Virtual Reality Advertising

Virtual Reality (VR), often the plot device of futuristic science-fiction stories, has actually been around for some time now. Both YouTube and Facebook have been supporting the adoption of 360-degree videos since 2015, Nintendo’s ill-fated “Virtual Boy” was released way back in 1995, and Oculus (a company Facebook would later purchase for $2 billion) debuted their popular Rift VR headset on Kickstarter in 2012. Even so, VR should be considered an emerging market, as only now has the technology finally caught up to the demand. And as consumers are introduced to this new medium, there will be a virtual gold rush as advertisers seek out new ways of engaging with users.

VR content can be viewed in multiple ways. Smartphone users can view 360-degree content (content that has been recorded on omnidirectional cameras) by moving their phones around in real space, allowing them to view videos from different angles. The effect can also be accomplished on a computer by moving a mouse around. While using “low-cost” options like smartphones and computers can often be a fun way to interact with content (and has helped spark interest in VR), these options only offer users a limited VR experience. The driving appeal of VR is in its ability to create fully immersive experiences that don’t need to be grounded in reality, but in order to experience the full extent of what VR has to offer, users need to use a Head-mounted Display (HMD). These headsets combine many advanced technologies, like gyroscopes, motion sensors, spatial audio headphones, HD screens, and fast computer processors. The gyroscopes and sensors allow very sensitive tracking of the head, body, and hands. This allows the crisp HD screens to show a simulated world that responds to the user’s physical movements, just like the real world. Headphones with spatial audio capability allow directional sounds that envelope users. These components are important for creating immersive experiences that feel “real”; however, they have historically also raised the price of HMDs out of reach for the average consumer. Even though VR enjoyed lots of early hype, by 2017 reports showed consumer interest in VR was declining as a result of the high cost of the technology. Since then though, companies have been able to lower the cost of adoption drastically, while at the same time improving VR hardware and software significantly. This has caused a renewed spike in consumer interest as the hardware has now become affordable and accessible. According to Grand View Research, the global VR market will grow to 62.1 billion dollars by 2027. Currently, VR is most commonly used for entertainment applications such as video games, 3D movies, and social worlds. According to a study from Ericsson Consumer Lab however, shopping was the top reason users were interested in VR. Interestingly, 64% of respondents stated that their interest was in “seeing items in real size and form when shopping online”. That should be a call-to-action for advertisers.

We live in a distracted world. For example, an in-home eye-tracking study Facebook IQ commissioned revealed that 94 percent of participants kept a smartphone on hand while watching TV. This can make it difficult for advertisers to reach consumers, as their content often gets tuned out. However, VR creates a new world around users. A world free of distractions, with a tailored focus of attention and obligatory user interaction. More than that though, VR promises to re-define the advertiser-consumer relationship. In essence, VR could mean an end to the enraging ads of the past. Lithium Technologies recently polled 2000 customers aged 16-39, and the results showed that 74% of the interviewees found the advertisements in their social media feeds intrusive and irritating. Intrusive advertising alienates customers, however in the modern landscape it can be difficult to attract attention without becoming intrusive.

Unity believes the answer to intrusive ads is a “virtual room” users would be transported to for brief periods of time. This would allow users to experience advertising without it becoming a distraction to games or movies. While inside this room, users would be immersed in a fully interactive branded environment where they could engage with products or services. These ads could be targeted, allowing users the chance to interact with the ads they would likely be the most interested in. And creating in-person experiences will drive empathy, allowing advertisements to have a deeper impact. This won’t be the only method for advertising with VR, however. Product placement will allow advertisers to seamlessly embed ads within VR gameplay. For example, game characters could wear branded apparel, and in-game posters or billboards could portray real-world brands. VR could potentially change the hospitality industry as well by allowing hospitality brands to recreate aspects of their travel experiences in VR. Imagine being on the fence about what your next vacation should be, and then spending a few minutes enjoying a virtual luxury cruise: enjoying the sun, waves, entertainment, and service. This might be just the push a consumer needed to go ahead and book the cruise, and how convenient that they can order the tickets without even taking their headsets off!

VR Advertising is not without its limitations, however. Laws tend to lag behind technological advancement, but eventually they do catch up. We know already that the ASA treats video content with greater sensitivity than still images when it comes to rules on “harm and offense” or “social responsibility”. We should expect that VR ads will be scrutinized more severely do to their more immersive design. Precautions will need to be taken by advertisers to make sure ads are VR appropriate, as well as age appropriate. Another challenge is that the act of using HMDs is often culturally viewed as “dorky” due to how large and clunky the headsets tend to be, and how clumsy users can appear as they play virtual games. In order to achieve widespread VR adoption, advertisers will need to market the technology with positive traits like intellect, youth, and success. The focus will need to be on the content and experience of VR, and not how users look while they are wearing the tech. Also, as with any connected technology, it is only a matter of time before cybersecurity issues are raised. Up until now, VR hasn’t been widespread enough to attract the attention of hackers, but as adoption rates grow that will likely change. New technologies will require new best practices to be formed around cybersecurity, and users will have to choose how much risk they are willing to accept.

Even with these challenges, the benefits of creating immersive advertising for attentive users is too good an opportunity for advertisers to miss out on. Brands that are able to capitalize on this new medium will set themselves apart from their competitors. They will also have the opportunity to re-imagine the relationship between advertisers and consumers moving forward. 

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