Thesis Research Paper

The metaverse became increasingly more popular in the last few years, especially thanks to the increased awareness in the public caused by major corporations announcing new ventures into such an innovative virtual environment. Paired with increased popularity, technological developments in the sector now allow for new ways to interact with peers online and provide new immersive experiences for users. These technological developments are among the main reasons why the entry of this new media format into the mainstream is being facilitated. However, digital advertising within the metaverse and companies will be able to advertise their products in the metaverse is still a grey area with an important gap in academic literature. Given the current role of user data in the modern digital advertising sphere, several questions arise on how will companies be able to make use of these new virtual worlds to advertise, and which types of data they will be able to gather from their users in the process. With this paper, through the undertaking of ten semi-structured expert interviews, the most important business benefits that brands can achieve by advertising in the metaverse are explored, and how those should be balanced to avoid incurring in unethical behavior towards users is discussed. The results obtained allowed to understand how brand awareness, engagement, and loyalty make up the most important benefits companies can achieve while advertising in the metaverse, while user manipulation, surveillance, and privacy make up the most important ethical risks companies incur by doing so. Thanks to an identified shift towards more engaging and gamified interactions, obtained qualitative data highlighted in the metaverse a shift towards more implicit and experience-driven types of advertising content, more effective at increasing user attention and engagement, both helpful in increasing brand awareness and loyalty through hybrid phygital interactions between brand and customer. However, these trends pose significant concerns related to advertising awareness in more protected user groups such as children, and the increasingly more subtle nature of digital advertisements in the metaverse poses risks that companies in Europe are likely to avoid by applying strict compliance to current and upcoming regulations. An overview of the most important suggestions identified by the experts is provided at the end of the paper to aid both European and non entities to apply the identified solutions in their metaverse advertising strategy.