Virtual Reality (VR) is expected to come of age in 2017 and that means it will play a more significant role across various industries for years to come. One of the obvious fields to experience the impact of VR technology will be advertising.
The primary reason for the popularity of VR can be attributed to the quality and ubiquity of mobile devices. A basic piece of cardboard can now turn a smartphone into a VR headset.
This is evidenced by Google Cardboard that has already delivered millions VR experiences around the world cost-effectively. It’s basically the first step in a technological journey that grows to deliver more power experiences (for example Daydream).
The buzz surrounding VR has a lot to do with the potential the technology has to enhance our daily lives. Further, VR Film is also expected to be highly immersive making you feel present within the storytelling medium. So obviously this has got marketers highly excited about the possibilities.
The same is true for concerts and sporting events. It will be the closest thing to actually being there yourself. As VR quickly becomes our new pseudo-reality, businesses will be challenged with finding ways to monetize it.
So what does this mean for brands? How will they adapt their communication to take advantage of this medium? To answer these questions, we will have to first properly define VR.
VR vs. 360-Degree Video
When considering adverting, we have to first distinguish between 360-degree videos and other immersive experiences. 360-degree videos are there to offer basic VR experiences for those who don’t have proper VR hardware (like Oculus Rift).
This means that one offers just a point of view while the other will provide a more immersive experience.
Further, we can also categorize VR experiences depending on the complexity and level of immersion. This will also be directly related to the cost of the hardware and the cost of developing the experience. It will also indicate a variable when it comes to the audience.
As a result, at the moment, 360 video provides that largest audience for marketers to target. Further, it’s also freely available on both YouTube and Facebook who have massive audiences of their own. The audience for HTC Vive and Oculus Rift is still quite small.
VR will also naturally grow in the live content market, especially within the sports. NextVR and Fox Sports are partnering up to deliver live VR sports experiences while Oculus VR and Turner Sports have already established a partnership to deliver live streaming sporting events.
Primary Attraction for Advertisers
Deep immersion is the primary attraction for advertisers as it has an enormous potential to make an emotional impact. Even interacting with a screen won’t come close to the immersive experience offered by VR.
At the same time, developing content for VR isn’t easy, but the rewards of enhanced engagement is impossible to ignore. As a result, both brands and advertisers are actively pursuing opportunities in both 360 video and VR.
The challenge lies in simultaneously educating and qualifying brands on what’s actually possible to achieve within the constraints of the technology (to deliver a successful digital campaign). But the biggest obstacle will continue to be associated with creating content for VR.
Although the industry is still in its infancy, there’s already a massive amount of data related to mobile advertising that can be used to develop VR campaigns. Further, this data can also be utilized to enhance conversion rates.
The Rise of Augmented Reality
The release of Pokemon Go showed us that Augmented Reality (AR) can catch on like wildfire. Even though the craze was short-lived, it showed brands of the potential of AR and why it’s important to keep innovating even after finding significant success.
This also opens the door for brands to experiment with product demonstrations and brand storytelling. There are also opportunities here to develop immersive experiences within the store with readily available technology.
Research conducted by Ericsson ConsumerLab found that 64% of the respondents (smartphone users around the world) were only interested in VR to engage in online shopping. This means that they want to see the items as they appear in real life while online shopping.
Standards for VR/AR advertising are already being developed to help publisher prepare for the new formats and destinations for advertising. This will also include photos and 360 videos and guidelines to reduce viewer discomfort (caused by improper camera movement).
Further, measurement standards will also be defined. As VR provides a dynamic environment, consumer engagement will be multi-dimensional. At the moment, the Interactive Advertising Bureau (IAB) and Vertebrae are working together to develop metrics that can help justify ad spend.
The Bottom Line
VR and AR are here to stay, although it may not see a massive adoption by the mainstream in 2017. But the industry is highly creative and ever so often, new companies are popping up with their own unique take on it. So the future of the industry is somewhat unpredictable when it comes to the medium and the potential for advertising.
As the technology becomes cheaper, we can expect wider adoption from the masses. As this new medium evolves, we will probably see new advertising formats emerge and get refined over time.
There’s an enormous opportunity here for creative marketing to grow and thrive within this niche. But the challenge for marketers will be to get beyond the wow factor to actually influence the audience and enhance conversion rates.
How this will play out is anyone’s guess at the moment, but one thing is for sure, it’s going to be an exciting couple of years for the advertising industry.