Investing in the Metaverse: What CMOs Need to Know

In the past few years, the metaverse has attracted staggering levels of investment. In 2022, companies and investors poured over $120 billion into metaverse-related projects – more than double the total of the previous year​. Tech giants are making bold bets: Meta (Facebook) has reportedly spent over $60 billion since 2020 building its metaverse vision​, and other players like Microsoft and Epic Games have invested heavily in platforms, content, and hardware. This rush of capital has been driven by FOMO and the belief that immersive digital experiences could be the next frontier of the internet.

However, not all investments have yielded immediate payoffs. Meta’s own metaverse division, for instance, has incurred multi-billion dollar losses annually as it develops VR hardware and virtual worlds​. The broader market also experienced a reality check: by 2023, valuations of some metaverse assets like virtual land and NFTs contracted sharply after an initial boom. This sobering phase has taught investors and executives that while the metaverse opportunity is large, returns may take longer to materialize and will favor those with strategic clarity.

Why the Long-Term Potential Remains Strong

Despite short-term setbacks, the long-run outlook for metaverse investments remains optimistic. Analysts project that the metaverse economy could be worth trillions of dollars by 2030, spanning sectors from entertainment to retail to education. Early corporate pioneers have gained valuable experience and brand recognition by engaging in virtual worlds. Many compare the current state of the metaverse to the early internet – a period where patience and vision were required before mainstream adoption unlocked massive value. For CMOs, this means that completely ignoring the metaverse could be a missed opportunity to get ahead of a transformational trend. The key is prudent investment: calibrating spending to be proportional to evidence of user engagement and business relevance.

Furthermore, metaverse development is driving innovation in related fields (like AI, graphics, and network infrastructure) that have standalone benefits. A dollar invested in experimenting with, say, VR shopping might yield insights into consumer behavior that inform your other digital channels. And if/when the metaverse reaches a tipping point of adoption, those insights and early brand footholds will translate into a competitive advantage.

Strategic Considerations for CMOs

1. Start Small and Learn: Rather than betting the farm, CMOs should consider pilot projects in virtual worlds to test what resonates with their audience. Small-scale activations or partnerships can yield insights without heavy sunk costs. For example, collaborating with an existing platform or creator to host a branded event can be more cost-effective than building a whole new virtual experience from scratch.

2. Align with Business Goals: Treat metaverse initiatives as part of your broader marketing and customer strategy, not just a gimmick. Are you trying to reach a younger demographic? Launch a virtual product that drives e-commerce sales? Provide immersive customer support or training? Investments should have clear objectives and KPIs attached – whether it's engagement metrics, lead generation, or direct revenue. A metaverse activation might be deemed a success if it boosts brand awareness (measured by press impressions and social mentions), even if direct sales are modest. Clarity on the “why” ensures you invest for strategic impact, not hype.

3. Monitor Metrics and ROI: As the metaverse matures, measurement tools are improving. Ensure any investment comes with a plan to track results. Metrics might include user footfall in a virtual store, time spent with your branded experience, or social media buzz generated. Over time, comparing these figures against the costs will help determine ROI. Remember that ROI may not just be about immediate sales – intangible benefits like brand innovation perception and earned media have value, too. Notably, lack of clear ROI is a top reason 32% of marketers remain hesitant about the metaverse. You can assess outcomes objectively by defining success early (e.g., “We aim to gain 50,000 new leads via our virtual event”).

4. Stay Agile and Informed: The technology and user behavior in this space change quickly. Keep abreast of industry trends (e.g., new popular platforms, headset adoption rates, regulatory changes) that could impact your strategy. What worked last year might not work next year. Being ready to pivot – whether scaling up a successful experiment or pausing an underperforming one – is crucial. Encourage your team to spend time in virtual worlds to understand evolving user norms. Also, monitor competitors’ forays: their successes and missteps can inform your approach.

Conclusion

For CMOs, investing in the metaverse comes down to balancing vision with pragmatism. The allure of a new digital frontier must be weighed against the realities of adoption rates and technical hurdles. By taking a test-and-learn approach, tying initiatives to business value, and keeping a long-term perspective, marketing leaders can navigate the metaverse investment wave wisely. In essence, treat the metaverse as you would any emerging market – with due diligence, strategic intent, and a willingness to adapt as the landscape evolves.