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“The metaverse may be virtual, but the impact will be real” -” so says Meta, the company formerly known as Facebook, in a striking new ad.

The 30-second slot shakes up certain notions of what the metaverse -” which VICE Magazine roughly sums up as “a place parallel to the physical world, where you spend your digital life” -” could be. It shows surgeons-to-be practicing virtual operations and students witnessing dramatic historical reenactments. The picture it paints is in stark contrast to the idea that it’s just “the second coming of Second Life.”

This might leave publishers and advertisers scratching their heads about where their place is in all this, especially as brands are already investing in the metaverse. However, there are some early signs that give us a glimpse of the future.

What will advertising look like in the metaverse? 

Nobody has a crystal ball, but the answer largely depends on what the metaverse actually becomes. Right now, some say it doesn’t even exist yet, and while Meta’s Mark Zuckerberg foresees a singular, unified metaverse, others envision it as more of a galaxy of different metaverses that may or may not be connected.

“If current tech industry trends are any indication,” Stephen Shankland, a senior reporter for CNET writes, “the future will instead be a multitude of fragmented digital domains, each its own separate shard of the metaverse experience.”

In either case, there’s plenty of opportunity for programmatic advertising -” which accounts for 85% of all digital ad spend in the US -” to live on. “Put very simply, programmatic is buying digital advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them, often in real time,” Kenneth Kulbok, programmatic sales lead EMEA at LinkedIn Programmatic, explains in the magazine Marketing Week

A future for programmatic ads in the metaverse would be good news for publishers, especially since sales of these ads have been booming. Here are three ways programmatic advertising could become even more effective in the metaverse:

  • Eye tracking” could provide whole new metrics for engagement. Tiny cameras could tell publishers what ads gain a user’s attention and how long they look at them -” that’s a treasure trove of data. 

  • Mini documentaries could be viewed in VR, with ads served by publishers. 

  • If there are many different metaverses, there’s an opportunity to “link” between them.

While a brave new world of programmatic advertising sounds exciting, the possibilities raise even more questions, including a big one:

Can ad tech actually adapt to the metaverse?

Whatever form the metaverse takes, it’s clear that ad tech needs to evolve before publishers and advertisers -” or any other companies -” can take full advantage of any new possibilities. Here are four current challenges:

1. Privacy concerns: Sure, eye tracking shows promise for hyper-targeted ads, but it raises privacy concerns. Consumers have shown how much they value privacy -” it’s part of what’s helping kill third-party cookies

Now, the American Civil Liberties Union warns that “privacy-invading” eye tracking could be used to detect drug and alcohol use, sensitive health info, sexual preferences, and more. If consumers didn’t like third-party cookies, what are the chances they favor eye tracking?

2. Security issues: Malware incidents, including attacks with ransomware (a form of malware that holds user data hostage), surged 30% in 2021

“With widespread programmatic adoption, publishers lost a lot of control over the content of the ads appearing on their properties,” writes Gavin Dunaway, product marketing lead for The Media Trust. “To protect their brands, publishers need to employ tools to find and stop threats before they hit consumer screens.” The metaverse opens up a new door for bad-faith actors to try and expose vulnerabilities -” and creates even more challenges for publishers.

3. Technological limitations: Virtual reality still seems like what it is -” an imitation of reality. Experts anticipate that by 2030, programmers will be able to create digital worlds that will appear (and feel, taste, sound, and smell) completely real, but even then high costs could keep VR out of the hands of many.

4. Publisher uncertainty: To say that publishers aren’t enthusiastic about the metaverse would be an understatement. 80% don’t see a big future in the metaverse for their businesses.

Where could advertising take off in the metaverse?

Despite so many unanswered questions, there are early signs that some industries are going to adopt sooner than others. For example, while traditional publishers don’t yet see a meaningful place for themselves in the metaverse, video games are positioned to be at the forefront of metaverse advertising. 

Here are three reasons why:

  • Games already contain elements of a metaverse. For example, some create a virtual reality with real transactions, like how you can purchase cars and attend dance parties at a virtual nightclub within Grand Theft Auto or how Fortnite pairs with brands for in-game advertising.
  • Esports have strong opportunities for virtual billboards and commercials, like at real sporting events. The global esports market is worth $1.08 billion, and it’s expected to surge in value to $2.8 billion by 2028, according to research by SkyQuest Technology, a research and investment bank.
  • Video games attract younger demographics, who are more comfortable with the concepts behind the metaverse. 87% of Gen Zers play video games at least weekly. Born between 1997 and 2006, they’ve grown up in a digital world.

New tech: a cautionary tale

We’ve heard this story before. New tech is hyped up and then turns out to be a flop. Remember the initial launch of Google Glass? Nearly a decade later, people are still writing about the company’s inability to sell wearable tech to consumers. 

There’s a chance -” a not insignificant one -” that the metaverse suffers a similar fate, so publishers aren’t wrong to view the whole thing with skepticism. However, as with any potential disruption, they should be prepared. About 10 years ago, some were asking, “Is Facebook just a fad?

We all know how that’s gone.

Neil Rigby

Neil has been with Lineup since 2011, where he worked in the deployment team and as digital SME, before becoming the OMS & Digital Product Manager, bringing his considerable experience to the role.