Facebook Founder Mark Zuckerberg has announced the company will rebrand to Meta and foster massive ecommerce opportunities in the virtual world.
The move confirms his vision to shift the company's focus away from a social networking platform to one that connects people through virtual reality within an ecosystem known as the “metaverse.”
Like Alphabet’s subsidiaries Google and Waymo, Meta brings together its apps including Facebook, Instagram, WhatsApp alongside the metaverse, which it is spending billions of dollars to bring to life.
“The next platform will be even more immersive — an embodied internet where you’re in the experience, not just looking at it. We call this the metaverse, and it will touch every product we build,” Zuckerberg said at the annual Facebook Connect event on October 28, 2021.
Facebook’s share price closed 1.51 percent higher to $316.92 after the announcement.
This blog examines what the metaverse is and its potential implications for local businesses and agencies.
What is the metaverse?
Zuckerberg said the metaverse is the “next evolution” of how people will experience the internet.
In essence, this means individuals will each have their own avatars -- an icon or figure such as those currently used in chat forums and video games -- to represent them in a virtual world.
A person would use their virtual reality (VR) or augmented reality (AR) headset to control their avatar to interact with other people and businesses online in a more immersive way than currently possible.
Zuckerberg showed examples of how friends from across the world could connect and play chess, cards, surf, and cycle together in the metaverse. Rather than using a mouse or keyboard and playing games through a website or app, people would be able to move using VR or AR technology.
The metaverse also aims to blend in virtual and real-world experiences. For example, a person in California may be attending a rock concert in person and invite their best friend who lives in Japan to join them virtually.
Zuckerberg also intends for workplace collaboration to be a key pillar of the metaverse. Instead of virtual meetings that people usually attend using their respective laptops, a team could sit together in a virtual office using their avatars.
“The defining quality of the metaverse will be a feeling of presence — like you are right there with another person or in another place,” he said.
“Feeling truly present with another person is the ultimate dream of social technology. That is why we are focused on building this.”
What does it mean for agencies and local businesses?
As with Facebook, Zuckerberg said he was relying on a massive audience of social media users, local businesses, marketers, content creators, developers, and many other interests to make the metaverse economically viable.
This means allowing different parties to conduct many of the activities they currently undertake on Facebook and Instagram, including spending on digital advertising, allowing software developers to sell games, and collecting fees on ecommerce transactions.
According to Vishal Shah, Head of Metaverse at Facebook Reality Labs, the metaverse heralds an evolution in how people will interact with businesses and advertising.
“Businesses will become creators and build out digital spaces. They’ll sell both physical and digital goods, as well as experiences and services,” Shah said.
“They’ll be able to sell ads in far more contextualized and targeted formats to ensure the right customers find their products and services.”
New business models
For instance, Shah said a local beauty business based in the United States could serve digital ads via the metaverse to people all over the world to attend a launch party of its new lineup of makeup products.
Interested consumers could attend the event as if they were there in the shop, interact with the owner and employees, and then purchase products for real-life use from within the beauty shop’s ecommerce capability in the metaverse.
“The metaverse will remove many of the constraints that we see in commerce today and make entirely new businesses possible,” he said.
He added local businesses could sell products for virtual use. For example, a local designer could create fashion garments for people’s avatars in addition to their physical bodies, creating two revenue streams from the one design.
While ecommerce and other concepts in a metaverse context are still in their infancy, Zuckerberg expects advertising and revenue opportunities for businesses to grow significantly over the next decade.
“We expect to invest many billions of dollars for years to come before the metaverse reaches scale,” he said.
“Our hope is that if we all work at it, within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars in ecommerce, and support jobs for businesses, developers, and creators.”
For now, marketing agencies will have to wait and watch for more details on digital advertising and ecommerce business models in the metaverse.
But it may be worth having a conversation with your local business clients about what’s coming, and how they could capitalize on opportunities in a virtual economy.