The Future of Advertising and AdTech in the Metaverse

There has been no shortage of hype around the metaverse over the past few years. Its arrival is often compared to the invention of the Internet — a foundational shift that opens entirely new territory for businesses and users alike. The comparison is dramatic enough that Facebook restructured its entire corporate identity around the concept, rebranding as Meta.

But what is the metaverse, exactly? Is it simply a virtual world you access through a browser or headset? Or is it something considerably larger? And where does advertising fit into all of this?

A panel discussion brought together practitioners from the AdTech and virtual-world space to dig into these questions. What follows is a condensed version of that conversation.

What Is the Metaverse?

The concept is older than most people realize. The term itself originated in Neal Stephenson's science-fiction novel Snow Crash, which described humans as programmable avatars moving through a three-dimensional virtual space — a metaphor for the real world rendered in software.

That vision felt speculative at the time, but the technological preconditions are increasingly in place. What's important to understand is that the metaverse does not equal virtual reality. It's better understood as an extension of reality — a layer where multiple technologies converge: extended reality (XR, encompassing both AR and VR), blockchain, AI, and community structures like DAOs (decentralized autonomous organizations).

It's also tied to the broader concept of Web3 and what some are calling the creator economy — a shift toward a more democratized digital environment where users have more agency over their experiences and, critically, their data.

Is the Metaverse Here Yet?

Honestly, no — not in the fully realized sense. The industry is still in a prototyping and experimentation phase. What exists today is better described as a collection of virtual worlds or "subverses," each with its own closed ecosystem.

Several technological prerequisites still need to mature: 5G network infrastructure, more accessible devices, and meaningful progress on interoperability between platforms. The metaverse as envisioned is supposed to be seamless — you move from one world to another the way you move between websites today. That isn't possible when platforms like Fortnite and Roblox operate as entirely closed systems.

Interoperability is arguably the defining unsolved problem. Bodies like the Metaverse Standards Forum are working on open standards and have established member-driven working groups to address this, drawing a parallel with how Web2 ID and CTV advertising standards were developed through industry collaboration. Separately, Neal Stephenson himself launched Lamina One, a protocol aimed at enabling an open metaverse — a signal that some of the space's foundational thinkers are actively working on the infrastructure problem.

One often-overlooked data point: 85% of current metaverse users access it through desktop or 2D interfaces rather than VR headsets. The immersive device experience is still a niche within a niche.

Meta's Role — and Its Limitations

Meta (formerly Facebook) accelerated mainstream awareness of the metaverse concept through its rebranding, and that had real effects — it drew attention and investment to early builders in the space. But there's a fundamental tension between what Meta represents and what the metaverse is supposed to be.

Web3 and the metaverse are built around decentralization — the idea that individuals own their data rather than platforms owning it for them. Meta's entire business model runs in the opposite direction. In Web2, the common observation is that users are the product; platforms like Facebook aggregate and monetize user data on a massive scale, without meaningful individual consent for much of its history.

Centralization also creates fragility. When users lose access to a platform account, they typically have no recourse — the platform holds all the cards. This runs counter to the Web3 ethos of user sovereignty.

On the device side, Meta's investment in Oculus and accessible VR hardware is genuinely relevant to the metaverse's future. Devices that extend reality in everyday, casual ways — rather than requiring users to strap on a headset — are a meaningful part of the infrastructure story. But hardware investment alone doesn't resolve the philosophical and architectural gap.

Is the Metaverse Just Another Advertising Channel?

At this stage of development, not really — or at least, not yet.

Gaming is the clearest existing analogue. It's a channel that publishers and advertisers use, but it remains niche relative to search, social, or CTV. Most industries ignored gaming culture for years before recognizing it as a mainstream social platform. Fortnite, for instance, isn't just a game — it's a place where people hang out, socialize, and share experiences. The metaverse represents a further evolution of that dynamic.

But the metaverse adds complexity that gaming doesn't fully prepare advertisers for: different tracking systems, different privacy considerations, different user interaction models. It will eventually constitute a distinct channel, but the audience scale simply isn't there yet for most brands to treat it as a performance channel.

What Are Brands Actually Doing in the Metaverse Right Now?

Over the past couple of years, a number of major brands have established a presence in virtual worlds. Heineken, Samsung, Nike, Coca-Cola, and Starbucks all landed in Decentraland. Wendy's built the Wendyverse inside Horizon Worlds. Gucci created the Gucci Garden experience inside Roblox.

The honest characterization of most of this activity is PR rather than revenue generation. Brands are planting flags — signalling that they're engaged with what's next, building awareness among younger audiences, and experimenting with gamified engagement formats. Gucci's Roblox activation is a reasonable example: Roblox has 55 million daily visitors, 60% of whom are children. Those kids aren't Gucci customers today, but they're growing up with the platform, building brand familiarity that could translate into purchasing behaviour a decade from now.

For anything beyond brand awareness, though, the infrastructure isn't ready. Questions of digital identity and anonymity in virtual environments remain unresolved. Targeting based on blockchain data raises genuine ethical concerns — the expectation in Web3 is that users explicitly consent to their data being used, and that they receive something of value in return. That's a very different operating model from historical programmatic advertising.

Data, Consent, and the Programmatic Problem

This is where the metaverse and Web3 present a structural challenge to the AdTech industry as it currently operates.

Programmatic advertising was built on large-scale data collection — data owned by the companies that collect it, not by the individuals it describes. For a long time, that collection happened largely without explicit user consent. Regulatory pressure has started to shift this: GDPR fundamentally changed the consent landscape in Europe, and Apple's App Tracking Transparency (ATT) framework extended consent requirements to mobile identifiers. But these are corrections applied to a Web2 infrastructure that was never designed with user data ownership in mind.

Web3 inverts the model. Data is decentralized and individually owned. Consent isn't a legal checkbox — it's architecturally required. If someone's data is used for targeting, there's an expectation that they know about it and derive some benefit from it.

That creates a genuine reinvention problem for programmatic. The existing mechanics — audience segmentation, retargeting, real-time bidding based on behavioural profiles — don't map cleanly onto a world where individuals control their own data. The industry will need to develop new models, and the fraud, opacity, and intermediary bloat that already characterize parts of the AdTech ecosystem make that reinvention more urgent, not less.

How Would AdTech Actually Connect to the Metaverse?

Technically, integration between AdTech platforms and virtual environments is plausible — assuming the metaverse exposes external APIs, connecting to existing demand-side platforms and ad servers is an engineering problem rather than a conceptual one. The harder questions come after that connection is established.

Creatives in 3D environments behave differently than banner ads or pre-roll video. An ad placed on a virtual building needs to render at high resolution when a user is standing next to it, and scale down gracefully when viewed from a distance. Dynamically managing creative resolution across a real-time 3D environment — especially at scale, with thousands of concurrent users — introduces rendering and performance challenges that current AdTech infrastructure isn't designed to handle.

There's also the question of responsibility: does the AdTech platform manage creative delivery at appropriate resolution, or does the metaverse environment handle that? That line hasn't been drawn yet.

Work on VR advertising has already surfaced some of these challenges. The demand-side ecosystem — DSPs, ad servers, creative specifications — simply isn't equipped for 3D ad formats. There are no widely adopted standards for immersive creatives, no common bid request vocabulary for spatial advertising.

On the supply side, metaverse platforms themselves are exploring 3D object monetization and new rendering architectures. One approach worth watching is distributed assembly — rather than loading an entire high-fidelity environment at once, assembling it from components sourced from different systems. This could reduce the performance bottleneck that makes large-scale programmatic in immersive environments so difficult today.

The Two Core Challenges

Stepping back, the barriers to advertising in the metaverse fall into two categories.

The first is attitudinal. There's healthy skepticism in the industry about whether the metaverse represents a real advertising opportunity or an expensive experiment. Building the audiences that would justify that investment requires convincing enough people — users and brands alike — to participate meaningfully in virtual environments. That's a slower, more social process than any technical build.

The second is technical and standards-based. Connecting the existing programmatic ecosystem to virtual worlds requires unified, open standards — likely developed through a body like IAB, following a similar path to how in-game advertising and CTV standards emerged. That process takes time, requires industry coordination, and depends on the metaverse itself stabilizing enough to define what those standards should cover.

Neither challenge is insurmountable, but both require sustained effort from across the industry rather than any single platform or vendor pushing a proprietary solution. The metaverse, almost by definition, needs to be built in the open to function the way it's been envisioned.