Sure, take your brand to the metaverse… but build it in the real world

Author: Colin Horan, Strategic Partner at Clear Channel

Despite the emergence and obsession with digital innovations, marketers and brand managers must seriously consider the implications of losing real-world visibility with customers writes Colin Horan, Strategic Partner at Clear Channel.

The online world has grown exponentially. There are now well over 1 billion websites offering experiences, information, products and services and more. But the biggest expansion in recent years has been online shopping. The boom in ecommerce, exacerbated further still by the pandemic, touches everything - clothes, groceries, cars. The internet is now one of the primary places we do our shopping, and almost all new businesses are born online.

Digital innovations across cloud computing, blockchain and more are opening up new opportunities for online experiences, and there is a growing obsession with new kinds of digital spaces. Take, for example, the metaverse. In August 2021, Mark Zuckerberg announced his vision for the metaverse as the ‘successor to the mobile internet’. Since then, every advertising event or industry publication has been filled with talk of the metaverse.

The metaverse

Organisations with the cash to spend have been quick to climb aboard. Manchester City FC announced earlier this year that they were launching in the metaverse, by recreating a digital Etihad stadium so that even more fans could virtually experience live matches and the club could therefore grow their global brand. But nothing compares to those experiences that exist in the real world – I was lucky enough to get tickets for Man City’s thrilling Champions League semi-final against Real Madrid back in May, and even though I’m not a City fan, it was an experience I won’t forget.

These experiences have become even more special since the pandemic forced many of us online to buy and experience things we would normally seek out in person. We are more keenly aware than ever of the importance of real-world experiences. The joy of being out there shopping, eating and drinking, seeing friends, and going on holiday isn’t something that can be perfectly virtually recreated. So, before brands look to conquer the digital world, they should consider whether they have a significant real-world presence. They should build their brand in the places where people physically go to spend their time and seek positive experiences.

How physical presence drives sales

When it comes to digital brands, there is an increasing subconscious assumption that the buyer journey usually starts and finishes online, resulting in an over-reliance on digital media. According to the IAB, it’s predicted that 74% of advertising spend in the UK will be on digital media in 2022. But we must not ignore the importance of brand-building in the places that are meaningful to people, within their communities.

Studies show people who live near a physical store are more likely to visit that brand’s online store, in part because of the awareness and trust generated by its physical presence. It’s been proven that retailers can expect their online revenue to be more than double from shoppers within the catchment area of the store.

Physical presence need not always come in the form of brick-and-mortar stores. Brands can use public advertising to maintain a visual presence in the real world, whether it is via billboards, bus stops, or in shopping malls. This is a tactic that has been used by some of the UK’s biggest retail brands as their number of brick-and-mortar stores dwindle or altogether disappear. For example, when Debenhams were bought by the Boohoo group and moved fully online, they needed their customers to maintain awareness of the brand and know that it still exists, so they dialled up their out of home presence.

It’s also something we see happening in reverse, with digitally native brands moving into the physical world to reach new audiences and build greater brand awareness, through opening physical stores or inviting customers to in-person experiences. Polestar is a good example of this. The premium electric car brand started out with a purely online direct-to-consumer sales model but has since opened a physical space in the Trafford Centre, which allows them to raise their profile to the 35 million visitors to the mall each year.

The importance of real-world trust

Building brands in the real world creates more than just familiarity – it builds trust. Trust in a brand is something that is fundamental throughout the entire customer journey: 81% of consumers say trust is a deciding factor in their purchase journey… but only 34% of consumers say they trust the brands they use. This becomes more crucial for e-commerce, with consumers having less trust in online shopping versus in-store.

Building brand trust begins early in the customer journey, long before they set foot in a store or click through to a brand’s website. We live in a very noisy world of abundant news, advertising, and messaging through so many different channels. Simultaneously, concerns about accuracy have been on the rise. It’s never been more important for brands to deliver honest, reliable, and trustworthy advertising.

Research shows that public broadcast channels are seen to be more trustworthy by consumers versus other channels, with YouGov reporting that 28% don’t trust online advertising at all. One factor behind this is that public broadcast channels are more heavily regulated since their messages reach mass audiences and there can be serious risks associated with spreading disinformation. But there is a more relatable, psychological reason behind this. If I claimed to one friend that I was going to run a marathon for charity, I would feel much less guilt and accountability for not going through with it versus if I had stood standing up in front of a large group of friends, colleagues and family and claimed the same thing.

The mass reach of public broadcast channels has the same effect on brands: it builds trust among their audience through the implications of mass accountability. It’s no surprise, then, that online-born brands like Cinch and Gorillas, who are disrupters in their respected category, are using Out of Home advertising to build trust and familiarity in local communities to compete with big supermarket brands that have a long-standing physical presence.

Why brands need a combined approach

Online advertising absolutely still has an important role to play in building brand awareness and driving sales, but this medium is changing. Digital targeting is becoming much more expensive and is increasingly more difficult to do, particularly with Google planning to remove cookies in the not-too-distant future. But building a strong brand in the real world will drive digital performance, as it effectively primes consumers to think more positively about a brand when they come across it in the digital world.

The pre-established awareness and trust created in the real-world increases online engagement, click-through rates and direct-to-brand journeys - reducing the heavy-lifting that can be required by the likes of paid search, which can become costly if over-relied on.

One online retail business that has been tactical in growing their brand awareness in the real-world is N Brown Group. I spoke to Sam Walker, their Group Head of Marketing, who leads on a portfolio of brands including Simply Be and JD Williams. He said:

"We’re not in the business of simply trading websites, we’re in the business of building brands our customers love and return to again and again. This means balancing our brand, our performance investment, and establishing a presence in the real world as well as digitally. The fascia’s alone of our bricks and mortar competitors give them the very real advantage of visibility.

"We need to be in the same places our customers are to stay front of mind. Critically, it reaches beyond our existing customer base and helps us generate top of funnel awareness from new customers, reaching beyond those online who are actively in-market – complementing our performance channels and helping make them more effective.

"Out of Home is an important channel for us to make a bold statement in the real-world, publicly in the cities and communities where real people are."

As more and more online-only businesses emerge and the make-up of our high-street evolves, marketers and brand managers must seriously consider the implications of losing real-world visibility with customers, both existing and prospective. There are so many creative ways to retain a foothold in the physical world, through events, experiences, and advertising.

The value of community engagement must not be overlooked, and while emerging online communities may look attractive to target, there are important conversations to be had about the psychology of engagement in the real versus virtual worlds.