According to its recent “Value Creation in the Metaverse” report, McKinsey & Co. projects that the metaverse could generate up to $5 trillion in impact by 2030. That’s equivalent to the size of the world’s third-largest economy. It’s no wonder brands are tempted to rush in! But before you do, consider the possible risks to both your brand and your customers.
Protecting Your Brand
It’s important to factor brand safety into your metaverse strategy. Some elements to consider include:
- Know Your Neighbors - Decentralized platforms, such as Sandbox and Decentraland, operate in an open ecosystem, allowing creators to contribute without governance. This would be like buying property in a county with no zoning—you have no control over who buys the neighboring parcel or what they build there. In an AdAge interview with Albert Thompson, managing director of digital innovation at Walton Isaacson, Thompson describes the risk like “Disney dropping into Times Square in 1997, positioned near seedy shops and littered streets.” In the real world, brands know the boundaries of “red light” districts, but in the metaverse, Thompson adds, “They have no idea.” Metaverse security consultants advise brands to consider engaging a metaverse real estate (MRE) partner to assist in leasing metaverse land prior to buying, allowing you to “check out the neighborhood” before purchasing.
- Be Proactive in Ensuring Brand Safety - Just like the internet, the metaverse has its share of bad actors. Its roots are online gaming, an environment renowned for bullying, racist language and harassment. But fear not—decentralized platforms can use community monitoring to prevent hate speech as well as inappropriate content. Because the community governs the space, bad actors and their platforms can be voted off the island. You can mind your brand’s digital footprint by using smart contracts, which are pieces of code stored on the blockchain that define the rules and expectations of your community. If a prospective community member does not meet those criteria, that individual is denied access to your virtual space.
- Maintain Brand Integrity - Brand dilution is a concern, especially for luxury segments. A designer dress might retail IRL for $5,000 but one could purchase that same digital gown in the metaverse for fifty cents to dress their avatar. The risk is derailing the brand image at its core.
Glitchy applications, such as the process for building an avatar, can also impact the user experience, diminishing brand image and consumer engagement. As you develop customer engagement initiatives in this space, think through potential outcomes.
Protecting Privacy in the Metaverse
Part of protecting your brand includes safeguarding your customers. According to the McKinsey & Co. study, some areas that require consideration and guidelines include:
- Data Privacy - Retaining control over individuals’ personal data is paramount. New types of personal data collected by Extended Reality (XR) technologies could threaten personal identity and privacy if security is underdeveloped. This data includes eye tracking, sensor data and room mapping. The availability of this type of personal information relies on the goodwill of the recipient to make ethical choices in its use.
- Security - Protecting individuals’ security extends from cybersecurity and identity theft to payment processing. While smart contracts and digital wallets help, there are still holes in this developing space. Consider NFTs—copyright infringement is now an emerging issue. Counterfeiters can create forgeries of popular projects and sell them in the same marketplaces as the originals!
- Ethics and Regulatory Compliance - With all of its potential, the metaverse gives rise to social and societal impacts to think about. While it is our moral responsibility to be good metaverse citizens, communities must curate content and take measures to prevent the use of online anonymity to commit crimes.
As more consumers pioneer the metaverse, policymakers, businesses and brands must be fully aware of brand safety, personal data privacy issues and general customer safety concerns. The opportunities are indeed vast, and advance planning to countermeasure potential safety issues is well worth the effort.