What’s the role of an ad agency in the metaverse?

Ocean Outdoor’s metaverse billboard

Metaverse is the buzzword of the moment. Brands are falling over themselves to be a part of it. But how are these early iterations shaping the future of advertising within these spaces? What role are agencies playing here? And do we trust the industry to not clutter another digital space with ads? We take a look as part of The Drum’s Metaverse Deep Dive.

To define what advertising might look like in the metaverse – and what the role of ad agencies might be within that – we need to first understand the two current states of play. You can read more about the platforms defining the metaverse here, but in essence there’s one camp home to the likes of Roblox, Fortnite, Meta and Horizon – with roots in gaming, they are familiar spaces with more defined rules of play for brands and clear rewards set by the corporate owner. It’s immersive and social with a well-trodden path for marketers to turn it into an advertising or shopping experience. Brands like Vans, Gucci and Nike are simply digitizing the real world and putting it into the virtual.

Then you have decentralized platforms; a wild west of creators, land-owners, communities trying to create their own economies. The role for brands here is unclear – and for some, unwelcome.

“Purist would say the mistake the internet made is that it had no business model other than advertising,” explains Tom Hostler, head of brand experience at Publicis.Poke. ”So, the [decentralized] metaverse is going to be fandom based, community based, and shared spaces where everybody earns and creators are rewarded. Advertising is not needed as everyone will get micropayments for their efforts and an economy will be created.

“As most things in life, I think it will be a blend of two models. A more gaming led way where brands need to learn to talk with users, and the other way where they’ll create communities on an equal basis with them. The only way to understand it is to get your sleeves rolled up and get stuck in.”

Hostler says Publicis.Poke is “exceptionally curious” about this space. He and colleague Andy Dobson, head of technology at the agency, are spending more and more time both in the established worlds of Roblox et al as well as the decentralized communities to understand where brands might fit.

Here’s where they’re at: “Defining the role for advertising? We don’t have an answer for that. Defining the role for brands is easier – they belong in these spaces but they have to be there in a different way than display advertising around content.

“They need to be much more participative, collaborative and understand the culture and be able to reflect the culture. Whether that will take the form of what we currently think of as an advert is hard to say. I think it will be closer to brand activations and experiences rather than the classical sense of display or video.

“We’re fielding a lot of interest from clients. But we’re very keen not to trip up or have any embarrassing moments within these spaces. We’re still figuring it out.”

One agency that’s already figured out its place is Metavision. It launched last year with the backing of broadcaster ITV and claims the crown of the first specialist agency for the metaverse. It set its stall firmly in ’brand experiences’, prioritizing work on established platforms and has already partnered with the likes of ITV, John Lewis and others to craft experiences.

“We position the brand in an authentic way that feels seamless,” explains co-founder Luke Price. “It doesn’t interrupt the game play – that’s core to the ethos. In these spaces, it’s important for brands to be seen as facilitating the experience, unlike with the early days of mobile when it was interruptive.”

Then there’s Ocean Outdoor, the global OOH media owner. It is carving out a path away from the established metaverses of Fortnite, Roblox and Horizon and trying to work directly with metaverse creators. Last year it made headlines when it auctioned three NFT Billboards that were snapped up for over $100,000 by so-called ’land-owners’.

Say you own land in Somnium Space, a decentralized metaverse. Much like in the real world, you’ve invested in that piece of digital land thinking the value in time will go up and you’ll sell for a profit down the line. Or you can somehow commercialize it. One way to now do that is to have an Ocean NTF site on your land. Of course, anyone could build a ’digital billboard’ on their piece of metaverse land, but how do they then go about selling that to a brand?

“With the Ocean Outdoor NFT you’re essentially buying the right to the screen and the back end process of having us as the sales agent to go out and sell that ad space to brands,” explains Phil Hall, its joint managing director in the UK. “We’re bringing the experience and the contacts.”

Ocean Outdoor has effectively set itself up as an ad agency and media owner for the metaverse. It has plans to build a dedicated team to service these potential metaverse clients. For the time being, regular real-world sales agents are in meetings with brands as we speak offering them ad space in London, Paris, New York and… Somnium.

“We’ve been inundated. We’ve been bowled over by people wanting to talk to us. We’ve had major brands, virtually the minute the announcement came out, asking to be involved. We’re bullish about it.”

Regulation

Metavision’s Price and Publicis.Poke’s Hostler both agree that – much like the surge in specialized social media agencies we saw a decade ago – there will soon be a raft of metaverse agencies that brands could opt to work with, as well as dedicated divisions in every major media agency.

While Fornite and Roblox have limits to what advertising looks like and the role for ad agencies within in that, in decentralized worlds like Somnium there’s no limit to how many digital NFT billboards Ocean Outdoor – or any other media owner, agency or creator – could appear on land. And this vision of an open and libertarian metaverse could quickly become cluttered.

“No restrictions exist, but this is about us being responsible,” says Hall. ”Everything about the metaverse is decentralized and the last thing we want to do is create too much clutter and noise – partly as it’s the right thing and partly as, if there’s too much, brands won’t stand out and get the results. If we clutter, we’ll devalue our product.”

Which begs the question whether the ad industry be trusted not to mess up the metaverse. Does it need some kind of real-world body to help brands and agencies navigate this new terrain responsibly?

The resounding answer is ’no’.

“[The metaverse] is so nascent that it would be putting cart before the horse,” says Hall. ”If we all act responsibly then we won’t need that. I don’t think it’s necessary.”

“Ultimately, it’s an eyeballs business,“ adds Price. “If an environment is overly commercialized then users won’t enter that space. The market can almost self-correct.”

For Hostler, it’s “horribly too soon“ to lock things down with one organizing body. He says: “We need to experiment without constraints to find out where the limits are, what we can do and where we need rules. If we put rules in now, we’ll base it on the previous paradigm. We won’t fully understand the power and creative opportunity of this new world. But if you leave these worlds truly open and unpoliced then it could be a difficult and confusing space.

“I believe people like brands, they like things that can help them get the most out of their existence. It’s when brands are clunky that it gets annoying. We do need some elements of conduct in there but we also need space and time to grow and understand.”

For more on the exciting new opportunities for marketers in this rapidly evolving space, check out The Drum’s Metaverse hub.