On Outside In last week, we covered the 2nd Part of a two-piece coverage on the ‘Nudges from Nudgestock 2022’ here at:
In that piece, we have raised a ‘post alert’ on the psychology of the metaverse and what opportunities exist today for brands to leverage this medium for their growth. Thanks to a paper released at the same event, we are in a position to summarize an insightful ‘Behavioral Science (BeSci)’ perspective on the Metaverse. Here we go…
First, the definition of Metaverse
Considering this will be first post of its kind on the Metaverse by Outside In, I thought it was a good idea to at least get a basic definition in place – The Metaverse is a network of 3D and virtual environments, where people can interact and do things like manipulate objects, walking, chatting, shopping or attending a virtual concert, in real-time and on a 1:1 scale. It is part of the Internet’s 3rd Act: From Looking at (It) to being Inside (It)
It is supported by Better Technologies and Mature Applications
Behavioural Principles
How people experience technology determine how they behave – The evolution of the internet has led to changes in people’s habits, their expectations of brands, and revolutionized the way people keep informed and form opinions. It can be expected that developments in the metaverse will bring about similar changes as it fundamentally alters the way people perceive themselves as individuals and what groups they identify with
The Way the Internet evolves determines New Economies – Just as web 2.0 facilitated new business models and economies, (e.g. sharing economy, subscription economy, ecommerce), the Metaverse may facilitate new categories of businesses and economies too. NFTs, blockchain, crypto-currencies and virtual assets are only the first manifestations of this. This could have huge implications, not only for product innovation, but on people’s entire perception of value
The Behavioural Science (BeSci) Lens
While all this talk of the metaverse, NFT’s and Web 3.0 might seem completely overwhelming and impossible to understand, there is one thing that remains the same – human brains. Research suggests that behaviour and decision making is influenced by a series of unconscious structures and mental shortcuts encoded deep in human psychology and evolution. Therefore, through the BeSci lens, some predictions can be made about how the metaverse will impact society
Illustrations:
The “IKEA EFFECT”: People value objects they build themselves, more than objects that were built by others – In the metaverse, people will likely experience the same positive emotions toward things they build themselves as they do in real life
Gamification mechanics make it easier to reach goals and change behaviour for important tasks – the metaverse will introduce new levels of gamification in branded services and programs
In Web 2.0, features like customer reviews and star ratings have made Social Proof as one of the important ways to judge service quality before actually trying it – Decentralization and participation enabled by the metaverse will make social proof an even more reliable guide to judge the quality of digital products and services before trying them
The 6 Opportunities for Brands in the Metaverse Are –
1) Continuity of Data
In web 2.0, a technological device was used to explore the internet. In the metaverse, consumers are the technological device and every barrier is cancelled. They experience the internet with their body and senses. This new interface, combined with a virtual space where identity, objects, communication and payments happen even more seamlessly, will lead to an unprecedented continuous flow of data to understand people’s behaviour. This continuity of data reveals new opportunities for spaces and times in which brands can intervene
Implication – More Accurate Understanding of Consumers
Brands that exist in the metaverse will have access to more consumer data than they would have in any other platform. This will mean targeting could be made super precise and bespoke to the individual
Brand Opportunity
2) Constant Feedback
One of the key principles of Behavioural Science is feedback: having an “answer” to choices we make. It is a wide concept that has a deep effect on human behavior and can be activated via all human senses. In the metaverse, people will be able to receive feedback for every action that they take – for grabbing an object, for completing a task or speaking to a person/character. This feedback could come in the form of visual animations, or it could be through vibrations and tactile feedback from the controllers we use
Implication – Extremely Engaging Customers
As humans, there is a struggle to engage in behaviours that are only beneficial in the long run. This is known in behavioural science as “present bias”. One way to overcome “present-bias” is gamification. Adding points, streaks and real time feedback on behaviours can make any boring task feel fun and rewarding in the immediate term
Brand Opportunity
3) A Second Identity
The body one lives in affects the way the person thinks about the world, society and his place within it. In the metaverse, one can become anybody he wants. This may allow humans to shed many of society’s prejudices, help empathize with others, and even alter the perception of themselves
Implication 1 – Selling to Alter Egos
As people spend more time in their metaverse avatar, they may begin to identify more strongly with it and it may take on a whole new identity that is different to the individual who controls them. This will essentially lead to same person having 2 identities, with unique preferences, personalities and habits
Brand Opportunity
Implication 2 – Learning by Living
By make learning fully immersive and experienced from a first-person perspective, it can become really more engaging, and empathy can be experienced by literally walking in someone else’s shoes
Brand Opportunity
4) No Distance
The metaverse will effectively nullify distances between people, environments and objects. Immersive experiences will lead to new, more exciting as well as transparent ways to interact with real world
Implication – A Desire for Curation
As more real-life experiences become enjoyable as a digital product, consumers will have an infinite exciting ways to not only spend their money but their time. This could lead to “choice overload” for consumers, leading them to feel stressed when choosing what to do. As a result, there will be a large demand for curated experiences that are easy to navigate and choose from
Brand Opportunity 1
Brand Opportunity 2
5) Personalized Worlds
From the world of gaming and open worlds, the metaverse will be a world of total customized objects and environments. There will be ability to create a perfectly personalized world according to one’s mood, creativity and emotional needs
Implication – Re-defined Communities
Heightened levels of personalization could lead to a behavioural principle called “confirmation bias” coming into play. As a result, people will increasingly seek out and spend more time with communities who they identify with and less with the communities in their immediate surroundings. Communities will increasingly cluster around ideas and interests, rather than geographical locations
Brand Opportunity
6) Digital Wealth
Influenced by the world of cryptocurrencies, the metaverse will give birth to a new, decentralized type of economy, with a totally different sense of independence and accessibility to value assets. With both rational and emotional value of products and services changing with virtualization, the perception of value will change too
Implication – A Tough Balancing Act
As humans we naturally sort our money into various buckets to make financial management easier for ourselves – like rent money, holiday money and so on. BeSci calls this approach as “mental accounting”. In the metaverse, people will need to open up many more mental accounts, as they will need to allocate their funds both toward real life expenses, and their digital counterparts
Brand Opportunity
In Conclusion
To summarize, the 6 Opportunities for Brands in the Metaverse are:
Continuity of Data – Provide better value proposition to your Consumers
Constant Feedback – Tap into the new era of Creativity, Health and Productivity
A Second Identity – Pioneer the market for Digital Status Symbols, Make Learning Fully Experiential
No Distance – Become an Entrusted Guide, Enable Fully Immersive Trials and Demos
Personalized Worlds – Benefit from Highly Targeted Communication Channels
Digital Wealth – Establish a Metaverse Revenue Stream
References and Sources
1) Nothing Changes, Everything Changes – in the Metaverse: https://www.ogilvy.com/ideas/nothing-changes-everything-changes-behavioral-perspective-metaverse