Disney, P&G, LVMH and other big names have invested in chief metaverse officers. Do companies really need them?
Advertising giant Publicis Groupe SA introduced the newest member of its C-suite at a technology conference in Paris this year. He goes by Leon. He's the chief metaverse officer.
Publicis wants Leon to help blue-chip clients like Walmart Inc., UBS Group AG and Nestle SA understand what the blockchain, NFTs and a more immersive internet experience could mean for their businesses. The stakes are potentially big: McKinsey & Co. consultants estimate that annual global spending related to this virtual landscape could reach as much as $5 trillion by 2030.
Leon has a LinkedIn profile, an email address and a French accent. But he doesn't get a paycheck: Leon is a lion-esque digital avatar.
While Leon isn't human, companies are increasingly hiring real people to help them navigate the so-called “meta-jungle.” Firms as varied as consumer-products giant Procter & Gamble Co., talent manager Creative Artists Agency (CAA), Spanish telecom carrier Telefonica SA, luxury-goods maker LVMH and wedding-registry retailer Crate & Barrel have all decided they need a chief metaverse officer.
Though a recent tech-sector downturn has hit metaverse stalwarts like Meta Platforms Inc. and Roblox Corp. particularly hard, it hasn't stopped firms from doling out million-dollar paydays to new executives as a down payment to secure their digital future. Gartner Inc. analysts say one in four people will spend at least an hour a day in the metaverse within a few years. What we'll be doing there isn't clear, but P&G, for one, hopes it will involve engagement with Crest toothpaste or Herbal Essences shampoo.
“Brands need to get closer to their customers, and the metaverse is a channel to do that,” said Hamza Khan, a McKinsey partner who co-leads the firm's metaverse efforts. “Compared to the early days of e-commerce, this time around brands are a lot more active a lot earlier.”
Pressure to keep up with tech trends has spawned new C-suite titles for decades. The 1980s saw the rise of the chief information officer, who understood the inner workings of IT and how it applied to broader business strategy. Later, chief technology officers emerged as big-picture thinkers who could evaluate developing technologies and how they might be used in the long term. More recently, chief digital officers have sought to modernize outdated business practices so companies don't get “Amazoned,” or steamrolled by a nimbler, more tech-savvy rival.
Digital FOMOChief metaverse officers first appeared at video-game makers, where immersion in a digital universe is central to the products. But the role has been popping up at more staid institutions dipping their toes into web3.
P&G launched a digital platform called BeautySPHERE this year and reimagined a popular TV ad from the 1980s into a video game. Nike Inc. bought a virtual sneaker company and created a world modeled on its real-life headquarters. Starbucks Corp. is introducing coffee-themed NFTs, or non-fungible tokens, linked to its customer-loyalty program. Walmart might create its own cryptocurrency. Luxury brands like Gucci, Balenciaga and Dolce & Gabbana have brought their fashions to virtual domains in the hopes of converting extremely online youth into real-world buyers of pricey handbags, watches and jewelry.
Few of these experiments have made money. But that's not the point right now. Many big companies moved too slowly to embrace other technology, and history isn't kind to latecomers. At Walmart in the late '90s, e-commerce wasn't taken seriously. Its website was initially set up under a stand-alone company. Store managers blanched at putting the site's URL on shopping bags, for fear of sacrificing in-person sales. Such dismissal and delay opened a window that Amazon. com Inc. exploited to become a giant.
Call it metaverse FOMO. Bosses feel it. Crate & Barrel Holdings Inc. Chief Executive Officer Janet Hayes said it's “essential” that the company has “an impactful presence in the metaverse.” Walt Disney Co. chief Bob Chapek said the metaverse will “create an entirely new paradigm for how audiences experience and engage with our stories.” At CAA, it will influence “shifts in content creation, distribution and community engagement that drive significant opportunity for our clients,” President Jim Burtson said.
Translating that talk into action is the job of executives like P&G's Ioana Matei, whose title is head of emerging and immersive technologies, and LVMH's Nelly Mensah, vice president of digital innovation and emerging solutions at the home of Fendi and Bulgari. Disney's man in the metaverse, Mike White, is senior vice president in charge of next-generation storytelling and consumer experiences. At Publicis, Leon the avatar acts as an “ambassador and guide” in the metaverse, a spokeswoman said, while in reality the company has more than 1,000 employees creating web3 experiences for clients.
It's common for now for newly named metaverse mavens to hold on to other responsibilities. Take Crate & Barrel's Sebastian Brauer. His day job is leading product design and development, but he says he spends about 20% of his time on meta-duties like strategy, outreach, and finding ways to bridge physical and virtual domains.
Brauer's background is in design — his mother is an architect — and he admits he isn't a tech savant. An Ecuador native whose passion for technology was sparked by his first iPod, Brauer said he got the metaverse gig after talking to Hayes, the CEO, about the success he had trading crypto and NFTs.
“She had the courage to say this is something we want to learn about and decided to appoint me as leader,” he said.
Winning Over Metaverse SkepticsThe ideal metaverse chief can speak as fluently about AR and VR as she can about sales and marketing, according to Cathy Hackl, who helps companies set up their meta-business units and claims to be the “world's first chief metaverse officer” — a title she bestowed upon herself.
“They're not easy to find, but there are people who straddle both of these worlds,” she said.
Metaverse chiefs need to forge external partnerships and win over internal skeptics, adds Wendy Doulton, managing partner at Katalyst Group, a consumer tech recruitment firm. Joanna Popper is one example: The newly minted chief metaverse officer at Creative Artists Agency hails from HP Inc., where she ran its virtual-reality efforts, working with studios like Disney and Paramount. Earlier, she held roles in marketing, consulting and investment banking. CAA, whose Hollywood clients include actors Tom Hanks and Reese Witherspoon, also represents NFT artists like Micah Johnson and, through a separate partnership, has invested in metaverse entities such as NFT marketplace OpenSea.
Popper said her role is to “build a metaverse strategy” by making investments, partnerships and content on behalf of clients, while ensuring the entire 3,200-person agency understands how critical it is. She said she was courted by companies in a variety of industries for chief metaverse officer roles before settling on CAA.
Popper's unique skill set is the reason why chief metaverse officers can attract compensation packages upwards of $1.5 million, say those with knowledge of their contracts.
Another approach is to simply tap someone internally who gives the organization a bit of credibility in the metaverse, as Crate & Barrel did. Since being hired, Brauer has recruited a small “think tank” of like-minded colleagues who find time outside their regular duties to strategize about web3. “We're not rushing into it,” he said. “We're privately held, so we have no pressure.”
Early Innings of the MetaverseHe might not feel pressure, but the tech sector's recent rout could prompt the metaverse's biggest players to rethink their ambitions. Meta, the tech giant formerly known as Facebook that rebranded to emphasize its pivot to what CEO Mark Zuckerberg calls “the next frontier,” is slowing the pace of long-term investments after the company's first-ever quarterly revenue decline. A Meta spokesperson declined to comment on the topic of chief metaverse officers, but previously has said that the company is looking to fill various leadership roles in areas like AI, gameplay and machine learning.
Shares of computer-graphics chipmaker Nvidia Corp., which wants its Omniverse platform to undergird the metaverse, have fallen by more than half this year as demand for PCs declines. Roblox, the video-game platform that houses immersive experiences for brands including Gucci, Chipotle and Ralph Lauren, also delivered disappointing results, with daily users falling short of expectations.
Crypto winter is upon us, purchases of NFTs have slowed, and increasingly cost-conscious companies need to focus on what will actually make them money. Brauer acknowledges as much: “The last thing I want to do as we head into a potential recession is consume company resources,” he said. “But I see this as investing to grow. It's R&D. This train is coming.”
CAA's Popper said the downturn actually creates an “opportune time” to build. “This is early innings in a long extra-inning game.”
Whether these early evangelists will still be there in the later innings is unclear. Just because they got the role “does not mean they are prepared to lead it for the next 5 to 10 years,” said Nada Usina, an executive adviser and recruiter at Russell Reynolds Associates. “When you start to scale, you have a different leader step in. The metaverse will continue to evolve, so the notion of a chief metaverse officer is also fairly dynamic.”
In other words, Leon better watch his virtual back. It's a jungle out there.