Many of us have been living in a world that feels a bit like Microsoft’s metaverse for the past two years. From Outlook and Teams to LinkedIn and Xbox, Microsoft has built a growing network of digital experiences that keep many of us in its ecosystem throughout much of daily life.

While the experiences don’t yet connect to form the fully immersive digital world deemed a “metaverse” it’s clear they are well-positioned to become a key player. Recently, this ecosystem got a monumental reinforcement in the form of the biggest acquisition in the company’s history: A near $70B acquisition of Activision Blizzard, one of the largest video game developers and publishers in the world. Through this move, the embattled Activision Blizzard will receive a lifeline from Microsoft in exchange for the developer’s hits, including “Call of Duty,” “World of Warcraft” and “Candy Crush.”

Microsoft is not the first tech firm to make a significant move toward the metaverse, with digital players increasingly positioning for this future. From Facebook rebranding their parent company to Meta, to Snap acquiring a host of augmented reality companies, many digital companies see the metaverse as the next frontier.

These companies are recognizing the significant shift in how consumers are engaging with digital platforms and are placing huge value on the impact these platforms can have with Gen Z and beyond. But with the metaverse arms race accelerating and the benefits of digital engagements clear, how can brands win in these new worlds as they continue to develop?

Brands Building Digital DNA

As the metaverse continues to unfold, brands shouldn’t wait to start engaging. Early adopters will earn an advantage by diving in with the platforms today, building native credibility in a market skeptical of brands, while gaining a competitive edge on brands that are slower to adopt this next frontier.

Brands that wait until the platform reaches consumer saturation will not drive incremental benefit beyond that of an additional ad channel – the opportunity in the metaverse is much more significant. There is no better way to prepare your brand for the future than to jump in now and refine your digital strategy and presence as you go.

To help with this transition, Prophet has identified three key brand strategy questions to consider:

How Can Your Brand Meet a Need in Consumers’ Digital Lives?

Brands entering these virtual worlds shed their physical limitations and have an opportunity to rethink the value they provide to their consumers. The companies that win in this space are the ones that create experiences to meet a need within this digital ecosystem while reinforcing the brand equity strengths carried through from the physical world.

Nike was able to answer this question in preparation for the introduction of NIKELAND on Roblox, clearly identifying that they would be able to support consumers in digitally expressing themselves, both in lifestyle and clothing.

How Might Your Brand Come to Life Within a New Digital Environment?

The metaverse creates immersive opportunities for brands to build relationships in real-time, beyond the bounds of the sequential conversations that dominate social media. In the metaverse, brands must be wholly authentic and dynamically engaging – and the ones able to strategically translate their voice, imagery and experiences into this context will earn new levels of consumer favor.

While AI-based conversational technology is yet to be widely utilized by brands, we can look to advanced virtual assistants like Amazon’s Alexa or Samsung’s Bixby for inspiration on how brands will soon be capable of continuous, real-time conversations with consumers. These dynamic and infinite touchpoints will demand continuous on-strategy voice and tone to build brands within these new platforms.

Ultimately, How is Your Brand Going to Commercialize the Metaverse?

Commercialization in these digital spaces goes beyond anything possible today. It’s more than just selling products – digital engagements provide an unparalleled opportunity for collaborations and completely immersive branded experiences on platforms where creators have the most power.

As augmented reality blurs the lines between reality and technology, brands will have unprecedented context for consumers’ daily lives and will need to commercialize themselves in ways that feel authentic and value-added. When brands overstep their bounds or present themselves in overly commercialized or sales-focused contexts, consumers will perceive the integrations as creepy and reject the offerings entirely.

“The companies that win in this space are the ones that create experiences to meet a need within this digital ecosystem while reinforcing the brand equity strengths carried through from the physical world.”

Mark your calendars, brand watchers. We are getting ready to release our seventh edition of the Prophet Brand Relevance Index®, and it’s full of surprises. Without giving too much away, we can tell you that we have 96 new brands in the study this year, many of which landed in our top 50 brands. And as we’ve seen in previous years, relevance continues to be a key driver of growth – with the top brands outpacing the average growth rate in the S&P 500.

The new crop of winners shows that while relevance has always been a moving target, two years of seismic shifts in consumer behavior have solidified the way people adopt and abandon brands. And these changes go far beyond the obvious. Of course, digital matters more than ever. And we can see brands that have made intelligent moves to meet these cultural moments are those making the biggest gains.

For the second year in a row, that’s meant honoring how much time people are spending at home. It’s not just where the heart is—it is where the head is, where the body is, where everything is. And so, it is no surprise that every single brand in our top twenty-five represents an aspect of our home life. And a number of brands in the top 50 show that as the pandemic evolves and confidence builds, people are itching to come out of hibernation.

But more importantly, our brand thought leaders discovered that new patterns of relevance are emerging. The team includes:

• Scott Davis, chief growth officer
• Marisa Mulvihill, partner, global head of brand & activation
• Christine Brandt Jones, senior partner, global insights
• Chris Burzminski, associate partner

“We’ve found that the four components underpinning our relevance research are as meaningful as ever,” says Mulvihill. “Brands still derive their relevance from customer obsession, ruthless pragmatism, pervasive innovation and distinctive inspiration. Yet as we continue to refine the science of relevance and interpret post-pandemic changes, these components express themselves in new ways.” Based on responses from 13,500+ U.S. consumers, we looked at 293 brands in 27 categories. We’ve discovered that brands are finding success in our new normal by connecting with us through three distinct avenues.

Brands that solve life’s frustrating problems are leading the first path to relevance. These ruthlessly pragmatic, pervasively innovative brands stand out by fueling the current need for self-reliance and DIY confidence. As we recalibrate our routines through this increasingly digital life, we choose only the best support staff. We want appliances, products and services that are smart enough to enable a new reality spent mostly at home.

“Brands that solve life’s frustrating problems are leading the first path to relevance.”

Others win us over almost by magic, increasing relevance by speaking more to people’s hearts than their heads. Customer obsessed and distinctively inspired, these are the names that turn customers into fans, loyalists and collectors. Devotion and demand like this are born from experiences that make people feel good about themselves, whether by providing easy access to escape or luxury that makes us feel alive and special.

Then there are those relentlessly relevant all-stars that somehow do both, hitting us simultaneously in the head and the heart. It’s because they are easily personalized, making us feel like they actually know us. They connect us to our families, work and the world. They help us discover communities of others who share the same passions. They fill our intimate spaces with stories and sounds from the outside. They help us fulfill our goals to find happiness and strength. These are the brands brightening the world, every single day.

Get ready, brand strategists – 2022 is going to be your year. The last 18 months have been packed with plot twists, creating new opportunities for better brand activations and experiences. And it’s not just the progression of the pandemic, supply-chain challenges, rising inflation or ever-more-digital consumers that’s caused this shift.

It’s that authenticity matters more as people struggle to absorb all those changes. They’re switching buying behaviors and brands at an unprecedented level. One recent study finds that 75% of consumers have shopped in a new way, with 36% trying a new brand.

To keep customers and attract new ones, companies need to prove they support the greater good in a way that’s unique to their brand. That’s terrible news for brands not actively building and delivering against an authentic purpose that consumers can believe and relate to. But this approach offers wide-open growth avenues for those that can find better ways to connect with customers. We expect the savviest brands to lean hard into these five trends in 2022:

Brand Spending Makes a Comeback

Companies are increasingly aware that they can’t earn customer loyalty without a clear brand identity. There’s just too much noise in the market, and too many options for consumers to choose from.

Clear communication about what a company stands for requires investing in a well-defined brand identity and awareness. How can companies expect to make connections if their target audience is unclear about what they are? We expect to see a greater focus on brand with more dollars shifting –often from the demanding budget – into brand building. Additional resources will allow marketers to ensure brand efforts are clear, inspirational and delivered with energy.

We even think brand and demand may stop fighting and find love, as the two resolve tensions and work together in harmony. CMOs will develop integrated models where brand –the long-term efforts to drive awareness –and demand – which seeks to get audiences to act immediately – are synchronized with shared agendas and intertwined goals.

Got Purpose? Prove it, and Make Sure it Benefits the Planet

For years, we’ve known that consumers are increasingly choosing brands with a higher-order purpose – they want to buy from companies that make a difference in the world. This year, they’ll expect brands to put their money where their mouth is. They’ll want action, like Lush leaving social media because it’s become toxic for their customers, or Nike, investing tens of millions in countering systemic racism.

Sustainability and environmental concerns are especially important. Too often, companies isolate ESG and DEI policies, but they need to become central to brand purpose – a golden thread that winds through every aspect of the organization. ESG and DEI aren’t just about mitigating risks. These efforts add value to everything the company does.

“To keep customers and attract new ones, companies need to prove they support the greater good in a way that’s unique to their brand.”

Whether companies like it or not, protecting the planet is the No. 1 concern for both Gen Z and millennial audiences. Led by firebrands like 18-year-old environmentalist Greta Thunberg and 21-year-old gun-control activist David Hogg many see themselves as warriors acting to protect the planet. These young consumers can spot green or virtue-washing efforts from miles away and will punish companies that get it wrong.

All Digital? Nope. Never

Once upon a time, the business world envied those digitally native direct-to-consumer brands and the way they dinged the dinosaurs who shopped in brick-and-mortar stores. But with the defeat of Casper in the public markets, it’s clear omnichannel rules, and those D2C darlings have stampeded toward the mall. Warby Parker, Glossier, Allbirds and Wayfair are all proving that ­humans like to look, touch and feel what they’re buying.

Led by companies like Apple, Lululemon, Nike and Samsung, this trend toward experiential retail is already strong and will continue to grow. Levi Strauss & Co., for example, is opening 100 new stores this year, and Lego intends to open 174 new locations.

While people know they don’t need actual stores to transact, they do need them for experiences – especially as consumers long for post-pandemic connections. People have spent the last 18 months re-evaluating many priorities. They’ve learned that they love digital for cutting down on the drudgery in their lives, like grocery shopping and banking, so they can focus on the experiences that mean the most to them.

They do, however, want to experience products before purchasing, especially in certain categories, and we expect to see more brands open physical spaces.

The Decline of the Mega Brand

After decades of consolidation, conglomerates are starting to see the benefits of breaking up. With a CEO openly mocking the myth of synergy, GE is leading the way, followed by Johnson & Johnson and Toshiba Corp. More will follow as companies increasingly challenge the belief that one brand can work in many markets, and that bigger is always better.

Companies are asking themselves the hard questions: Can we continue to use a single brand, expecting it to be equally meaningful among different verticals, markets and customers? Is that one brand universally credible? And if not, when is time to switch that strategy?

Facebook’s recent decision to become Meta, illustrates another facet of this trend: More brands may increase a company’s agility, allowing it to pivot in more precise (and perhaps even more affordable) ways.

Midlife Crises Spark Unicorn Reinvention

Remember all those companies we admired back when BlackBerry dominated the market? Twitter (founded in 2006), Airbnb (2008), Pinterest (2009) and Instagram (2010) are all middle-aged now. No longer the cool kids, they need a refresher course in disruption. As they revisit purpose, they need to better understand empowered consumers and find new growth channels. How and where can they innovate as they face younger rivals?

To keep up, they’ll need creative Web 3.0 pivots. We’re already used to watching elderly unicorns struggle. Google used its transition to Alphabet to age gracefully, but once-huge tech brands, such as Jawbone, GoPro and Groupon, have languished from lost relevance. We expect plenty of big news and at least a few missteps as these almost-old digital natives reinvent themselves.

With rising customer expectations, companies across industries are investing in innovative experiences, digital marketing capabilities, and organizational change to attract and retain talent. But with fast-moving timelines and competing demands, they can’t always invest in storytelling, a key component in influencing and driving change.

Verbal branding—or the strategic deployment of language through tools like voice, messaging, content strategy and copy—plays a key role in optimizing the return on these investments, ensuring companies make thoughtful choices about their communications in these high-impact moments.

In this article, we offer three imperatives for organizations to consider when using their verbal branding to differentiate, deliver their promise, and win in the market.

Meet Customers’ Expectations for Personalized, Connected Communications

More and more, customers expect a consistent experience across channels – from mentioning a brand on Twitter to calling customer service. They expect their interactions to be seamless, with one channel easily picking up a conversation started in another (for example, starting in a chatbot and following up by phone—these two interactions use different systems but are ideally connected by a centralized customer data platform to create a unified customer picture). In short, customers want brands to recognize them as the same person across different channels and interactions.

While these channels and interactions have different formats, functions and requirements, they need to feel creatively and strategically cohesive. The implication for brands is ensuring that all these channels—whether automated or human-enabled—are on-voice and on-message.

But cohesive doesn’t necessarily mean uniform. The best service interactions modulate based on user sentiment. They can sense excitement, frustration, confusion, and adapt as needed. This can be achieved through both human and digital capability.

For example, it can be as simple as empowering call center reps with cues on how to identify customer archetypes based on emotion and providing discrete service journeys and scripts for them. This is particularly important for industries that customers approach with sensitivity or trepidation, such as financial services or healthcare.

“Verbal branding plays a key role in optimizing the return on these investments, ensuring companies make thoughtful choices about their communications in these high-impact moments.”

At the same time, brands using natural language processing tools, such as in-chatbot experiences, can similarly “train” their Natural Language Processing (NLP) tool to not only identify the customer’s desired “job to be done,” but to detect underlying emotion and adapt responses accordingly. For example, a chatbot that can sense a customer’s frustration about a delayed order, offer sympathy and quickly route them to live chat support, can help repair the customer’s brand perception in a tenuous moment.

Invest in Innovation—and its Expression

While many companies prioritize investing in new products and experiences, sometimes they don’t consider the importance of the words used to guide their audiences through them.

Rather than viewing product and expression as separate steps in the process, they should be developed in tandem as complementary assets, working together to shape how customers interact with and perceive the brand. Effective verbal expression (in this case, UX writing) bridges the gap between the layout and usability of the product.

Regardless of how brilliantly developed the product is, without clear and engaging written cues, the audience (customers or employees) may struggle to use or navigate it. More broadly, however, approaching innovation solely through a product lens misses an opportunity to embody the brand’s verbal identity. Effective copy can help a brand make a human connection with users that’s often not possible through design alone.

Brands should develop on-voice UX writing that has clear user goals in mind and reflects the likely emotional mindset of customers at various stages of their journey. Using this approach, copy can help drive self-progression or clarify complex topics in an engaging, on-brand manner—without disrupting the experience.

Brands that harness the strategic prowess of UX writing will excel at forming closer bonds with customers over brands who merely prioritize function in their innovations.

Use Storytelling to Galvanize Employees Around a Shared Vision, Meet Mandates and Drive Retention

The “Big Quit” is upon us. In an increasingly competitive talent market following a year that has upended what work looks like, employee expectations are rapidly changing. To meet this upheaval, impactful verbal expression can play a vital role in shaping experiences that respond to employee needs and catapult desired organizational change.

From crafting a meaningful shared vision to galvanizing employee sentiment, retaining key talent and attracting prospective candidates, transformational organization change requires a comprehensive accompanying voice and messaging strategy.

For example, how might we excite employees about new innovations? Inspire employees to care about new internal initiatives? Bring new hires into the corporate culture and values? Present a compelling case for change?

Like customers, employees are not a monolith. Different customer segments have different needs and respond to different ways of messaging. Companies with robust customer segmentation strategies can take the same approach with their employees, creating targeted messaging to meet specific employee audience group needs.

Taking a strategic messaging approach allows brands to connect external brand ambition to internal employee communication and experience, ultimately aligning the organization behind shared ambition, values, and purpose.

Just a year ago, I talked about how 2020 was unprecedented for so many reasons. And 2021 seems to be a “rinse and repeat” of the same themes, relative to the brands that showed up to surprise and delight us, as well those that failed or disappointed us. Once again, I turned to my 500 Prophet colleagues around the globe to help decide which brands won and which lost.

There was a lot to chew on. In a year when Square turned into a Block, Facebook became Meta and the Cleveland Indians transformed into the Guardians, the debates got intense.

For instance, last year’s clear-cut winner, Peloton, got votes on both sides. Is it a winner because people still love it? Or a loser since it just slashed its annual sales forecast by $1 billion, as more consumers head back to the gym? Zoom, another of last year’s winners, continues to be as integral to people’s workday as that second cup of coffee–and is on its way to becoming a leading tech sector brand.

Many mentioned the streaming wars, which rose to a whole new level. There’s the introduction of Paramount Plus. HBO Max is taking a gamble, streaming new theatrical releases, like “The Many Saints of Newark.” And then there’s Netflix, which may have seen new subscriptions levels drop but also saw “Squid Games” become the most popular show in its history, pulling in an astonishing 1.65 billion hours of viewing in just 28 days.

Some of our favorite ‘new’ everyday brands went public, including Sweetgreen, Roblox, ZipRecruiter and Instacart, while many crypto brands saw their market value aspire toward FANG territory, only to correct themselves dramatically.  Every year, we think we’ve reached the apex of DTC brands, only to have us see another set of stellar performers. This year, those stars include Away, the ever-expanding Bombas, weight loss king Noom and the “lit” cosmetic world of ColourPop and Glossier.

And while everyone wants to pounce on Facebook renaming itself as Meta (and this would be an easy one to put on our brand loser list) as a colossal misstep, we do think the jury’s still out and want to revisit this a year from now. It’s a strategy that’s worked well for Alphabet and Google and, if they pull off the idea of taking us all into the next digital era, exploring augmented, virtual and mixed reality technologies, while working deeply on the many issues facing the brand, this could be a different story a year from now

“Every year, we think we’ve reached the apex of DTC brands, only to have us see another set of stellar performers.”

We also took a close look at the sports betting business. While it’s currently dominated by FanDuel, followed by DraftKings, newcomer Caesars Sportsbook is also making a splash, vowing to spend $1 billion to build its fan base. That includes a deal putting its logo on the jerseys of the NHL’s Washington Capitals. Speaking of sports, we still embrace our love/hate relationship with Tom Brady as both the GOAT/Sports Illustrated Person of the Year, as well as becoming an increasingly influential commercial representative…see his star turn in Hertz’s new Tesla ads.

Finally, we still love our LEGO as it continues to lead the way in reducing gender bias and increasing inclusive play. We also love Target for putting the permanent kibosh on Black Friday, starting on Thanksgiving. Rarely do airlines get a mention, but three cheers to United Airlines for becoming the first to make vaccines mandatory, the first to fly passengers using 100% sustainable aviation fuel and the first to ensure that 50% of its flight school students are women or people of color. We also have to give kudos to Sesame Street, one of my favorite clients from a few decades ago, in continuing to give us all timely lessons on how to deal with racial challenges, inclusivity, diversity and empathy. It’s a brand that is as ageless as it is wise.

Now that we are done with the warmup act, let’s get into the winners and losers for 2021.

The Brand Winners

Moderna and Pfizer

It’s no surprise that Merriam-Webster named “vaccination” as the word of the year, injecting people everywhere with much-needed hope. Moderna and Pfizer top our list. (Johnson & Johnson misses, both because it was later for approval and because while its one-dose advantage could have been a game-changer, it suffered by being perceived as less effective.) With more than 8 billion jabs given, experts say vaccines are still our best shot at stemming the ongoing global health crisis and these two brands continue to lead the charge.

TikTok

TikTok is now so much more than the 1 billion monthly users who vibe with its dance challenges or laugh with its happy pranksters or wiseass dachshunds. TikTok directly influences all forms of entertainment, all forms of business and pretty much everything in between. Just a few years removed from Lil Nas X and his Old Town Road becoming the O.G. for viral musical successes, TikTok creators used Adele’s Easy On Me in almost one million videos in the first month after its release, helping it go viral on the app alone. To say that TikTok has become the No. 1 global influencing platform would be the understatement of the year.

Feeding America

I’ve never put a nonprofit on the list of winners. But Feeding America continues to astound us with its rapid growth, canny corporate partnerships and ability to connect people even in these divisive times. It’s grim, but the U.S. is finally hunger woke, recognizing that 38 million people, including 12 million children, are food insecure. Feeding America’s brand makes it easier to help and, potentially, see an end to hunger at some point in our lifetime.

Tesla (again)

In a year when many automakers saw sales decline due to supply-chain shortages, Tesla sales hit new records. And with revenues and profits that are beating analysts’ expectations, its soaring market value shows just how deeply people love the house that Elon built. Even more amazing? While Tesla’s cars still rank nearly last in reliability surveys, it sped past Mercedes-Benz to become the third most popular luxury ride in the U.S. (Lookout, Lexus and BMW. It’s gaining.)

Athleta

Think of it as the anti-Nike, with the determination to move in on Lululemon and the athleisure market. This Gap-owned retailer welcomed high-profile athletes like runner Allyson Felix and gymnast Simone Biles, who publicly broke with Nike over its treatment of women athletes. And, with the Power of She campaign, it’s winning with teens–and well on its way to becoming a $2 billion brand by 2023.

Taylor Swift

Demonstrating that she’s one of the best marketers in the business, the singer struck back against the music machine by re-engineering 2012’s “Red” album, igniting her fan base and winning new admirers. The centerpiece is a 10-minute version of the heartbreaking “All Too Well,” which became the longest song ever to reach Billboard’s No. 1. (Adios, “American Pie.”) We’ll just quote Ms. Magazine here on Swift’s feminist tour de force: “Taylor Swift didn’t just re-record an album—she reclaimed her humanity.”

Bitcoin

Yes, Bitcoin and cryptocurrency prices have fallen sharply recently, wiping out almost $500 million worth of value from the overall crypto market in just a few days. But cryptocurrency still had a breakout year, moving towards the mainstream. Celebrity endorsers are all in, with Tom Brady and Gisele Bündchen telling us, “I’m getting into crypto with FTX. You in?” And Matt Damon is representing crypto.com, which is also the new name of the Staples Center. Like electric cars and Tesla, Bitcoin still dominates any conversation about crypto.

The Brand Losers

Instagram

Some of the most disturbing allegations from Facebook whistleblowing centered on Instagram. Turns out the company has known for some time how toxic the platform can be to the teens who love it, with 32% of teens saying that when they feel bad about their bodies, Instagram makes them feel worse. Concealing that, in our book, is downright shameful. With just over a billion active users, it’s not going away anytime soon. The reports are damning enough that Lush, the body care products company, recently shut down its social media accounts, saying they risk customers’ mental health.

Billionaires in Space

I’m as eager as the next person to boldly go where no human has gone before, but companies like Richard Branson’s Virgin Galactic and Jeff Bezos’ Blue Origin show they’ve got the wrong stuff. At a time when tension between the haves the have-nots keep growing, especially within Bezos Amazon world, these ego-boosting launches are about little more than celebs in space.

Chevrolet

We’ve always wanted to love the Chevrolet Bolt. Not only is it the second-best-selling EV brand in the U.S., but it also beat No. 1 Tesla with a genuinely mass-market EV. And its vow to be all-electric by 2035 got our attention. Then came the massive recalls for defective batteries, with severe design concerns that shut production down for weeks. Then Bolt owners got more bad news when GM advised them to park at least 50 feet away from other cars to reduce the risk that a spontaneous fire could spread.

Robinhood

Robinhood started as an exciting brand, promising to democratize investing. With no fees, it’s tempted 19 million new investors into the stock market, gathering $95 billion in assets under custody. But with the GameStop frenzy, it closed trading, earning the enmity of both regulators and the Reddit bros that are its customer base, with a backlash that’s still generating contempt. The move was anything but customer-centric and now the brand is paying for it.

Casper

For years, branding experts (even us, sometimes) loved the way Casper, a DTC upstart, vowed to “own” sleep, with showrooms offering complimentary naps and ancillary products. But a year after its disastrous public offering and mounting losses, it’s gone private again. Besides illustrating its operational immaturity and brand braggadocio, it underscores the DTC dilemma. Acquiring new customers is expensive. And really, people don’t buy new mattresses all that often.