What draws a brand to Roblox over Fortnite? How can brands harness Zepeto’s rapid growth in the West? These were just two of the questions asked during metaverse data platform Geeiq’s webinar on Tuesday, which dived into the mechanics behind the significant rise in virtual experiences last year.
As blockchain-based metaverse destinations took a back seat last year, luxury’s biggest players charged ahead with establishing a presence in more lucrative domains, contributing to an uptick in growth across user-generated content (UGC) gaming hubs like Roblox and retail spots such as Emperia – in Q3 of 2023 alone, Geeiq recorded a 67 percent rise of new experiences in virtual platforms.
As competition and consumer demand in these virtual environments swell, brand strategies and approaches are evolving.
Comprising speakers from metaverse and gaming leaders including Atlas Creative, Dubit, and Sawhorse Productions, the webinar offered insights on the opportunities for brands in virtual worlds, which platform data brands are investing in, plus the industries set to dominate virtual worlds this year.
Jing Daily rounds up the key takeaways for brands below.
Can Fortnite catch up with gold standard Roblox?#
According to Geeiq’s latest report, 106 new brand-owned experiences and integrations were activated in Roblox during Q4 of 2023. But what’s behind the platform’s popularity? Charles Hambro, CEO and co-founder of Geeiq, believes that the quality of experience in Roblox surprasses that of Minecraft and Fortnite, which is prompting more brands to utilize the space as their first choice.
In Fortnite, for instance, there remains a number of fundamental limitations that Roblox can deliver on.
“You can't sell items, it's very hard to monetize, and you can't reach a vast audience because it all depends on where you are in the category channel on the epic store. A lot of these things put together make it quite difficult for brands to justify a Fortnight experience,” Hambro says.
While Roblox remains in pole position, Megan Cheong, account director at Geeiq, predicts that Fortnite in particular will start to see an uptick in attention as brands diversify their sources of revenue.
“I think Fortnight in general is very attractive to brands, because it's a name that I would say most people mainstream audiences they're very familiar with,” she says.
Nic Hill, co-founder and Head of Interactive at branded content studio Sawhorse Production, the creative team behind Alo Yoga’s successful Roblox activation, echoes this sentiment.
“The one reason why we always gravitate toward Roblox is the numbers are massive and the region of impact you can have is really strong,” he says. “But there are other platforms out there that have very specific target audiences. I'm super excited about Fortnight and it's an area that we want to grow in.”
Long-term vs short-term brand integrations#
The majority of brands entering spaces like Roblox have previously opted for campaign-focused integrations over persistent experiences, Hambro says. “I think integrations are definitely the most cost-effective solution to entering a platform and receiving user feedback,” he adds.
Cheong also points to these temporary projects’ accessibility. “It lowers the barrier of entry for brands who are looking to test the waters for the first time and get some concrete results,” she says.
This year, however, Hambro believes brands should consider a longer-term approach to building audiences in these ecosystems. While short-term ventures do have their advantages, Hambro likens the strategy to that of an Instragam-native collaboration, where a brand will partner with a celebrity for a limited number of stories and posts; while it may draw initial attention, there is a notable lack of permanence that a more persistent experience would provide.
“I think every brand should ultimately work towards a persistent experience because, that way, you can own the user base a little bit. It's like if you are partnering with Kim Kardashian and doing an Instagram story, you're getting those eyeballs for a period of time for a marketing message, but no-one can follow you if you don't have a profile,” says Hambro.
Shifting brand expectations#
As the digital landscape matures, brands are redefining the metrics and KPIs they use to measure success. Matthew Warneford, CEO of Dubit, a game development studio that has worked with Adidas and H&M, highlights that while UGC platforms host millions of players per day, categorizing their behavior and engagement into measurable outcomes remains a challenge.
“The one question is how do we evidence the value around the time that is spent in these spaces,” Warneford says. “Because if we can then show that by spending x amount of minutes inside of an experience, there's a real world uplift. That's the question we keep getting asked – how do we measure return on investment, or return on objective?”
Sawhorse’s Hill also believes that brands need to be more realistic about their roadmaps. Creating an exciting, high-fidelity experience doesn’t guarantee high engagement in today’s widely saturated climate. “People are becoming more realistic, knowing that it's harder to hit those numbers,” he says.
The cost economics#
During their peak, brand integrations in UGC platforms like Roblox gained widespread attention, fueled by hype and novelty. Now, after that initial excitement has diminished and more brands are entering the space, strategic marketing is crucial for activations to outshine competitors.
Hill believes that brands should allocate more funding to promoting their marketing.
“Marketing is more important than it used to be, and there's a cost associated with that,” he says. “If you're building a brand experience that is considered marketing, you have to market that marketing to make sure people go there.”
In the same way brands optimized their Web2 strategy to accrue followers, putting virtual experiences on their radar requires a similar effort, Hill says. “There’s a lot of things you have to do to incentivize users to come and make sure they're aware of what you build,” he says. “When building an experience, you can't just build something creative; that's only 50 percent of it. The other 50 percent is, how do we let the world know and ensure that they're going to participate?”
Likewise, the length of an integration can significantly influence budget allocation, says Warneford at Dubit.
“The challenge for brands is to think how long am I running this for,” Warneford adds. “If it’s a six-week long campaign, marketing might be a smaller percentage than perhaps a 12 month long commitment, where you have to keep driving people to generate awareness.”