Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Watch here.
If we strip away the hype, the metaverse can be defined as “the large-scale societal shift from flat media viewed in the third person to immersive media experienced in the first person.” While this hones the concept down to just its core features, the implications are still profound. That’s because the metaverse will fundamentally change the role of the user from an outsider peering in to an active participant having firsthand experiences.
The rapidly approaching shift to immersive media will impact almost every industry, but few will be transformed as dramatically as marketing. That’s because the tools, techniques, and tactics of digital advertising are currently rooted in flat images, documents, and videos. In the metaverse, the core marketing methods will change to immersive experiences that are far more natural, personal, and interactive. This will hold true in both virtual and augmented worlds.
The Metaverse represents the largescale shift in digital media from flat content viewed in the third person to immersive content experienced in the first person.
Because of its deeply personal nature, Immersive Marketing has the potential to be far more persuasive than traditional methods. It also poses significant risks to consumers, as immersive tactics can easily be abused through predatory practices. In the paragraphs below I describe the two core techniques likely to dominate marketing in the metaverse, Virtual Product Placements and Virtual Spokespeople, outlining the uses of each and the dangers that could emerge.
Virtual Product Placements (VPPs)
In the metaverse, advertisements will be deployed as promotional artifacts and activities that are injected into immersive environments on behalf of paying sponsors. These VPPs will be narrowly targeted at individual users, meaning they will be encountered by specific people at specific times and places. For example, if you are a sports fan of a particular age and income level, you might see a simulated person walking near you down the street (in a virtual or augmented world) wearing a shirt that promotes a high-end sports bar two blocks ahead of you.
Because this is a targeted VPP, others around you would not see the same promotional content. Instead, users near you will encounter different promotional artifacts customized to their profiles. A teenager might see people drinking a particular brand of soft drink, while a child might see a group of kids playing with a particular toy. Some of these encounters might be highly stylized, while others will be so accurately integrated into the virtual or augmented world, that they will not be easily distinguished as advertisements. VPPs can therefore be defined as follows:
Virtual Product Placement (VPP) is a simulated product, service, or activity injected into an immersive world (virtual or augmented) on behalf of a paying sponsor such that it appears to the user as an integrated element of the ambient environment.
Such advertising can be extremely impactful because consumers will encounter the promotional content as organic experiences integrated into their daily life. For the same reasons, VPPs also have the potential to be abused by advertisers if not regulated. That’s because Virtual Product Placements will become so realistic and well-integrated into immersive worlds that they could easily be mistaken for authentic experiences that a user serendipitously encounters. If users cannot easily distinguish between authentic experiences and targeted promotional content, advertising in the metaverse could easily become predatory, deceiving users into believing that specific products, services, or activities are popular in their community (virtual or augmented) when in fact they are observing a promotionally altered representation of their surroundings.
Avoiding predatory tactics
Taken to an extreme, you could imagine walking down a virtual or augmented street filled with political posters and banners supporting a particular candidate. You might believe that this community is highly supportive of that candidate and not realize that what you are seeing is targeted propaganda. In fact, you might be entirely unaware that other people walking on that same street are being targeted with posters and banners for alternate candidates. This is the danger of promotionally altered experiences, as it could amplify social divisions, driving people from their current information bubbles to entirely separate but parallel realities.
For these reasons, consumers should be protected from predatory uses of virtual product placements in the metaverse. A simple but powerful protection would be to require that all VPPs look visually distinct from organic experiences. For example, if a virtual product is placed in your surroundings as a targeted advertisement, that product should be visually distinct such that it cannot be confused with authentic artifacts that you serendipitously encounter. The same is true for injected activities and other targeted promotional experiences that could be confused by consumers.
If regulations are put in place to require visual distinctions, consumers would be able to easily tell the difference between authentic encounters and promotionally altered experiences. This is obviously good for consumers, but it’s also good for the industry, for without such protections users would likely cease to trust anything they encounter in the metaverse as authentic.
Virtual Spokespeople (VSPs)
In the metaverse, promotional content will go beyond inanimate objects or silent characters to AI-driven avatars that engage users in promotional conversation on behalf of paying sponsors. While such capabilities seemed out of reach just a few years ago, recent breakthroughs in the field of Large Language Models (LLMs) and photorealistic avatars make VSPs viable in the near term and likely to be deployed widely in metaverse platforms. It can be defined as follows:
Virtual Spokesperson (VSP) is a simulated human or other character injected into an immersive world (virtual or augmented) that verbally conveys promotional content on behalf of a paying sponsor, often engaging the user in promotional conversation.
VSPs are likely to target users in two distinct but powerful ways — (1) by passive observation or (2) by direct engagement. In the passive case, a targeted user might observe two virtual people having a conversation in the metaverse about a product, service, or idea. For example, a simulated couple could be placed near a targeted consumer in a virtual or augmented establishment. The target may assume these are ordinary users, not realizing that a third party injected those virtual people into the environment as a subtle form of advertising.
For example, the targeted user might overhear the couple discussing a new car they purchased, touting the features and benefits. The user might perceive those comments as authentic views of other users and not agenda-driven promotional content. Similar tactics could be used to convey any promotional message from touting products and services to delivering political propaganda, or even overt disinformation. And because metaverse platforms will likely collect detailed profile data about each user, the overheard conversation could easily be algorithmically crafted to trigger very specific thoughts, feelings, interests, or discontent in targeted users.
Persuasive (but not undercover) VSPs
For these reasons, regulation should be considered to protect consumers from predatory tactics. At a minimum, regulators should consider requiring that promotional VSPs be visually distinct from authentic users (or avatars controlled by authentic users). This would prevent consumers from confusing overheard conversations that are targeted promotions with authentic and unaltered observations of their world.
Of course, VSPs will be most persuasive when directly engaging consumers in promotional conversations. The verbal exchange could be so authentic, the user might not realize they are speaking to an AI-driven conversational avatar with a pre-planned persuasive agenda. As mentioned above, recent advances in LLMs have made authentic conversations with AI agents viable in the near term, especially when discussing casual topics.
In addition, it’s important to stress that these AI-driven conversational agents would likely have access to detailed profile data collected by metaverse platforms about each targeted user, including their preferences, interests, and a historical record of prior promotional engagements. These AI agents will also have access to real-time emotional data from facial expressions, vocal inflections, and vital signs of targeted users. This will enable the AI agent to adjust its conversational tactics in real-time for optimal persuasion.
Custom crafted VSPs
Even the visual form in which these AI-driven virtual spokespeople are presented will be custom crafted for maximum persuasion. It is likely that the gender, hair color, eye color, clothing style, voice and mannerisms of VSPs will be custom generated by AI algorithms that predict which sets of features will most effectively influence the targeted user based on their previous interactions and behaviors. I depicted this 14 years ago in my cautionary book about the metaverse, “Upgrade.” The characters in the graphic novel were targeted by VSPs that were made to look more and more sexualized by an AI system that determined the tactic to be an increasingly effective form of influence. While this was written as ironic fiction over a decade ago, without regulation I fear we are now very close to it becoming reality.
For all of these reasons, the potential for predatory advertising tactics is significant and likely requires regulation. At a minimum, regulators should consider requiring that virtual spokespeople be visually distinct from authentic users within immersive environments, thereby alerting consumers that the conversation is targeted promotional content rather than an authentic encounter. In addition, it could be a dangerous practice to enable AI systems to custom-target the appearance and voice of virtual spokespeople for optimum persuasion on specific users. This type of AI-driven manipulation should be regulated.
In the past, experts have expressed doubt that AI-generated avatars could successfully fool consumers, but recent research suggests otherwise. In a 2022 study, researchers from The Proceedings of Natural Academy of Sciences showed that when virtual people are created using generative adversarial networks (GANs), they are indistinguishable from real humans to average consumers. Even more surprisingly, they determined that users perceive virtual people as “more trustworthy” than real people. This suggests that in the not so distant future, advertisers will prefer AI-driven virtual spokespeople as their promotional representatives.
Whether you’re looking forward to it or not, the metaverse is coming and will impact society at all levels. Marketing tactics will become deeply immersive and will employ AI technology for optimal persuasion. For these reasons, we must consider regulation as a means of protecting consumers from predatory tactics. For example, regulators should consider requiring that VPPs and VSPs be visually distinct from authentic products, services, and persons in immersive worlds.
I don’t come to this recommendation lightly, as I’ve been involved in virtual and augmented reality for over thirty years, both as a researcher and as a founder of multiple companies. I’m a true believer in the potential of immersive media. But without meaningful regulation, nothing would protect users from immersive promotional encounters that are mistaken for authentic experiences. In addition, I firmly believe consumer protections would be good for advertisers and platform providers, for without sensible guardrails, users in the metaverse would be unable to trust the authenticity of any experience. That would damage the industry at all levels.
Dr. Louis Rosenberg is a pioneer in the fields of virtual and augmented reality. His work began over thirty years ago in labs at Stanford and NASA. In 1992 he developed the first mixed reality system at Air Force Research Laboratory. In 1993 he founded the early VR company Immersion Corp (public on Nasdaq). In 2004 he founded the early AR company Outland Research. He has been awarded over 300 patents for VR, AR, and AI technologies and is currently CEO of Unanimous AI, the Chief Scientist of the Responsible Metaverse Alliance, and the Global Technology Advisor to the XR Safety Initiative (XRSI).
GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.