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24.02.16

Is Virtual Reality a Realistic Endeavor?

Ben Barenholtz, Senior Director, Global Marketing

The chatter around virtual reality is hard to ignore. If you measure influence by 2016 Consumer Electronics Show (CES) standards, then it would be easy to say VR is definitely about to be a thing.


More than 40 VR-related exhibitors set up camp at the CES Gaming & Virtual Reality Marketplace this year. The Marketplace grew 77 percent over its 2015 CES footprint, according to the Consumer Technology Association.

 

Then there are the forecasts: Piper Jaffray, an investment research firm, forecasts 12.2 million VR headsets will ship in 2016. By 2020, Juniper Research anticipates that number will grow to 30 million.

 

The expectations for virtual reality as a medium are skyrocketing, but what does this mean for advertising? Is VR an avenue worth pursuing, or is it just a pipe dream? As advertisers, we have to consider whether we’ll gain valuable intent signals from VR as a new media channel - or just more data noise.

 

Consider the Major Players

 

As of this moment, Sony, HTC, Facebook, Google and Samsung all have their own virtual reality products. Amazon and Apple are the only other two major tech companies that do not have a VR product – although Apple is reportedly working on the technology.

 

When industry heavyweights are making significant investments, you pay attention. Especially considering their long history of ad-supported technology, like video advertising and live streaming apps.

 

And some aren’t even waiting on the rest of us.

 

It’s Already Begun

 

Even though virtual reality is in its infancy, some advertisers are throwing their hats into the ring.

 

In November 2015, Facebook debuted the first virtual reality-style ads for major brands, including AT&T, Nestle, Samsung and Mondelez.   

 

GE has been experimenting with VR for more than a year, running its VR animated video on the New York Times’ proprietary app.

 

YouTube’s 360° Channel hosts a variety of virtual reality content supported by paid advertisements.

 

The Variety of Content

 

Given the rise of game advertising, it isn’t hard to imagine VR advertisements on gaming content. But as Ikrima Elhassan, co-founder of Kite + Lightning game studio, indicates, “Gaming is going to be the tip of the spear that ushers VR into the mainstream.”

 

Already, some VR companies broadcast live sports and short-length, live-action movies over VR headsets. Industrial companies are discussing the possibility of VR-enabled training courses, and universities could soon use VR headsets to conduct campus tours with prospective students on the other side of the world.

 

The possibilities for developing VR content are seemingly endless, and that looks promising for advertisers. It opens up new opportunities for targeted messaging beyond the digital world we already know.

 

And Then There’s Mobile

 

While most VR headsets are currently designed for desktop PC and gaming console users, mobile headsets – those designed to connect to smartphones – are gaining traction. Google, for example, shipped 5 million of its Cardboard virtual reality viewers (literally made of cardboard) as of January 2016.

 

We also know mobile advertising is the future of digital. As more content is consumed on mobile devices, advertisers and brands will shift spending to these devices.

 

Advertisers may also be able to appeal to more casual users on mobile. Not everyone has a desktop or gaming console at their disposal, but many people have a smartphone where they can be reached.

 

The Verdict

 

While virtual reality tech is certainly nascent, there appears to be quickly approaching opportunities for more advertisers to enter the market. Most of the major headsets will be available by mid-2016. If you’re just getting your head around the fast-paced world of ‘digital’ or ‘mobile’ advertising, don’t look now. Here comes the virtual world.