This article was written by Rishab Jolly Global Digital Director, Carat
While the world racing to keep pace with AI and new agents and models launching almost every other week, it’s worth revisiting how the Metaverse is quietly evolving in 2025. Once a buzzy catchphrase, the Metaverse has matured into a layered, evolving digital ecosystem that’s still being shaped in real time. For brands, understanding its trajectory this year is crucial. Is it time to double down, or step back?
The pandemic booster dose
The Metaverse first gained widespread attention during the COVID-19 pandemic when global lockdowns left people confined to their homes and increasingly reliant on digital devices. From virtual concerts to group streaming of live sports, and from remote work to online entertainment, consumer behavior underwent a pivot digital shift. At the same time, cryptocurrency and NFTs were gaining momentum with the rise of decentralized blockchains, allowing virtual transactions and ownership of digital assets (real estate, collectibles) to lay the foundations for metaverse commerce. Brands were quick to explore this emerging space. Nike launched Nikeland on Roblox, while Coca-Cola introduced its Zero Sugar Byte —early examples of how companies began engaging audiences in immersive virtual environments. The highest buzz for Metaverse occurred when Mark Zukerberg changed Facebook’s parent company name to META in October 2021 highlighting the priority shift for the company across virtual spaces and immersive experiences.
While many brands rushed to explore this emerging space, few truly understood the value of their activations for consumers, resulting in fleeting brand recall rather than lasting impact. This is where Carat makes the difference. We design for people, and in the Metaverse, people aren’t different, they're simply expressing new facets of their real-world identities. The needs and aspirations of virtual personas mirror those of their human counterparts. Understanding what matters to them is the key to unlocking effective, people-first Metaverse marketing.
New world order: Phygital all the way!
As mobility resumed, we all jumped outside for “revenge travel” leaving behind the virtual spaces we were once confined to during the lock down to a more normalized behavior. This shift impacted Metaverse, too, and while consumers were busy again outside enjoying the sunshine, tech companies and brands began to reassess their strategies and the future direction of their Metaverse investments.
Between 2023 and 2024, leading tech companies made significant advancements in foundational technologies for the Metaverse. Apple introduced the Vision Pro, pioneering spatial computing with its immersive vision OS platform, allowing users to interact with digital content in their physical space using natural inputs like eyes, hands, and voice. Meta continued to innovate with its Quest series, enhancing mixed reality experiences and developing the LLaMA AI model, which has been fine-tuned for various applications, including chat and code generation. Google's GEMINI AI suite empowered a range of capabilities, from video and image generation to 3D realistic interactions, supporting the Metaverse's infrastructure. Simultaneously, Nvidia's next-generation GPUs introduced significant improvements in performance and efficiency, providing the necessary computational power to drive complex virtual environments. Collectively, these advancements are laying the groundwork for a more immersive and dynamic Metaverse experience.
The new reality is less virtual and more phygital. Consumer behaviors do not change overnight and what makes us human is the essence of being social, and this need will still prevail predominantly in the physical world (unless our physical reality is restricted). Technology sitting at the intersection of physical and virtual reality, elevating these interactions, found more grounding in the post pandemic world, which is what these tech giants also realized. We understand the value of AI and its impact in driving brands forward at speed, but human creativity needs to be the driver behind this evolving intelligence, and designing for people is more important now than ever.
Opportunities and Challenges for brands
According to Statista, the total Metaverse market is expected to grow at a CAGR of 37.43%, to reach more than 500 billion USD by 2030. This will be fuelled by metaverse experiences across e-commerce and gaming followed by health and wellness space, and AI will be a key catalyst in this growth. For brands, this signals a clear opportunity to continue experimenting with placements and activations across virtual environments. However, it’s essential to approach these opportunities strategically, considering factors such as return on investment (ROI), audience reach, and the relevance of the integration to the consumer experience. So far, AR and VR filters acted as easy inroads for most brands to engage with audiences across social platforms like Snapchat, Instagram, and TikTok, and test out these simple immersive experiences. With growth in metaverse opportunities, brands will need to start thinking around creating meaningful experiences which are relevant to their consumers while balancing the return on investments.
Here are some challenges and opportunities for brands when thinking around advertising in the Metaverse.
- Reach and Scale: As per YouGov, the cost of equipment remains the biggest barrier for non-users in the U.S., the Metaverse’s largest market. In other regions, internet speed and connectivity are major adoption hurdles. Brands should assess both paid and earned reach, considering factors like device accessibility and content appeal, to make informed advertising investments.
- Brand safety and data sharing: In the Metaverse, users operate with unique digital identities tied to personal data, which poses data sharing risks. Coupled with decentralized environments, content moderation limits with user-generated content (UGC) brand safety risks can be high, hence advertisers should pay attention to the placement environments in Metaverse.
- Gaming is strong and growing: While Metaverse as an all-encompassing and integrated virtual world is still growing steadily, immersive multiplayer gaming has remained consistently strong, with platforms like Roblox, Fortnite and Minecraft at the forefront. These platforms have strong user bases and established placement opportunities for brands. Google and Roblox’s recent partnership for bringing immersive ads to more publishers and advertisers via programmatic is a good opportunity for brands to test out gaming metaverse placements.
- Augmented Reality/QR Code/Murals/OOH Integration: Brands can leverage the AR elements across OOH, DOOH, print and street art. In addition, there is a lot of potential to garner earned media here if your brand experience is authentic and unique with a creative-first approach.
- Social placement: Socializing is still one of the top reasons for consumers to enter the Metaverse and brands need to understand how to build and strengthen virtual communities by choosing meaningful opportunities vs. force fit placements.
- E-commerce Innovation: There are multiple use cases for Metaverse application, such as virtual try-ons, digital clothing, AR lenses for online shopping, etc., which brands can leverage to drive an immersive buying experience within their owned channels or within third-party virtual worlds.
So, the answer here is neither to double down or completely walk away from the Metaverse, but to embrace it steadily as it sits today at the verge of growth, powered by AI and algorithms. Eighty-four percent of global consumers surveyed would like technology to seamlessly embed and overlay information onto the world surrounding them, per dentsu’s Consumer Navigator survey ’24.
Brands need to realize what an authentic valuable experience for their consumers is and what is the earned + paid reach potential of the engagement and campaign. We can help advertisers identify and build these experiences in the Metaverse which will be uniquely at brand infused with creative led innovation.
At Carat, we understand how algorithms shape the way people search, engage, and shop online. But we don’t reduce individuals to data points or one-dimensional audience IDs. We design for the multiple facets of each person, because that’s exactly what defines virtual personas in the Metaverse. We also understand how the power of communities and their underlying individual motivations moves our clients closer to their consumers.
In this Algorithmic Era, authenticity and meaningful connection matter more now than ever. Brands that lead with people-first thinking across all realities, are the ones that will make a real impact. The Metaverse isn’t a stage for superficial visibility; it’s a space to build genuine, resonant experiences with authentic communities.
Our Consumer Vision 2035 report highlights that decentralized platforms will shift the power to wider communities, and we will see emerging Web3 and decentralized technologies gain traction through their promise of a democratization of community building and governance. Culture is at the heart of these communities, and algorithms are the gatekeepers. This implies that brands will need to tap into these micro communities, navigating through the AI-driven algorithmic gatekeepers to build deeper meaningful connections with their audiences across all realities.
As part of the dentsu network, we bring deep expertise in Web3 and Metaverse marketing. For years, our Dentsu Lab teams have been scaling immersive brand experiences at the intersection of creativity, culture, and technology.
Here’s a powerful example of how we create meaningful, impact-driven campaigns in the Metaverse: https://www.dentsu.com/blog/all-players-welcome-unleashing-creative-potential-and-empowering-people-with-disabilities-.
