Companies Making Real ROI In the Metaverse with Jason Lovell

Transcript

Nick Abrahams:

Ladies and gentlemen, welcome back. Today we are going to unpack the Metaverse and I know there’s a lot of talk out there around the Metaverse and it’s often very difficult to understand what is real and what is just fiction. Because I think as someone said, that science fiction writers are actually writing the textbook for technology companies to follow. And in fact, the world where Metaverse comes from famous science fiction books Snow Crash. We know that the Metaverse is at the forefront of a lot of people’s thinking and I’m delighted to welcome on today’s show Jason Lovell, who is in Metaverse strategy at PwC and based in Austin. Jason, welcome to the show.

Jason Lovell:

Hi Nick. Thank you very much for having me. Yeah, I’m delighted to, I think you’ve hit the nail on the head there with that intro. Yeah, looking forward to discussing the wonderful world of the Metaverse.

Nick Abrahams:

Yeah, fantastic. Now Jason, I feel like we are immediately thrown into the Metaverse because you are based in Texas. That doesn’t sound like a Texas accent to me.

Jason Lovell:

That is correct, Nick. That is correct. I have had the pleasure of moving to Texas from London a couple of months ago now. I was based, working for PwC UK in London for the last few years, heading up strategy and biz dev for around VR/IR, the Metaverse. Yeah, it’s been an adjustment for sure. Yeah, I’m kind of driving alongside trucks that are bigger than my house, which is an interesting one, but [inaudible 00:02:00]-

Nick Abrahams:

It’s not London anymore.

Jason Lovell:

No, certainly not. But I’m really enjoying it. Everyone’s been very welcoming. Yeah, I’m really enjoying the kind of challenge of the market here and working with my US colleagues, so it’s been good.

Nick Abrahams:

Fantastic. Well, now maybe to jump into it, so as you sort of foreshadowed there, you’ve been in the XR space for a long time, you’ve had a number of different roles, your own consultancy, et cetera. You’re a leader in that space. Can you just explain what is XR, AR VR, what are all these terms and why do people need to care?

Jason Lovell:

Yeah. Well, firstly Nick, it’s very kind of you to call me a leader because I’m not even a leader in my own house. That’s very kind of you.

Nick Abrahams:

It’s very sensible.

Jason Lovell:

Yeah, yeah. No, it’s a terrific question. And I think if I had a dollar for every time I was asked this, I would be a very wealthy man because really I think this comes to the crux of where we are right now with this whole kind of Metaverse movement if you like. And as I’m sure you’re aware and your listeners are well aware that the Metaverse term has really caught fire, I guess over the last 12, 18 months. Obviously a lot of it’s because of Facebook’s rebranding and some associated quite grandiose predictions in terms of the size of the market and in terms of this kind of vision for what the future of the internet means. And I think as great as this excitement is and as great as the hyperbole is in terms of getting people aware of the term and getting people thinking about the future of our digital lives, our digital experiences, I do also think that what it has led to is a very … A lot of our people, a lot of our clients being really confused as to where they even begin to understand this stuff.

It has led to confusion in terms of how people are trying to demystify what this really means for them and their organizations and even where they begin to explore this, all of these terms that are being thrown at them. I do think that as great as it is, and I haven’t really in my career, seen a term kind of take off so quickly like the Metaverse has. And just as a quick intro, I actually started my career in mobile before smartphones. The team that I was in launched the first ever Android smartphone in the UK for T-Mobile back in 2007, 2008. And I kind of rode that smartphone wave and I saw how smartphones just changed the world almost overnight. And I got into things like smart home and connected audio and IoT and tablets and wearables. Then launched the first ever VR headset, the Gear VR at Samsung in the UK in 2015/2016 and saw the hype around that. I’ve always been around excitement around emerging tech.

Nick Abrahams:

It feels like there hasn’t been a buzzword that you haven’t been involved in leading a project on.

Jason Lovell:

Well, there you go. Maybe I’m just a buzzword in myself. Maybe that’s [inaudible 00:05:11]-

Nick Abrahams:

Shiny new thing.

Jason Lovell:

Yeah, just all fluff. I guess the point I’m making in a elongated way here is that I think that the term, and for me the Metaverse term has all of the underpinnings of it, the foundations, all of the themes that are going into the Metaverse, A lot of these are not new. They’ve been around for a long time. VR, AR, AI, blockchain, all of this stuff has been around. VR, AR has been around for a long time in terms of very validated use cases in terms of training and collaboration and recruitment and onboarding and all of this good stuff. AR has been used for a long time for a multiple of use cases. Virtual worlds, a year ago they were just called games, right? These virtual world platforms. We’ve been using virtual worlds of some sort to collaborate since the ’70s really.

I think what what’s really happened is that a lot of these technologies like the stack if you like, a lot of these just come together at such a time that they’re synergizing at such a time that this kind of grandiose vision, this utopian vision of what a future internet looks like doesn’t seem so fanciful. Because we have great connectivity, we have spatial computing, we’ve seen big advancements in hardware, we have greater economy, we have great kind of experience platforms, low code tools, 3D development tools, all of these have come together at the right time such that it has really got people thinking about the future.

But again, I think the challenge is that inside of that you have terms like XR, Web3, all of these things get wrapped up. A lot of clients come to us and say, “Look, please help us understand where to begin with this stuff. How do we work out what is the Metaverse? What is XR? What are game engines?” And for me, and at its kind of broadest sense, the Metaverse is just the synergizing, it’s the … What’s the best way of describing this? It’s the kind of joining of the physical and the virtual. It is looking at the kind of experience layer in terms of our digital experiences and what we do. The experiences that we have inside of these virtual worlds and it is the transactional layer in terms of of all of the plumbing, the underpinnings of all of this. And for me that really takes the form of the internal experiences of the Metaverse that have been around for a long time in terms of more B2B stuff around training and collaboration and the stuff I’ve talked about.

But then of course you have the more externally facing customer transformation, customer engagement tools that I think people are becoming very excited about. And of course they take the form of many, I guess what we would call closed or private environments such as Roblox or Fortnite or Minecraft or some of the closed internal Metaverse tools. Then of course this big excitement around the future of these open decentralized worlds that are obviously offering a lot of promise in terms of sandbox and Decentraland. But I do think that that Matthew Ball hit the nail on the head here when he’s asked to define what the Metaverse is, he says, “Well, if people are asked to define the internet, the definition of the internet is TCPIP, it’s internet protocols.” It actually makes more sense to describe it in terms of describing what these experiences will look like.

And I think a lot of that really comes down to defining or describing, sorry, what all of these things will mean to our lives. And I think one thing I try to do with all of our clients is try to help them get into that kind of more descriptive mindset of actually trying to describe what we’re trying to achieve with all of these tools. What is the ultimate purpose of all of this? Rather than being so narrowly defined to a definition. Because as I’m sure you’re aware, there is a lot of conjecture around what is Metaverse, what isn’t? Like some people are very steadfastly stuck to the Metaverse being this big open, interconnected space where we will spend eight, nine hours of the day.

Other people are kind of saying, “Well, the Metaverse is just VR.” Other people are saying, “Well, there’s no Metaverse, it’s all AR.” You get my point. And I think all of this doesn’t really serve any purpose other than to confuse people. I think it makes much more sense to try and describe what the future of these experiences look like and what that means. And that might encompass things like digital assets and NFTs and the blockchain. It might not. It will depend on what these experiences look like and the ultimate value of these to people’s lives.

Nick Abrahams:

It’s fantastic. It is interesting, the sort of arguments, particularly on Twitter I find, everyone gets incredibly carried away. You’ve got the zealots who see the Metaverse as you say, this sort of ethereal next level internet concept and who won’t broke any discussion that even gaming platforms like Roblox and Fortnite are Metaverse style experience. You did say something fantastic as well earlier on where you said, your digital life and maybe that’s a way of thinking about it as well, which is we have our real life if you like. Then our digital life. Lots of interesting thoughts. I guess maybe just dropping into, because I know you’ve worked in XR for a while now and you [inaudible 00:10:53] XR, so helping businesses harness the benefits of XR. And it seems like XR has some very sort of good use cases where it’s already deployed. I’m just wondering if we could talk a bit about where you see XR and also I guess the basis of XR. Are we talking headsets? Are we talking eyewear, augmented reality in some way?

Jason Lovell:

Yeah, yeah, yeah. No, great question, Nick. For me, obviously I started my journey into this with VR. I tried the first, I remember vividly being given the first ever Gear VR and I docked my notes in it and I was put in this … Well, actually I think the first thing I was shown was a rollercoaster, which made me violently ill.

Nick Abrahams:

They always love the rollercoaster. That’s the first thing a VR headset ever looks at for content.

Jason Lovell:

Exactly. And I think going back to my earlier point around being in all sorts of emerging tech. I’d seen many pieces of technology come along that were kind of like a hammer in search of a nail where people were trying to find the use case for the tech. The first thing I saw with VR when I tried it was to me it had that kind of Nintendo Wii effect of being more than just a new technology, being a new way of relating to tech. And I instantly started thinking about the fact that this immersion, this spatial presence, this embodiment allowed you to do a lot more. It allowed you to create experiences that were genuinely unique to the medium. I think that that’s really what stimulates a lot of the passion. If you look inside of the XR community, the Metaverse community, you’ll find a ton of people that have been in this world for a long time that are just massively passionate about the use cases that are unique to VR and AR.

And of course on the VR side, there has been examples, there’s loads of studies, there’s academia from Stanford and UCL and whatever from for many, many years, research that we’ve done around soft skills training and job simulation training. There are lots of very, very good examples of use cases around VR, where it is just genuinely unique to that medium. Good examples being work around, for example, content that we’ve created around diversity and inclusion training, for example. Utilizing the power of VR to change people’s perspectives, to alter behaviors, unconscious bias, microaggressions, things like that. Actually a lot of the whole of the UK firm is being trained on a piece of content that we created called In My Shoes, which is all designed to put you in the shoes of an ethnic minority individual in the workplace and allow you to build empathy and emotion around what that encompasses.

And of course this has been expanded to domestic abuse, to just a ton of different things. Then of course then you have lots of organizations expanding this and using it for all sorts of soft skills training, allowing you to practice difficult conversations, allowing you to be there with a virtual human and actually have those interactions with intelligent virtual being. Then switch perspectives and see how your behavior influences those people, affects those people and actually allowing you to see the consequences of those conversations. There are many companies now that are out there that are building suites of modules around this and also building low code tools that allow anyone to rapidly build and edit and deploy these modules. The barrier to entry has never been lower. Then of course you have examples of job simulation training where in VR you can build very rich immersive environments and allow people to practice scenarios that are very dangerous or sometimes impossible to recreate in the real world or sometimes very costly to do in the real world.

Inside of VR, of course you can create these virtual scenarios and you can allow people to practice and build this muscle memory over and over and over in a very safe controlled environment. But of course one that feels intuitive, it feels like you’re giving the user a tangible sense of purpose and of presence. And this has been defined over many years, there’s a multitude of organizations that are doing this now. What’s also interesting is that over the last couple of years, of course exacerbated by COVID, people are now seeing VR as a way of enhancing collaboration. We’ve been shipping headsets over the world for years now, bringing people into these rich virtual environments and allowing you and I, for example, we could be in a virtual environment, it could be anywhere, ski chalet, a beach, an office environment, whatever you want.

But we can be there as detailed avatars, have full spatial sound. And of course by virtue of the fact that you have freedom to move around and use your hands and pick things up, put things down. These virtual environments can be populated by images, whiteboards, videos, 3D models, browser windows, screen shares, whatever you want. And of course it’s become a very, very powerful way of allowing you to feel more spatially present with those around you and more intimate with those around you. That’s become a really, really cool use case. Then of course on the AR side, many examples of it being used for things like rich immersive digital twins. Again, job simulation training in terms of recognizing objects and giving you kind of step by step walkthroughs and things like remote assistance where you can see a remote expert can dial in from wherever they are, they can see what you are seeing, annotate the world around you, give you that guided feedback.

And there’s so many examples of that being a very, very valid use case that has demonstrable ROI. And I think for a lot of the work that we are doing and not just us across the industry, it does really come down to that. A lot of these projects in the past, as I’m sure you are well aware, Nick, people have utilized them. And we’re starting to see this in the Metaverse as a kind of flag in the ground. “We’re innovative, look who cool we are.”

Nick Abrahams:

Yep, absolutely.

Jason Lovell:

But at the end of the day, if there isn’t a clear cohesive ROI focused strategy behind it, all that ends up happening is you get a ton of headsets in a cupboard somewhere and no one can use them because no one’s thought about how you’re going to measure the-

Nick Abrahams:

[inaudible 00:17:13].

Jason Lovell:

… effectiveness. Exactly. How you’re going to build the business case, what you want people to actually do and achieve or feel or whatever when they put that headset down. The CFO then says six months, a year later, “What did we get for our investment?” Then you’ve got no answer. I think this is one thing we’re starting to see now in the kind of Metaverse world. We get clients coming to us saying, “Look” … Just to rewind slightly, my view of the Metaverse is that of course XR will be a key access mechanism. There will always be use cases where you want to be in the Metaverse in VR or AR. But my view is that will be dictated by the quality of experience that you have within that. For example, you might want to dive into VR to have a nice meeting or you might want to view a sports event in a virtual stadium or you might want to whatever, do some stuff where it makes sense.

But I do think that obviously virtual world based environments through desktop, through mobile will always have a very, very key role to play because you have accessibility, you have scope of access that you don’t have in VR right now. Of course you do have an AR, but it’s primarily mobile based. I think what happens a lot of the time is that clients come to us and say, “Look, okay, if we are building use cases, how do we begin to think about how we show the value across these? When do we use VR and AR? When do we use a mobile base? When do we use a desktop based virtual world? Can we build a virtual world that spans all of these? Do we want to be in platforms like Roblox that have 59 million active users? What is the difference between being in that world versus being in the Decentraland or the sandbox that okay don’t have as big user bases but they have more flexibility in terms of the economic models, the governance, the communities that are in them, and of course digital assets?”

Again, I think all of these have a massive amount of potential and there is value that you can extract. But again, without that kind of initial thought of what problems are you actually trying to solve, I think some of these implementations will always be shortsighted because it rapidly becomes a situation where just having a presence in these worlds or having a VR training application isn’t enough if you haven’t really thought about how you’re going to build, iterate, scale and actually measure the effectiveness of these things.

Nick Abrahams:

Yeah, and I get a sense of your enthusiasm for the topic. It’s fascinating. Maybe just trying to get a little bit more granular. It’s very interesting, particularly that idea of PwC using virtual reality it sounds like for diversity and inclusion training and that sort of makes all the sense to the world. Can you talk, I guess, about some specific use cases of companies in particular industries and how they might be particularly more in the Metaverse space, I guess, is there anything that you see … Because we see all these things. Burberry joined up with Minecraft to become a Burberry experience in Minecraft and I would’ve thought that’s a very unusual demo for them. But have you got any thoughts around some specific use cases? Who’s actually doing it well right at the moment think, or?

Jason Lovell:

If you look at the space now, I’m really fascinated by some of the activations that brands are doing inside of platforms like Roblox and Fortnite and Minecraft. And I know there’s conjecture around where they are actually Metaverse platforms or whatever. As far as I’m concerned, our clients, they want to understand customer engagement strategies, they want to know where the customer is. And right now you’re talking about platforms that have millions and millions and millions of daily active users. People are spending lots of money. I think I read that in Fortnite, the average users spends about a hundred dollars on digital assets inside of Fortnite.

Nick Abrahams:

Wow.

Jason Lovell:

[inaudible 00:21:28]-

Nick Abrahams:

They’ve got hundreds of millions of users.

Jason Lovell:

Yeah. We are being asked by our clients, “Where are the consumers? Who are they and where are they?” As far as I’m concerned, I am fascinated by how brands are saying, “Do you know what? W are going to represent our brand and our IP in a spatial sense inside of these platforms,” be it Roblox, Minecraft, whatever. And some of these ones you’ve seen things from Nike, you’ve probably heard of recent activations by Walmart. There’s just been a myriad of different experiences where they have stood up these very, very engaging immersive virtual world inside of these platforms.

You can go inside of them, you’re basically told a story. It’s really storytelling. You go inside these worlds, in the example of Nike Land, you can go inside of there, and my boys, I’ve got twin boys that are nine, they all go inside of their and they will go and they’ll play dodge ball or whatever it is. They’ll play all of these games with their friends. And of course in doing so, they then want to buy Nike shoes, they want to buy tops, they want to buy a Nike cap and they’re spending real money on buying these assets. And of course these assets have no value outside of the platform in question, but they are seeing so much social value in owning these items.

A great example I’m sure you’ve heard of is the Gucci handbag example inside of Roblox, where the Gucci handbag actually sold for more money in a virtual sense than the real one. And if that doesn’t tell people how important these virtual worlds are, then I don’t think anything will, because again, this kind of goes to the conversation that I know a lot of people are having right now about Web3 and the future of what ownership of assets looks like in the internet in terms of people owning rather than just renting really, inside of these closed platforms, these walled gardens. But ultimately it doesn’t really matter. Right now for a lot of our clients and a lot of brands that are looking inside of this space, they are logically saying, “How do we get the biggest bang for our buck in terms of eyeballs, in terms of getting people to understand our message in a new way and engaging in the next generation of consumers?” Gen Z, Gen Alpha, for example.

I’m fascinated by how people actually allowing, are building communities around their brands inside of these spaces and actually using new dynamics of representing their IP. You’ve seen with Nike and Artifact Studios actually allowing people to design their own sneakers and actually build their own, really manipulate Nike’s IP but in a controlled way. Because ultimately a lot of these worlds, they’re all user generated anyway. They’re all community driven. Whether you like it or not, your brand is going to be manipulated in these spaces. And I’m equally fascinated by what brands are doing in terms of buying land or at least indicating a desire to inside of some of these more open decentralized worlds. Because we know these have smaller user numbers right now and they are kind of more embryonic in terms of their UI and their UX and they’re obviously community governed.

But we are working on some stuff with clients now, which is all about how you actually use the ability, use that kind of decentralized nature to not only create very, very engaging virtual environments, but then actually create digital assets that give the customer some utility, some genuine utility. Not just in those virtual worlds themselves, but in the real world. Assets they can have in their wallets that allow them to do something different with that brand. And I think there’s an incredible opportunity for brands to build worlds that tell their story in a new way and make their brand relevant to consumers lives in new ways, but actually utilize the ability to build these on chain assets.

Actually not even always on chain. You can do it in the other worlds as well. But the point being that my view is that there needs to be some real thought and strategy, I think more than ever before now around what you actually want people to do with these assets, NFTs for example, and how you blend the physical and the virtual. Because I think is that is where the real opportunity lies.

Nick Abrahams:

You mentioned they’re the wallet and this is a fascinating area for me because if I look at there’s at least 300 or more brands who’ve minted NFTs and so forth, and this idea of the wallet, so right at the moment I can’t really see what’s in your NFT wallet because there’s no easy way to get access to it. I mean, it’s on the public blockchain, you can’t see mine because it’s not simple to get to it. Then Meta have the announcement that you’ll be able to link to your NFT wallet, so your MetaMask wallet from Meta or from Facebook or Instagram and so forth.

We’re starting to see other platforms making similar things. What’s the future of the NFT wallet? Because right at the moment it’s sort of sitting there and it’s got lots of stuff in it, some of it you bought, some of it gets airdropped in there. Is that a big marketing opportunity? The NFT wallet, does it become as curated as say your Instagram feed? What’s in your NFT wallet says something about you and you want to make sure you are showing the right face to the world?

Jason Lovell:

I mean, yeah. It can do. And we know these things are a [inaudible 00:27:11] machine, right? I mean, it’s public, if you know someone’s wallet ID, you can see what NFTs they own, which obviously will have its own considerations in terms of privacy, et cetera moving forward. My view is that there is obviously with anything like this, there are examples, there are good examples and bad examples of NFTs and what they’re being used for. My view is that as a digital representation of ownership of an asset, there is an incredible opportunity to allow people to have a wallet, have a NFT wallet that contains tokens. But tokens that become more than just … And I fully realize that a lot of the activations at the moment are more than just profile pictures.

They give you access to a community, et cetera, et cetera. But my view is that the challenge with NFTs at the moment is that a lot of brands will mint NFTs and they’ll do it for the publicity and I’m sure they’ll gleam some money out of it in the first instance. But of course if someone has an NFT wallet and they have bought an NFT from your brand, if you haven’t got a strategy behind what you want that to do on an elongated basis, all that then ends up happening is that every time that consumer opens their wallet, they have a constant reminder of how useless [inaudible 00:28:33]-

Nick Abrahams:

That you didn’t deliver on your promise.

Jason Lovell:

Yeah. Because it’s basically there in perpetuity, right?

Nick Abrahams:

Right.

Jason Lovell:

What we are and what our Web3 digital asset team are trying to say to our clients is that if you really think about the longevity of this, the value you can derive from integration of these things like giving … Again, going back to the point around if you allow someone to have these tokens and they are integrated into an open Metaverse platform, these tokens can give you unique access into certain experiences. Think of them as a key, a token access mechanism where you can actually allow someone to have longer term value from these NFTs, from these assets because you can actually allow them to have unique experiences or more tailored personalized experiences based on what you’ve got. Or you can allow someone by virtue of interacting with your brand in a new way inside of these experiences to actually have an NFT, be given an NFT, be given assets or maybe even level up assets that they already have.

And I think once you get your head around that and you start thinking about how the power of that, the underlying power of that and how you build a blueprint for adoption that allows you to test the waters, experiment with what’s possible and then have assets that grow with these platforms and mature with these platforms and maybe even start in the kind of closed world, the walled garden world and experiment and test there as well. We’re not saying it’s a one size fits all thing. But I also get that for a lot of brands that is a scary thing because it again, it is a completely new way of representing your IP and your brand and telling stories and of course there is a whole backend of what we call trust around governance and accountancy and taxation and legal aspects that need to go into how you actually even manage crypto, how you even manage the audit trail around these things. But I genuinely believe that the people that get this right are going to be the ones that are going to extract huge value for the Metaverse moving forward.

Nick Abrahams:

Yeah. And I mean, what you’ve laid out there is for any sort of entrepreneurs listening, a huge opportunity in terms of what I’m talking to clients about is you don’t have to be the company that opens the land in the Metaverse, but you are the company that is in the vendor community that’s helping those companies. Because there’s a lot of data that’s coming out.

Jason Lovell:

Yeah, absolutely.

Nick Abrahams:

That’s not going into anyone’s CRM system effectively right at the moment. Loads of terrific opportunities in the infrastructure plays behind all of this.

Jason Lovell:

And of course, sorry Nick, just to finish that point, the other point that I say to my clients is whether or not you believe in this big grand vision of the Metaverse being this huge interconnected interoperable space where we can freely move between and share our assets and our entitlements, and of course the vision of that is blockchain or distributed ledger underpinned, whether or not you believe in that or not, or whether you believe we’ll get to a kind of web 2.5 world where there’ll be elements of decentralization and we’ll jump from kind of server to server network to network like we do with the internet now, fundamentally the underlying trends that are powering all of this that we’ve covered, they’re not going away.

Whether or not you believe the Metaverse is a fad or not, these trends that are underpinning it, they are not going anywhere. You need to start thinking about at the very least, building your muscle memory for the future audience. Because as I keep saying, my internet, I’m 38, my internet is not my kids’ internet. It’s a completely different world and their expectation of digital experiences is different to mine.

Nick Abrahams:

Yeah. I mean, it leads into a great conversation just about demographics. And if we look at, we’ve talked about obviously sort of Roblox and Fortnite and some of the activations. We’ve got Apollo, Ralph Lauren just announced a big activation in Fortnite. You’ve got Elton John’s just gone into Roblox and then you’ve got Burberry in Minecraft. That sort of jars with my understanding of who the audiences are for those particular platform. Do you have a sense of what the demographic nature of those … Have I got it wrong? Are there older people playing Minecraft or is it the under 12s? Do you have a sense of those?

Jason Lovell:

Yeah, it’s a great question. And actually we recently launched a Metaverse … A study based on a survey. We actually surveyed, I can’t remember the exact number now. We put out a survey and we actually gathered the data around this. I can share the link with you, but there’s a ton of different questions in there. And one of them, we tried to capture the demographic in that and actually what we found is that I think it was something like 68% of consumers across the US and the UK who were interested in engaging with the Metaverse. kind of Meta adopters, those that have been actively engaged and those that are not yet engaged but want to be. We found that actually there were mostly Gen Zs, so 18 to 25 and Millennials, 25 to 40, and they’re interestingly those slightly more affluent consumers as well. Above sort of 65k household income.

I don’t think that’s an exhaustive study, but I think it’s probably indicative of some of the other research that’s coming out and reports from a lot of these brands around their audiences. I think recently Roblox came out with a study which was the 59 million number, but I think they said actually they’re seeing big growth in now above 24. I think there is a populous, I think that will depend on the platform in question of course. And I think obviously there is clearly an opportunity Gen Z and Gen Alpha style customers, iPad generation as I said, but I don’t think it’s exclusive to that. I think they’re actually seeing now a broader adoption as more and more brands are entering these spaces and also the quality of the experiences and the quality of the hardware improves.

Nick Abrahams:

Yep. I think just mentioning particularly Gen Z and the Millennials, so effectively that’s folks up to from 18 or thereabouts to 40. An important consumer demographic. There was a fascinating survey that came out from Coefficient Capital recently where they’d done … It was a legitimate survey and they asked a couple of fascinating questions and one was, “Do you feel more yourself online or offline?” And 45% of Gen Z and Millennials, so under forties, said they felt more themselves online and offline. And I mean, you’re obviously within that cohort, so that’s probably a little more understandable. But when I talk to clients about that number, people are blown away that because there’s a visceral proposition, which is how could you possibly feel more yourself online than offline? But the reality is for that cohort, they have lived with screens, they’ve lived with immersive experiences, social media and gaming. It’s a very different style of consumer and one which I suspect we’re not wholly prepared for. Would that be sort of a correct assumption?

Jason Lovell:

I couldn’t agree more, Nick. And again, I think it takes people a while to understand that a lot of this is about expression. Again, half of this kind of growth of these platforms is the community inside of them. It’s not just about when my kids, and even just my kids, like my friends and sometimes myself, when you go inside of these spaces, a lot of it is not even so much just about the experiences, the games, the gamification. A lot of it is about the community, particularly in some of these more advanced platforms where you’re actually, it’s so easy to allow people to create and disseminate their creations, right? And to monetize and to build, to construct and to share their message. And that’s the exciting thing about a lot of these, the brands that are doing this right, I think, are really tapping into that expression, that community driven aspect of allowing, actually being brave about allowing people to manipulate their brand in a way that makes sense to their lives.

Building that relevance and again, going back to my kids, they all come back and I can see they’re building emotional connections with brands based on the stories they’re being told in these worlds. And sometimes not even about the brands, about the creators. If a particular creator has built an experience inside of one of these worlds, they know that creator, they feel warm and fuzzy towards that creator. It’s completely changing the face of advertising, marketing, social, influencing, commerce, all of this is changing and okay, it’s not going to happen overnight. We’re not pretending it is, but it’s going to become much like social commerce is now, how easy it’s for people to buy without buying. They’re buying based on stories. I don’t even think that consumers now necessarily differentiate between channels. They see channels as being connected, right?

Nick Abrahams:

Yep.

Jason Lovell:

I see the Metaverse as being an extension of that and it will all blur, particularly those that are clever about this link between physical and digital. I think we are entering an age now where brands need to be very clever about the stories they tell and where they tell them and of course how they try and bring all this together and make it more cohesive rather than being sporadic and bitzy.

Nick Abrahams:

Yeah, that’s fantastic. We should let you get back to your day job because let’s face it, you’ve got two nine year old boys who are spending a fortune on digital assets and-

Jason Lovell:

They are [inaudible 00:38:47].

Nick Abrahams:

… we need to be able to fund that. But it’s been a fascinating insight there. I guess maybe just to leave with some thoughts, I mean, I know you’ve got clients coming in all the time asking about the Metaverse and so forth, do you have some hints I guess for organizations who are thinking about dipping their toe in and just wondering what to do?

Jason Lovell:

Discover, learn, test. Honestly, I can’t stress this enough. There is a lot of debate out there, there’s a lot of noise out there. Quite honestly, anyone who says they’re a Metaverse expert is a liar because there is no expert in this space right now. We’re all learning, this is moving so quickly. I really, really stress that organizations need to get impartial, holistic advice in this space. Test, build. We never say to our clients jump in head first straight away. We give them guidance around where to experiment, what hardware to try, what software to try, what platforms to experiment with. Experiment with minting an NFT, experimenting with exploring marketplaces. Go in, try and break things really, because I feel that the ones that do that and the ones that really start building this muscle memory will really get a very quick understanding of the low hanging fruit now and the value that can be extracted now.

And again, some of that can be on the internal B2B side and then they’ll get a very clear idea of how they can really start telling their brand story to consumers, both with platforms that exist now and platforms that are going to come along in the future. And of course they get an understanding of the hardware and the kind of household penetration of this stuff and where it’s going to go. Particularly just as a final point here, particularly in terms of the future of AR because I think the future of AR, particularly in terms of a head mounted sense, I think, and it’s going to be a whole separate podcast in itself, I think that is probably one of the most exciting areas of the whole of tech in the next sort five to 10 years.

Nick Abrahams:

Fantastic. Well Jason, thank you very much. Jason, Metaverse strategies at PwC, thank you very much for taking the time. It’s been fascinating and really appreciate your insights. Thank you very much.

Jason Lovell:

My pleasure. Thanks, Nick. Thanks for having me.