It’s been eight months since Facebook rebranded to Meta, but as our analyst Jasmine Enberg notes, “there won’t be a magical moment when we all suddenly enter the metaverse.”
Instead, entry to the metaverse will be a gradual transition, the pace of which will be driven largely by consumers, not advertisers. Still, the metaverse could provide fertile grounds for digital ad dollars, and Meta remains fixated on those revenues.
The company went all-in on the metaverse, with a massive beach-front installation complete with a Horizon Worlds experience, an interactive Reels Super Studio, as well as several other educational and immersive virtual reality (VR) experiences.
Why it matters: “A lot of businesses are already stepping into the metaverse and they don’t know it,” Bridget Evans, head of business marketing for Instagram Shopping, told us in an interview. “The purpose of our activations is to help businesses understand what the metaverse can mean for them.”
The global VR headset market saw growth by 241.6% in Q1 this year, with Meta owning 90% of the market with its Quest headsets.
But it’s unclear if the company can keep up amid economic headwinds. Hardware, like VR headsets, is the key to metaverse adoption; software is the key to retention. This makes it challenging for any one company to create affordable headsets while developing new and compelling use cases for VR and AR.
Despite its metaverse push at Cannes, Meta’s chief product officer Chris Cox warned staff that the second half of 2022 will be very challenging for the digital advertising leader, according to an internal memo reported on by Reuters.
The Cox memo suggests Meta will focus on what works, like a new Instagram feature that automatically converts video uploads into Reels, and less so on long-term projects, like its metaverse ambitions.