people have to put on their face because consumers have a hard time with, they have to put in their face. People don't even don't even wanna wear glasses. They'll go and have someone aim a laser in their eye or cut their cornea to avoid wearing glasses, not me. And, and, and now, and yet we're asked them to put something much bulkier on their face that can sometimes cut off their awareness of the world around them. [00:11:30] I just think it's a huge steep, uh, mountain to climb to say, metaverse is gonna equal headgear folks, get ready for it. Speaker 2: Brian, you know, I came out very strongly against the proliferation of 3d printers, um, and said they're gonna get relegated for very special things. Um, and I thought they're gonna be very useful in healthcare. Here's another area where I think the headset is going to be very useful for engineers, um, future of healthcare potentially, but from a gaming everyday perspective, [00:12:00] or I wanna just drop in and chill out and have a social experience. You're not gonna wanna suit up necessarily. Right. I, I don't believe that that consumers and humans, the way we are today are going to default to the headgear part. Speaker 1: Yeah. I will just make a little bookmark, as I suspect you will too, is an asterisk on PE on, on people that are literally four years old right now. Maybe they will get so in, uh, inured to this that they'll say, oh yeah, that's, that's what I do. I always wear something [00:12:30] to go in, uh, interchange with, but I, to be, I need to be convinced of that. Speaker 2: I do too, because, um, if you think of early gaming and, and a really great gaming experience, you had the cans, right? Like you, you had to have those big cans and the, and the microphone and more and more, we're seeing those get smaller and smaller, or the quality of sound is being amp, uh, around the player. Yeah. And not necessarily on the headset. So again, we keep moving away from [00:13:00] this. Now somebody might make a great headset that you barely feel, and, and then it doesn't feel cumbersome, but I'm, Speaker 1: We'll see, haven't seen it yet Speaker 2: Possible. Speaker 1: Yeah. Haven't seen it yet. No, one's cracked that code yet at the very best you can get a little bit of very rude AR in glasses that look like something Clark Kent would wear. And that's still a long way from everyone saying, oh, I want that. Uh, yeah, no. Uh, in general, what do you think, uh, gimme some idea of some things that you and your [00:13:30] agency struggle with today that are just the nature of media that you'd like, see metaverse solve for, we've probably touched on several of them, but we do have a shopping list that you would say metaverse and metaverse companies solved for this, that we've never been able to do as well as we'd like on behalf of our brands. Speaker 2: Oh, sure. Brian, um, gimme Speaker 1: Another one. No pressure. Speaker 2: Let's see. Oh, um, I would argue that one [00:14:00] of the biggest challenges and we all aspire to this is that we wanna be creating value for consumers, and you can argue how the, how are you doing that with advertising? Um, but I believe advertising is a very important function of letting people know what is possible, what is out there, um, something that might get them excited in the morning. Um, so advertising has a really important place in, um, the discovery phase of products [00:14:30] and services that will make our lives better. So now how do you do that in a way that somebody doesn't, they're being sold to? So metaverses has the opportunity to do that, but I, I think the, the way that brands and clients think of their advertising budgets would have to change because the cost of a build out of an experience may not have a direct commercial component to it. But the value of the experience has, [00:15:00] has a monetary value to a brand or service. Um, just how you're gonna measure. It's gonna be longer term. It's gonna be more emotional. Speaker 1: I remember some of the early VR come conversations I had with various people, working for brands, uh, revolved around empathy. That if you, maybe, if you see a car on a flat screen television, whatever it may be your phone, okay, it's there it is, looks great. But if you were able to go and walk around that car, you have a, a sense of empathy. Not, not the empathy we [00:15:30] normally think of, but a, I guess, connection because you've, you've been to it or you've been around it. There's something about physical proximity that turns humans on. Do you think there's anything there? Speaker 2: I think there is. And, and, and that goes back to one of my first comments, what, at the end of the day, the technology that sticks, uh, is technology that works with innate human behavior. As humans are evolved today, we do still like to experience things, touch things, feel, things, smell things. I [00:16:00] mean, small vision would be the, the ultimate in a metaverse right. And it would always have to be cinnamon buns. Um, Speaker 2: I, so you can simulate that, is it, is it absolutely the same as of getting in the car and having the new car smell and feeling it not as much, but you do feel like you've experienced it a little bit deeper. Um, and that does ping something in the brain, right. We, you know, not to get too neuro, um, sciencey and I'm, I'm not a neuroscience, but I like to ask them these questions as well. Uh, it's [00:16:30] hitting us in a different way in its experience in a different way. There's power also in bringing this metaverse virtual world into the real world experience. So imagine a retail experience. Um, and it'll, and it'll just be a very simple one, like trying on, um, clothes in a store. If you know that outfit is something you want to wear a concert, or that outfit is something you're thinking about wearing at a picnic or at a wedding to be able to simulate [00:17:00] that virtual experience in store might give you a better understanding of how that outfit's gonna work in that experience. So I think there's also value there for brands to be thinking about these opportunities, um, not necessarily to go into the virtual world, but how to bring it back out to make it a better retail experience, um, in real life. Speaker 1: And that's interesting, cuz I know, um, uh, you know, furniture, clothing, cars, there's sometimes hard to portray in their full [00:17:30] dimension literally and to, and in a way that gives me confidence. I'm always amazed that Wayfair can sell as much furniture as they do on the internet. People are buying sofas on the web who would've believed that even 10 years ago. And the web was plenty mature then. Yeah. But let's face it. We, we do it and close, not no kidding. And we're on the cusp we're at not for some franchise laws, we'd have even more online vehicle sales. So I think, I think consumers have the appetite for it, but boy would sure. Help if I can feel a little bit more like I walked around it. Right? Speaker 2: [00:18:00] Yeah. And Brian, this is not a here nor there, but I mean, we forget that, um, Ikea was one of the very first companies where you could have that AR VR experience. Right. You could hold, huh? The, your phone up and you could project the, I mean it was Pokemon, right. You could project the couch into your space. It was a little clunky, but you're like, oh yeah, wait, I see that couch on my space. I mean, that feels like it was eons ago and it might have been, it could have been almost 10 years ago. Speaker 1: Wayfair came a little later. They did a little, little nicer job [00:18:30] with it as well. But the idea that that is a little early taste of metaverse I think is, I think is accurate, although that you could also just call that augmented reality, but this is all a continuum I I'm trying to, I'm trying to avoid segmenting all these things and say, AR is this VRS, this metaverses, this, it sounds to me like it's one cauldron and we just have a label for it now, but is perhaps a little more cohesive metaverse Speaker 2: And I think that's also why when talking to clients, it is a catchall and the very first thing we have to do. And, and, and it's absolutely the group [00:19:00] M stance. The very first thing we have to do is start pulling apart those pieces. Um, and making sure everybody's aware of what the differences are so that a client hand get a better handle of, are they gonna move into this? Uh, what do they need to do that? Um, and what are the, what are the, what's the upside? And what's the downside. Um, and what's their appetite for risk because if you go full in, um, there could be a lot of risk. I mean, there's a financial risk cuz there's a spend involved. Um, [00:19:30] and to the points we're making earlier, you wanna do it in a way where you're not annoying the communities that are already there because they are also very protective of their experience. Speaker 1: Yeah. I, I mean, what do you think about this? Uh, as we wrap up here that, you know, a brand that leaps into a new technology too soon and too UN thoughtfully can to your, to your word, uh, annoy people and kind of make its brand look less wise, maybe, uh, is there, is there [00:20:00] anything to that, that, that tells brands take it easy on this metaverse stuff don't race into it unnecessarily or is there, you know, first mover advantage? Speaker 2: The answer is yes to both. Yeah. I think the brands gonna be first movers are the ones that are usually first movers. Um, Speaker 1: No, that's interesting. They kind of have it in there, have it in their DNA that they know how to, and they're willing to deal with the risks involved. Speaker 2: Yeah. I mean, if you had told me it would've been Gucci, I, I would probably would not have called that if you tell me P and G and [00:20:30] Nike, I would've said that makes sense to me, right? These are both brands that understand a consumer first experience are willing to risk things, have enough, uh, dollars to do that and intelligence to do it in a way that makes sense. I love that Gucci was there. I mean, it also goes to, um, because how your avatar shows up is so important because it's an expression. Um, and they understand that they are an expression brand. I wouldn't go in with only knowing 10%, I would [00:21:00] go in knowing 80% and then which, Speaker 1: Which is, which is about all you can know at any time about a fast emerging platform anyway. Speaker 2: Yeah. And the best marketers, uh, research, research research, and then lead with their gut. And I think that Speaker 1: Interesting Speaker 2: Is a hundred percent how you should be thinking about what do we do in this space? Speaker 1: Well, I remember how exciting it was to see the original internet grow up. So I think, uh, we're all gonna be lucky enough to see the next big, huge wave of immersion information [00:21:30] and connection. I've been talking to Jane lacker, she's head of group M growth for north America.