An Exploration of Strategies for Effective Placement of Advertisements in the Metaverse

Abstract

Advertisement has been a fundamental component of marketing in both traditional and digital media. Brands and advertisers are continuously exploring innovative ways to engage with audiences in the digital era. The emergence of the metaverse has brought a technological revolution that established the foundation for numerous future innovations. As the metaverse gains popularity, virtual world advertising has become increasingly vital for companies and businesses. However, existing advertising strategies often fall short of meeting the needs of both stakeholders, either causing significant disruptions to user experience or reducing advertising effectiveness when attempting to minimize disruption. It is crucial to strike a balance between the requirements of both stakeholders to ensure the acceptance of advertising strategies. Any approach that enhances the user experience but decreases the effectiveness of advertisement will not be accepted by advertisers. On the flip side, approaches that focus exclusively on maximizing effectiveness will face rejection from users. Existing literature explores balancing advertisement effectiveness and annoyance by intelligent ad placement in conventional interfaces such as mobile applications. This research highlights the notable gap in addressing similar concerns within the emerging realm of the metaverse. The gap in research on advertising within virtual worlds emerges from a limited comprehension of how to generate revenue effectively, attract customers, and minimize user annoyance toward advertisements in the Metaverse. This research focuses on examining new and unique advertisement placements specific to the Metaverse such as a virtual persistent ad that may not have practical applications in conventional applications. This study investigates the effectiveness of different advertisement placements within vi a VR environment, with a focus on enhancing user’s sense of presence, brand recall, and brand recognition. A user study was conducted, involving 60 participants engaged in a custom-made VR scenario developed in Unity. The subjects were tasked to navigate a virtual city, collecting coins, while three kind of advertisements were placed i.e, billboard advertisements, product advertisements, and persistent advertisements. Participants were unaware of the advertisements, and data was collected through preand post-experiment surveys, along with memory tests measuring brand recall and recognition. The results from the study show that the mean effectiveness scores for product placement (Mean = 9.85), billboard ads (Mean = 8.95), and persistent ads (Mean = 8.65) indicate that, on average, participants perceived product placement as the most effective, followed by billboard ads and persistent ads. In terms of annoyance, the mean of persistent ads was indeed the lowest (Mean = 5.25). However, the mean of product placement (Mean = 5.35) was lower than the mean for billboards (Mean = 5.65). Despite the numerical differences in the mean scores, the one-way ANOVA results did not show a significant difference in annoyance and effectiveness levels among the ad placement types. Hence, all three ad placements are found to be equally effective and annoying.