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Hands holding a virtual reality headset: Virtual reality in advertising.

Will Virtual Reality in Advertising Finally Break Out?

March 22nd, 2017   ||    by Todd Wasserman   ||    No Comments

Virtual reality in advertising got a running start a few years ago. AdvertisingAge reported on industry giants like Coca-Cola, Pepsi, and Marriott releasing VR ad “experiences” that experimented with the new format. But in the three years since, there have yet to be any breakout VR ad experiences. Nothing has gone viral, with the exception of Pokémon Go, an augmented reality (AR) game. And Pokémon Go wasn’t conceived as an ad vehicle, even if some marketers later added ad-like features.

There’s a decent chance a VR or AR ad experience could go viral this year. While the more expensive Facebook-owned Oculus Rift hasn’t caught on as hoped, Google claims an install base in the millions for its cheaper Google Cardboard, giving advertisers a whole lot more of an audience to work with—and possibly more of an industry trend to pay attention to.

Access En Masse

One of VR’s greatest strengths is that it can “transport” viewers to new locales. Early experiments with virtual reality in advertising used VR to simulate exclusive access: Coca-Cola’s 2014 Oculus experience let users virtually score a goal on the pitch, while brewer Dos Equis launched a three-minute experience with The Most Interesting Man in the World that took viewers to a haute party (recounted by Mashable). Fashion designers have also run with this idea of exclusivity—The Wall Street Journal showed Jason Wu shooting himself in VR as he prepared for his fall 2016 Fashion Week show, and Dior used VR for a behind-the-scenes look at the brand.

And then there’s shopping. AdvertisingAge shows how New York clothier Apartment by the Line employs a virtual display of its store that shoppers can access from anywhere. Consumers listed shopping as the number one reason they were interested in VR, according to a 2016 Ericsson ConsumerLab study; some 64 percent of respondents cited “seeing items in real size and form when shopping online” as the primary draw.

Interestingly, the ability to tailor advertising and retail experiences on a more personal level is something automated TV buying has been working to enable for some time, through the use of more accurate TV metrics and targeting data.

Stick to What You Know

VR isn’t cheap, however. An estimate in a CMO.com article puts the cost of creating a VR experience at anywhere from $50,000 to $1 million. Mobile-app developer Thinkmobiles claims developers can create a VR game for as little as $5,000. Cost is one reason many advertisers have so far shied away from VR: Just eight percent of marketers currently use VR in their advertising, per a survey from Yes Lifecycle Marketing cited in AdvertisingAge.

As of now, VR has been hyped so much it’s hard to gauge its potential. The technology offers advertisers the chance to innovate—as well as another audience-targeting channel—but marketers will have to know the audience is actually there. Automated buying platforms might also find a place with the new technology, but for now programmatic fans will probably find it more useful to stick with proven mediums, like live TV, which continue to draw large audiences.

Perhaps someone will launch a hit like Pokémon Go, only in VR. This could spur renewed interest in VR in the way Pokémon did for AR. Or maybe a string of modest hits will ensure VR keeps growing steadily, marking 2017 as a solid building year and keeping the technology on well-informed advertisers’ radars. But as of now, VR has yet to emerge as the sort of world-changing technological innovation some people predicted.

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