The State of Immersive Commerce

[upbeat music] Welcome to another episode of 51 Insights today with Charles Homborough.

Charles, welcome to the show. Thanks for having me, Marc. Uh, delighted to be here. Likewise, uh, delighted to have you here, Charles. Charles is the CEO and founder of Geek.

Geek is a leading analytics platform in virtual worlds. We'll have some time to unpack that later, but first I wanna start that with asking you, Charles, jump right in.

Is Roblox still the place to go for brands or has it peaked? Oh my goodness. Well, instead of giving you my opinion, what I'll do is I...

You'll probably see my face has gotten brighter because I've just moved to another tab, where I will give you the definitive answer based on the data for Q4 of last year in terms of the number of brands that have entered virtual worlds and which ones they've gone into.

And for Q4 of last year, there were 110 new activations in Roblox from brands. That's including owned worlds and experiences.

That was the largest platform, and then second to that was Fortnite with 75, and then third to that was Sandbox with 31. Did I say 75 for Fortnite? I, I just wanna make sure I get these numbers right.

So as of last quarter, the number one destination where brands are doing their activations is Roblox, um, and then followed by Fortnite and then, uh, the Sandbox.

If we look at all time in terms of since 2018, which is when Geek was founded, it is number one.

I mean, uh, there's been 847 brand activations in Roblox to date, and then your second one is gonna be Fortnite with 404- 477.

So it's, it's actually by quite some way it's, it's been the leading destination when it comes to virtual worlds and brands doing activations in there, and there, there's lots of different reasons why that...

I'm not saying that that might be the right destination, I'm just telling you the facts of where, what the data's saying.

Yeah, and that's great to hear those numbers because that's exactly what you're, you're focused on and, and also Geek releases quarterly reports. If you haven't seen them, check them out. Um,

so looking at the numbers, Roblox is the most important platform. Let's take a step back- Mm... from passive to immersive communication, from print, radio, TV to virtual environments.

What did change in the last 30 years in terms of how brands communicate with their consumers, particularly- Well-... when it comes to virtual environments? Well, in my view...

Listen, I don't think it's a change in the last 30 years. I, I would say it's more a fundamental change that happened in the last five to 10 years.

Because actually, as you said there, print, TV, and radio, traditional media, that's been going for, for many, many years.

And then sort of mid 2000s, the rise of the internet b- was the rise of digital advertising and digital communication, of which for advertising, the lion's share was taken up by the mainstream social media channels and Google AdWords essentially.

And actually it's the last five years where user-generated content gaming platforms has started to, uh, be a next, uh, evolution of what we would call traditional social media advertising.

That doesn't mean brands are gonna stop doing t- print, TV, and radio. It doesn't mean they're gonna stop doing social media advertising. It's just there's this new av- avenue emerging.

Going back to your original question is kind of over the last 30 years what's changed.

Well, what actually changed the last five to 10 years, because brands have been activating in games for the last 30 years, right the way from arcades.

It's just the way they were activating it was, it was not scalable, 'cause you had to go and speak with EA if you wanted to be in FIFA, for example, and that's been happening for years.

But what happened was the, these, the, a new type of game started to emerge, and the game was really a platform, not a game, where the users were creating the content, and that was the big difference.

It's the rise of Fortnite, it's the rise of Zepeto, it's the rise of Roblox, which are not games. They are platforms which host their users' content.

In the same way Instagram is not an Instagram channel, it's a platform, and it's the users that make the Instagram profiles.

So with that new structure comes scalability, because it means that any brand can build an experience in Roblox or build an experience in Fortnite Creative without even talking to Fortnite or Roblox, because a brand becomes a user.

Mm-hmm. Oh- So I think that's the biggest change really Yeah. W- w- very well said. All that started, as you said, five to 10 years ago, and GEEK, your current company- Yeah... came along i- in 2018. Yeah.

Can you explain to us a little bit what was your thought process behind that and your thesis- Yeah... when you launched GEEK in 20- Absolutely. Yeah. I, uh, well, well, I'm gonna be brutally honest, I stole the idea.

I didn't come up with the idea myself, 'cause actually I was working at another company where I was looking after a client of mine there, which was Facebook at the time, and they were heavily targeting gamers in advertising.

And I kind of asked them why on earth they were doing that, and it's that old story that I just mentioned. They said, "I'm, uh..."

"You know, the problem, Charles, is that people are not just going into games to play them anymore. They're actually going in for another reason. They're going in to socialize."

And this is an issue for Facebook because they are socializing in these games like Fortnite and Roblox as opposed to socializing on Facebook and Instagram.

So they kinda knew back in 2018 that the future of their platform would be 3D and immersive and gamified. Obviously, four, five years later, they come out with Meta and change their name, and they...

We all know what Mark Zuckerberg's mission is, looking at Roblox and Fortnite with envious eyes and essentially trying to recreate what Roblox and Fortnite have already done inside the mecha- Meta ecosystem.

Understanding back in 2018 that Facebook had told me that gaming platforms are essentially a competitor to Meta, I then realized, well, there are these businesses out there that exist for print, TV, and radio when it comes to measurement and attribution, and any brand that's interested in going into those channels needs to use someone like Nielsen to understand their return on investment and make data-led decisions as to whether they advertise on channel one or channel two.

Same thing happened with social media. There are companies like Meltwater, for example, where actually...

And, and social listening businesses that exist that give you kind of that market intelligence, that business intelligence to decide what you should be doing in social media, and once you've activated in social media, what is it that you're getting back to tell you that you should stop doing this, or you should continue doing this, or you should optimize what you're already doing.

I immediately knew that for gaming from a brand perspective, that absolutely did not exist. It was kind of innovation and, "Yeah, we wanna be in this video game because I saw my kid was playing it."

Where actually the, we wanted to put the, the science into this. So we want to say, "Well, no, no, no, no, no. Rather than anecdotal, yeah, we need to be in Roblox, I need the data to tell me that I need to be there.

And once I've gone in there, I need the data to tell me that this is the right thing that I'm doing."

Marketing is art and science, and there's a lot of basically art going on, and we just wanna put some science in there. Yeah.

In the same way that Meltwater put science in for social media and Nielsen put science in for, for broadcast. Mm-hmm.

Yeah, and- So I looked at the company and, and immediately decided to start GEEK, which has its own origin story [laughs] of getting it wrong and getting it right and, and, and ending up where we are today. Yeah.

And, and you obviously did some things right. You work with some of the leading consumer brands in the world.

Can you unpack for us a little bit more how does your product look like and what are some data points that you look at and brands look at thanks to your tool? Yeah.

Well, actually, it's very simple because really brands have certain data points that they look at for print, TV, and radio in which they decide to continue to invest in that space or not.

A lot of it is brand uplift reports, some of it is essentially reach, and then some of it's engagement, and then some of it is even direct response. So what I spent here, I get back here.

And then for social media it gets a bit deeper because it's all digital, so you're no longer relying on panel, which print, TV, and radio, which would be relying on slightly less brand uplift reports and more on just data that you're gonna get back directly from the platforms themselves in terms of, I posted here and I got this many impressions.

And we all remember the, the rise of social media, everyone started talking about billions of impressions and how the impressions is the important number, and then it went down a layer to engagements, and now it's gone down another layer to a CPM, so a cost per, per click that goes through to, to your website to purchase a product.

And I would say it's no different to the data points that you get in virtual worlds.

The clever thing that we've done is we've aggregated all of these different virtual worlds together, and through our, uh, you know, data partnerships, one of which is public that I can talk about with Zepeto, you're able to see all of your private data inside that particular platform.

So in the planning phase, you're gonna wanna know what demographics live within the platform. And I'm not talking about just the Roblox demographics for the 300 million monthly active users.

I'm talking about the demographic for the experience that you want to integrate into inside Roblox, of which will... It's a bit like saying the, the demographic for Instagram is X, but actually the demographic for

Kim Kardashian's Instagram profile is gonna be different to the wider demographics of the platform. So really moving away from Roblox is 50 50% female to male split to

Dress To Impress inside Roblox is 80% female, et cetera, et cetera. So first of all, it's zeroing in onto where in the platform you want to show up, so that's really planning.

And then when it comes to creating, we have a list of all of the developers, and we track all of the experiences that the, the developers make.

So when you want to contract with someone to build your experience or create an item, we're showing you all of the data in terms of the experiences that they've built in the past and how successful or unsuccessful they've been.

Then you've got the internal data from Geek, because we manage so many different RFP processes on pricing.

So how much it costs to create an item for different UGC creators, how much it costs to do an integration, how much it costs to build an own world, which is gonna differ depending on whether you're talking about Fortnite, Roblox, or Zepeto, or The Sandbox.

And then finally, it's the reporting, and the reporting is arguably the most important one because that's the justification for once you've gone in,

I wanna know what's happened, and I wanna know crucially what's happened in comparison to my other media mix.

So how has Roblox performed better in comparison to the spend I've just done with Meta Ads and the spend I've just done with Google AdWords?

And that goes right the way from top of funnel awareness to the middle of funnel engagement stats, to bottom of funnel conversion. And you've seen a lot of brands now doing this. You've worked with a lot of brands.

If you had to think about one that particularly stood out or did a great job in terms of those numbers, who would that be and, and why did they do so well? Well, that's...

Marc, you're asking me to pick my favorite child, essentially, which is kind of difficult.

Out of just pure nostalgia, I'm gonna talk about our very first customer, who is still our customer today, because of how brave they were when they went in, especially with me at the time, who was just a small team of three people just building Geek.

We were known as Checkpoint back then. It was a slightly different company.

But that's Gucci, and I think when we started with them in twenty nineteen, initially we went into esports, and then we saw the wider opportunity in gaming, and the amount we learnt with them was incredible. But just

purely pushing the boundaries and doing stuff that no one had ever done before, like Gucci Garden in Roblox, um, even some of the Web3 activations that we were starting to do in that space, just really, really pushing the industry forward and innovating.

A lot of other brands have kind of followed in, in their direction. There are lots of brands who have done it right

for lots of different reasons, and there are lots of brands that go in and do it wrong, but maybe their objective was totally different, and they were matching their objective, so it's actually right.

So it's really hard to say who's done it right and who's done it wrong unless you know what the objective is. And I can tell you right now, Marc, the objective goes down in three different directions.

One is, I wanna reach audiences who aren't on Facebook or Instagram anymore, and they're just in TikTok and, and Snapchat, but actually they're having deeper experiences in Roblox and Fortnite.

Uh, so that's a kind of awareness objective, and many of the brands are in that space. Another one is that engagement one, which I actually think virtual worlds engagement is the strongest.

These platforms are the strongest platforms that you have to your tool set out of every single platform in your marketing mix, be it print, TV, and radio, social media.

If you want engagement, and engagement is really measured, the global measurement for that is time spent, time spent with the brand, engaging with them.

Virtual worlds is number one for that, and that's the second reason why brands go in a lot of the time is actually I want to be in areas where you-- where my consumer is engaging with me on a deep level.

And then finally, another reason why brands will go in is to generate a new revenue stream, which we saw a lot of in the Web3, uh, uh, sort of NFT hype phase.

But we're still seeing that in virtual worlds and gaming, where people are selling digital goods.

You know, Gucci, for example, again, I, I bring them up, selling the handbag for more money in Roblox than it costs in real life.

When we started doing that back in twenty twenty-two, I might add, so that's three, three and a bit years ago, that was a new revenue stream for them.

So very often, brands either zero in on one of those three objectives, or they kind of have all those objectives.

And when I look at brand activations, and we also looked at a lot of brands who went into Roblox, for example, and, and Hugo Boss just recently launched a collection on Roblox and also started selling those physical items directly on Roblox.

And there's a lot of talk, and you, you mention it as well now, around Roblox as a revenue stream or- Right. Yeah, yeah, as a, a, a place of commerce, a revenue stream, or any other platform.

It doesn't need to be Roblox. How much weight would you give that, um- Yeah. Yeah, well, I can-... part?

Again, I don't want to be specific because Hugo Boss is actually a customer of ours, and yep, they've start-- You're absolutely right, started selling physical products inside their Roblox experience.

And what I would say is we have to think about using traditional social media as a revenue stream. You can't use print as a re- as a direct revenue stream.

It's impossible because you can't buy when you're reading a magazine. You just can't click through to the website. It's the same thing with TV. You can't do that, and radio, you can't do that.

So in social media, you can, and actually this has been happening for a very long period of time. Instagram tried it. They came out with Instagram Shops. Now, the question is, is was Instagram Shops successful?

Not really, or maybe it was just for some, um, some type of product category. Now, TikTok Shop is a bit more accept- successful, which is kind of interesting.

Are these other platforms any different to traditional social media? I think the potential is high, but we're still in very, very early stage.

And the reason why I think the potential is higher in virtual worlds is because what I mentioned about the, the value point of virtual worlds is that engagement. It's the middle of the funnel.

And if you believe that greater engagement- leads to greater purchase, then the theory should be that actually these emerging platforms should be better at re- direct response purchase than traditional social media.

I happen to think it's a bit of that. I also happen to think it's a massive consumer behavioral change piece, where actually a millennial like myself is kind of less trusting of platforms to purchase.

You know, I wanna go onto amazon.com, or I wanna go onto walmart.com, I wanna go onto the gucci.com, and I wanna purchase my product from there.

Now, because of the success of TikTok Shop, there might be another theory, which is Gen Z and Gen Alpha don't act like millen- millennials when it comes to purchasing habits, and actually they're much more comfortable purchasing on the social platform where they hang out with their friends.

So if that's the case, then that's also in looking good for virtual worlds.

But I wanna be very, very clear, we are at the very early stages of all of this, and a lot of this is very much limited to a certain amount of products that you're able to purchase. You can't purchase the whole shop.

Um, you know, Walmart, who's a customer of ours, where we... You know, with Walmart, we were the first ones to test e-commerce inside Roblox, which the amount of learnings was fantastic and, and brilliant.

But again, you're limited to three items, real world items that you can purchase. You know, Walmart sells more than three items.

I would very much emphasize the top of the funnel and the middle of the funnel for virtual worlds, and I would say the bottom of the funnel may perform better in the future than traditional social media.

But let's be clear, it hasn't worked for the millennial platforms in traditional social media when it comes to bottom of the funnel if we compare it to Instagram Shops. Yeah.

Because everyone said Instagram Shops is gonna be the huge thing and everyone's gonna purchase off, off Instagram, and that never came into fruition. Yeah.

And, and, and why do you think e-commerce on, on Roblox and virtual platforms isn't bigger by now already? So new. I mean, it's hardly started.

If we think about it, we did a pilot with Walmart about six months ago, and Shopify has now joined the frame about three months ago, and I'm sure there's gonna be others that are going to jump on board too.

But we are at the very start, so it's very hard to make a judgment on whether this is a success or not when you're just scratching the surface here. Yeah. So I think, I think the jury is out for virtual worlds.

I think what's very clear is Instagram Shops didn't work the way everyone wanted it to, and TikTok Shop has kind of worked, but is it a massive, you know, blow the doors off? No. So the jury's out.

But I would say if you're going to these platforms today for that direct response reason, then you're going in for the wrong reason today.

Because actually the reason you should go in today is because you have a KPI that's attached to engagement, and you say, "You know what?

I think we're gonna get a lot more engagement and a lot more in time spent inside Fortnite and Roblox for this piece of content than we would inside traditional social media."

Let's move on to looking at different platforms. Yeah. And I know there are a lot of different platforms out there. You already mentioned a couple of them.

As brand leaders step into that new world, and for many of them that's completely new still, they need to figure out where are they going first. There's Topata, there's Roblox, there's Fortnite, there's Minecraft.

How do brand leaders need to think about those th- different platforms? And a second question following on that is why is Roblox still the dominating platform?

You mentioned at the beginning they still have 80% of integrations that you track are happening on Roblox. That's insane. I mean, uh, um... Okay. Well, let's take a step back, and it all goes back to the...

Careful, Marc, I'm about to sound very marketing jargony, so I'm just... Hopefully this is not gonna bore everyone, but there's a very boring answer, which is what is the objective of the brand?

Forget about all the platforms, including virtual world platforms. Like inc- include print, TV, radio, social media, and emerging platforms. What's your objective?

So when you start with your objective, then you go, "Okay, my objective is to get engagement." That's gonna immediately lead you to virtual worlds, so now we're in all the different virtual worlds.

Now you gotta ask another question. Who is my target market? Because if my target market is Southeast Asia, the platforms of your choice... Or, or let's be even more extreme.

If my target market is China, then that's gonna limit me to certain virtual worlds that have a Chinese demographic and Chinese audience, right? So these are the things you gotta think about.

And when it comes to demographics, you've gotta think of the gender split, you gotta think of the age range, and you've gotta think of the geographic location.

That's where the data becomes very important, because now you've gotta look at the platforms and you've gotta look at all of the data points that hold the target market that you're targeting.

Finally, you then have to consider two other points. One point is budget, because going into different platforms have different barriers to entry in terms of what, what you can do. And then the second is capabilities.

So what you can do in Roblox is a huge amount of variance in terms of what you're able to activate on.

And then what you can do in another virtual world platform might be very, very restricted in terms of you can only do this.

For example, if you know you've got an NFT angle, there's gonna be some platforms that do not accept NFTs, and you're gonna be Decentraland or Sandbox, basically.

So hopefully that answers the first part of your question, which is how do you kind of decide what platform to go into. First of all, you've gotta go to your objective. What are you trying to achieve?

If it's engagement and awareness, but more the engagement piece, then absolutely virtual worlds. Now you've gotta decide on the virtual world. You've gotta look at your audience demographics.

Then you've gotta look at your kind of what are you thinking about budget-wise, and then you've gotta think, "Okay, what are, what are we thinking about ca- capability-wise?"

And all of that data will lead you to the platform that makes most sense for what you're trying to accomplish. Now, question, which is- Why is it that Roblox accounts for so much of this market share?

And the reality of the situation is, is Roblox ticks the most boxes for a brand's objective. 'Cause usually the objective is we wanna reach a lot of people.

Well, Roblox is the largest virtual world platform with 300 million monthly active users. Usually you wanna come in at a low barrier to entry, or you wanna do test and learning.

Roblox has the capabilities for you to come in and just drop an item for $100. So there's that.

I would say the reason why Roblox is on top is because of the breadth of opportunities that Roblox offers to brands that want to reach their audience, and just the sheer size of the audience means that it covers such a large demographic and ticks all those objectives.

That's, that's very interesting, and I wanna dive a little bit deeper into Roblox now. And, um, I mean, it's amazing. You, you look at so much data. You have so much data. You work with so many cool brands.

And I wanna ask you, looking at all that data, are there any patterns that you see across the, the range of brands you work with that work very well? Is, is there a pattern? Is there a recipe for

guaranteed success in Roblox? Success m- success, I mean guaranteed engagement, guaranteed impressions in line with your target. Fascinating, Marc.

To turn the question around, is there something that is guaranteed a non-success? Well, these platforms are always evolving and changing.

Uh, uh, the, the easy one, guaranteed non-success, non-success is don't listen to the community and just, like, keep your ears shut and don't use data to make decisions. Guaranteed non- [laughs]...

non-success, or y- you're very lucky if you're successful, basically. So first one is have all the information up, but I obviously would say that based on the company that, that I've created here.

So that, let's get that bias out the way. But I would say that, that's a good start. It's fascinating.

There's not usually a correlation between budget spent and success, and really what we see are the most successful brands are the ones that are most, one, conscious of the community that they're entering, and they're very aware of how they can uniquely add value to the audience that they are speaking to.

So they know their brand really well, and they know how their brand can add value to the user base. Big, big success factor there, and that's about listening to the community. It's about having the data up front.

It's about knowing what you're doing.

And then the second one is those brands that kinda go in and spend a, a lot of money to generate traffic and generate users, they're usually the ones that go up, and then they go down.

And actually, the smart brands are the ones that kind of go in small, and then they progressively get bigger as they get more data back, and then they become super, super successful.

So I would say a sort of test-and-learn slow approach as to... as opposed to, "Right, this has worked," but usually it doesn't.

"Okay, we've got this huge budget, and we're gonna come in and slam this big experience down, and everyone's gonna come to it." Doesn't usually work. Can work, doesn't usually work.

So those brands that are solely reliant on, you know, free items, for example, to attract users, and solely re- reliant on just pure advertising to get those users in, usually go like this and go like that, and we see it in the data.

Those brands that build an experience or integrate into an experience which is adding value to the consumer and to the player, usually it's like that. [laughs] So really, again, Marc,

very biased answer from me, it's about having all the information and data up front and not about spending a fortune. Those are the two things. Yeah. Uh, that's, that's interesting, Charles.

You also, uh, saw a, a lot of what happened with those platforms in the last, uh, five years, and I wanna now look a little bit into the future. Yeah.

If you think about what will happen with Roblox or how will, will virtual engagement look like in five years, what are things that are absolutely gonna change, and what are things that probably will stay the same?

Um, do you know, in my head it feels like it's easier for me to answer what will change as opposed to what will stay the same. So I'll start with what will change. The user base is gonna continue to grow themselves.

So these platforms are just gonna get bigger. There's no doubt about that. We're seeing that quarterly. The user base in all these platforms is growing.

From the platforms themselves, especially the UGC gaming platforms, what you'll see is they'll become more and more social.

So they kind of originated as gaming platforms, but they'll start to encroach on what traditional social media does, and you'll see this with Roblox.

I imagine they'll probably come out with a newsfeed at some point, a bit like a Instagram scroll. If you look at Zepeto, they have a, a sort of TikTok inside their app, but you know, it's avatars as opposed to humans.

So I think you'll see more social communication inside these apps.

Uh, so absolutely the predominance of Fortnite is ultimately a battle royale gaming platform, but the future of Fortnite is Fortnite Creative and avatars connecting with each other to socialize.

And Roblox is a bit further along, and Zepeto's even a bit further along to Roblox in, in that sense. So you'll see more of that happen. Here's the rub as well.

What else you're gonna see, and this is already starting to happen, is you're going to see traditional social media start to challenge the gaming platforms, and this is already happening with Meta and Horizons Worlds, where Meta was just this in VR headset, and now Horizons Worlds is on your mobile.

So actually, in the next five years, if you asked me to look at the landscape, I think you'll see a lot of traditional social media encroaching on these new emerging platforms.

And actually, the traditional social media is coming from an angle as, "We're social media, and we're less gamified, and we're going more towards gamified and, and, and immersive."

And then you're seeing Roblox and Fortnite and Zepeto over here, who are super gamified with social, becoming more and more so- social.

So everyone's kind of fighting for this middle ground because ultimately, the gaming platforms will not continue to grow unless they expand into traditional social media space, and social media will continue to lose market share unless they start entering virtual worlds, which is what Mark Zuckerberg, he knows.

That's why everyone's sort of taking the piss out of him, but he, he is still spending a fortune to do it because he knows if he doesn't, he's gonna lose. Mm-hmm. Mm-hmm. So- And how do you see the... Yeah...

that's what I would say is kind of the five-year outlook of all of this stuff. The user base- Mm... grows, but both traditional social media and UGC gaming platforms kind of come together.

You'll probably see some mergers and acquisitions. Maybe one of the social media companies will buy Roblox, or they'll buy-

Epic or whoever it is, or Epic will buy a traditional social media company And how do you see the progression of Western versus, versus Eastern Asian platforms?

Um- Do you see like a, a power shift there in users or, or how do you see that evolving?

Or let's talk five years ago and say, "How do you see the progression between Western social media platforms and Asian social media platforms?"

And actually Facebook kinda global, bar China, and, um, that's the way I see it. I see no difference with these traditional, with these emerging social platforms- Mm-hmm... where actually Roblox is global.

Zepeto's, Zepeto's kind of Asian, but has a very, very large audience in the US. So the only caveat is China has its own ecosystem.

So, and I don't see that changing, and now we're getting into sort of politics, which I, I have no idea about.

But I don't see that changing too much in terms of, okay, China's now gonna let all these gaming platforms just enter their landscape. And actually- Mm-hmm...

in China, you know, they have their own virtual world platforms like Super QQ and DouYu, uh, Douyin, which is the Chinese version of TikTok, it's actually got virtual worlds in it. Not many people know that. Mm-hmm.

But yeah. Yeah. Okay. Be- be- before we end with a short lightning round, I wanna ask you the, the last question, and I think it's important because- I'm interested to hear what you think of that, Marc. Are you...

Do you agree? Do, do you disagree? What do you think is gonna happen? About, about- The social media platforms and merging East to West and all of that stuff.

I think the analogy with social media and the separated markets is a pretty good one, and I don't, don't think that this is gonna change. China will have its separate version. And for a while.

The, the, the Western world will have their separate versions. I'm rather wondering about not West and East or West and Asia, but more what kind of industries or sectors will start adopting that faster.

Because I know that you mentioned in your report that you had much more activations in media and entertainment than versus retail or automotive. And I looked at those stats, and I was wondering why, why is that the case?

I couldn't explain it. Maybe you have an answer to that, uh, or maybe you have an answer to how, how this will shift over the next years.

First of all, last year was a difficult year for automotive, just budgetary advertising perspective. The whole automotive industry was kind of suffering.

But the reality is, is there are less automotive brands than there are media and entertainment brands. And to be clear, those stats are new activations.

So there are people who have activated in 2012, uh, 2022, who are still activating now. It's just they've got a persistent experience, so they are just continuing to activate. It's about new brands entering the market.

And the reason why I actually think social- media and entertainment is so big is because it's very campaign driven, and it's, you know, Wicked, the film, has just come out, so they need a virtual experience, and it lasts for a certain period of time, sell some tickets on Fandango and move on.

And actually, the next film, Kung Fu Panda, comes out, and then... Do you know what I mean?

So that's why I think media and entertainment is always gonna be a large category, 'cause there's always gonna be a new IP that they need to promote to sell cinema tickets.

And actually, if we look at the fashion industry, for the big fashion brands that have the sort of budgets to enter these worlds, they're already kind of in.

So the new ones are obviously gonna be, there's gonna be less and less until there's a barrier to entry that drops, which is going to happen because of AI at some point, God knows when, at some point, where actually it doesn't cost X amount to build a virtual experience, it costs Y.

And then you've got the entirety of the small to medium sized business market entering, which will blur up the numbers again. And then, uh- If that answers your question on media and entertainment. Yeah. Yeah, yeah.

Yeah, definitely. There are gonna be automated brands, Marc. Yeah, agree. Uh, and, and m- some... Like, one thing I'm most excited about is what you mentioned at the beginning, is about e-commerce.

And you said we're, we're only at the beginning right now, and as we see this unfold, I'm really wondering what the e-commerce opportunity in those worlds will be, and then also how will brands start changing how they sell products.

And, and here we see a lot of luxury brands kind of being, being on the brakes, uh, and being more traditional about this, and I'm excited to see how this will change once this Roblox generation will actually move, move up the, the buyer's curve and have the m- the means to, to purchase those products and, and how those luxury brands will adapt.

If they have a proclivity and a consumer behavioral change to purchase directly on platform as opposed to direct with brand, which for millennials, as we've seen with Instagram Shops, they don't have that pr- proclivity.

However, these platforms are for Gen Z and Gen Alpha. It turns out TikTok shop's done all right, but that's a big if, Marc.

Like, and then the other element is if engagement is big and you believe in more engagement leads to higher purchase, these are the best platforms for engagement, so all sense should tell you that they should also be the best platform for commerce.

The jury's out. I wanna be absolutely clear. We're at the beginning stages. We don't know. Instagram thought they'd nail it, and they didn't. So let's see.

So I wanna, uh, touch on another last question, and that's blockchain. Blockchain has been a, a, a big topic o- obviously for us 51's insights a- anyway, but also with virtual worlds.

We saw, like two, three years ago, platforms like decentralized, Decentraland, Sandbox rising. Those platforms are by now, at least in my opinion, largely, largely irrelevant.

There was a time, like two, three years ago, where anyone in, in Web3 thought NFTs are gonna be the next big thing, and we'll- we're gonna purchase products through NFTs online. How do you see all of this?

Well, selfishly, I'm so desperate for it to take off and do well because just from a pure data perspective, it means all the data's out there, so we can aggregate that and pull out some really good insights, and it's super easy.

It means I don't have to do very long-winded, very heavy compliance partnerships with these platforms, which we've done in Web2 In order to get the data that we need to, to, to support our customers.

If these blockchain worlds took off, it's the, the, the, well, only factor is user base. They just need the user base, and then it's fine. But that's... When I say just, that's the most difficult thing to acquire.

If they took off, that's brilliant because it's all on the blockchain, and it means we can measure everything. It's so hard to say whether there's a future or not.

I think if there is a future, the future will come from either traditional social media, those immersive platforms moving into blockchain technologies, or the traditional UGC gaming platforms moving into blockchain technologies.

I find it very difficult for a new player to come in and acquire users of those already established communities, 'cause the biggest challenge that the Web3 virtual worlds have is it's the developer community building on their platforms.

And that's why Roblox is so strong, because they have a huge developer community, as does Fortnite.

They have a huge creator community building experiences on Fortnite, because it's the quality experiences that drive the users and the traffic.

And then you get this kind of flywheel effect where I know how to build on Roblox, and I know how to play on Roblox, and all my friends are on Roblox, so now this is, we're in the ecosystem here, and we're all buying Robux.

And in order for these Web3 blockchain platforms to do that, they need to get the talent building on there. But to get the talent building on there, they need the user base. So it's kind of a chicken and egg situation.

And I personally believe there is a future in it, but I think the future will come eventually from those already established platforms as opposed to those new players. But I could be wrong. I have been wrong many times.

What are your thoughts, Marc, on, on that?

I think building those platforms on chain and together with NFTs as in-game items was a great idea two or three years ago, but it didn't take off because users don't care about NFTs.

They care about the gaming experience. They care about the social experience, and if you can't deliver that, everything else doesn't matter. And that's we- Technology first, and do I care about this second, really?

[laughs] Exactly. Yeah. Yeah. Which- Yeah... is not the way the world works, you know? Yeah. Yeah. So it's, it's really, I think, a set of many challenges those platforms has, have.

But as you mentioned, one of the biggest ones is just actually having a u- an existing user base that brands wanna connect with. And if you don't- Right...

don't even have that, it's, it's very hard to get it off the ground. What if Robux just turned, just went on chain? No one would make a... They wouldn't know any different. There'd probably be some benefits, but...

And then there would... Do you know what I mean? And then it would just be like, okay, well, there you go. There's your Web3 platform. So instead of Robux, it's now Robux on chain.

Obviously different economics, different economy, and all of that stuff, and then every item is now on chain. So, but the user doesn't care, you know? Exactly.

It just opens a new realm of possibilities of how you can interchange it and add it into your wallet and take it somewhere else, all of that stuff.

But ultimately, all the user cares about is, and really when it comes to Roblox, is, "Where are my friends?" Because actually, the reason why I'm in here is not to play or do anything.

It's to connect and catch up with my mates. Mm-hmm. So all I care about is, where's my friends? You know, whether it's a Web3 or Web2 platform doesn't really make much difference.

And the problem was back then is it's like the Web stuff, you, it had limitations, and it meant complexities, and you could only do things in certain ways. Some of them you had to have a wallet to sign up.

It created barriers and issues to connecting with your friends. Yeah. I actually think probably Meta will, will do it before anyone else in their virtual world. Meta? Uh, w- why, why do you think so?

I think Meta's the, has immense potential. It's Horizons Worlds. This is the one that everyone...

You- Do you remember Mark Zuckerberg where he had the Eiffel Tower in Paris, and everyone sort of laughed at him, and there's no legs and all of that stuff?

Still hardly anyone's in there, but I think it is the virtual world with the most potential because in the very basic fact that the Meta user base is three billion monthly active users. I think it might...

I don't know what the daily actives are, but at least three billion monthly active users.

I'm sorry, but all you have to do is add an enter button on Gucci's Instagram profile, and that takes you into Gucci's virtual world on Meta Horizons, and Gucci have 40 million followers on Instagram.

And you, it is undeniable the size of that user base and the power of that user base. So that is a sleeping giant that is just waiting.

Everyone is laughing at Meta Horizons Worlds, but you've heard it here first on the, um, on the podcast, 51 Insights Podcast. You've heard it here first. Keep an eye out,

because I feel like that is a very, very, um, exciting platform that no one's in right now, to be honest. Oh. No one's playing it. Like, hardly anyone is, in comparison to Roblox, Fortnite, and all these others, but

just wait. Yeah. You, you heard it here first. Charles, thanks a lot for coming. This was very interesting. Before we end, though, I would like to have a short lightning round. Short a- Okay...

and short questions, short answers. First one- I don't even have any short answers. That's difficult for me. Yeah. Data you'd wish you have but you can't get. Individual identifiers, which is against GDPR compliance.

[laughs] That's probably, that's probably borderline evil, so I wish I had it, but I probably shouldn't. So there we go. The biggest myth about virtual experiences. That you have to be in a VR headset to experience them.

You don't. Your most favorite virtual platform. God, that's, that's very, very difficult. Um, Marc, why did you ask me that one?

Because I've got partnerships with all of these different platforms, so I'm gonna get myself in trouble if I... I can't, I'm not, I'm passed. I'm not saying that one, 'cause I, I love them all.

I'm friends with all of them. Last one. What are you most excited about for virtual worlds, virtual commerce in 2025?

The further socialization of these UGC gaming platforms, and I wanna see the exciting new social features that they're bringing, and the more and more they compete with traditional social media.

That's what I'm most excited about is the social aspect of these virtual worlds. That's great. Charles, again, thank you for coming to the show. Where can people find more about you, about Geeq?

You can go onto geeq.com, G-E-E-I-Q.com, and subscribe to our insights, and LinkedIn, of course. You can find me at Charles Hambury on LinkedIn and at Geeq on LinkedIn. Perfect. Thank you.

Uh, if you like this show, please like, subscribe, retweet, re-share. This helps us keep it going. Charles, all the best for your future journey with Geeq. Uh, you're doing great stuff, and, uh, talk soon.

And thank you, Marc. I've always been a fan of your insights, and I've been following everything you do on LinkedIn. This, uh, new podcast, I've listened to a couple of episodes. It's, it's really great.

So such a pleasure to be on. Thanks for inviting me. Thank you. [outro music]