A convergence of advertising in physical & metaverse retail

Gen Z (the first generation of digital natives to grow up with fully global and data-driven technology), is estimated to make up 27% of the US population by the end of 2022. As this segment continues to mature and their share of the population increases, they will have increasing influence and buying power.

What does this have to do with the metaverse? As the world reconsiders how we shop, a recent Forbes article revealed that Gen Z is set to lead retailers into virtual environments. While shopping in metaverse will be a much richer experience than today’s online shopping experience, the shoppers are likely to demand a consistent experience across the physical and metaverse stores. Retailers are going to want to ensure ad opportunity placements in their metaverse stores remain aligned with the placements with their brick-and-mortar counterparts. For the advertising industry specifically, the time is here now for marketers to pay attention to the cross-universe ad activations that the channel will soon offer.

Attention remains a valuable currency. According to an IAB report, the attention span of Generation Z only last 8 seconds (that is 4 seconds shorter than that of millennials). Companies must be prepared, both strategically and technologically, to provide their younger customers with a seamless experience across multiple devices, including VR and MR glasses. For this reason, we will see brands and retailers devoting more dollars into metaverse digitisation because wherever consumer conversion is happening, brands will be there.

The interoperability between a physical store and a metaverse presence will become commonplace, just as the shift retailers today took to have brick-and-mortar stores operate consistently with mobile shopping apps. The natural question to ask is: where will budgets come from for advertising in retail stores in the metaverse? Marketers must find the right channels to drive precision and efficiency in targeting this impatient and hard-to-reach generation via their avatars within metaverse environments.

At its core, programmatic advertising helps marketers activate ad opportunities using automated technology and optimise their returns on ad investments. In the physical world, screens in retail stores or large billboards are able to make ad requests in real-time to ad exchanges, which then propagate the ad request to multiple DSP platforms. Even the largest DSPs are getting in on the action, with Google, The Trade Desk, Yahoo officially supporting DOOH buying. With programmatic digital out of home (DOOH) continuing to prove its agility and resilience, the ad tech infrastructure has the foundation necessary for success in metaverse environments, allowing advertisers to target avatar shoppers “in universe”.

The question remains, how would this work for DOOH “screens” that are virtual in metaverse retail stores? Our early research has found that the same ad request / response technology that powers physical screen monetisation can also be used for metaverse retail environments. Brands have already created stores within metaverse environments and Bloomberg predicts the market will be worth $800 billion by 2024. Although we are only at the very beginning of this conversation, the industry needs to start to think about the possibilities, as we believe they are endless.

Learn more about our vision of retail DOOH in the metaverse here.