The Future of VR and AR in Marketing Campaigns

Marketers have to find increasingly innovative ways to reach and entice customers. This means having more interactive visuals to accompany their ad copy. In the past 2-3 years, there has been a shift towards video advertising on mobile and desktop. In fact, Facebook video and YouTube are the two most popular content distribution channels for brands and marketers. Experiential marketing is the new standard for brands, as users are becoming disillusioned by unengaging static ads and pre-roll videos. As part of a movement to take brand engagement to another level, the terms VR and AR have become increasingly prevalent in the past 3-5 years. This time, they have been discussed more frequently in relation to digital marketing. For brand marketers who may not understand what they stand for or they are both different, here’s a brief run-down:

VR (Virtual Reality): A simulation of a realistic, lifelike scenario or environment that is computer-generated.

AR (Augmented Reality): A view of the real world “augmented” with an added element that can be visual, haptic, olfactory or visual.

The Main Appeal:

If there is are two things today’s media landscape teaches us is that users want to 1) be engaged and 2) be an active participant in media messages–especially digitally native users. In fact, a 2016 survey showed that 74% of millennials are “tired of brands shouting at them.” What’s great about VR and AR is its prioritization of the consumer as an active participant with agency and control. Both virtual and augmented reality offers a visually immersive experience that tops TV or video advertising. For CPG brands, a hands-on feel of what their product or service can offer can be beneficial for customer acquisition. For example, to help their summer sales in 2013, Ikea released a feature in their app that allows shoppers to see how different furniture products would look and fit within their homes. Because VR and AR are relatively new features, they are more memorable within marketing campaigns because there are less of them. The brands who spearhead VR and AR campaigns are sure to stand out among the mass. Today’s economic offering is not just the product itself, but the experience that comes along with it, also known as the “experience economy” i.e. the product benefits, visual design, as well as how it is advertised.

Where we see it going:

Right now, the major VR trend we see is the 360 videos, which are common on Facebook. These videos are especially popular in the travel sector to market vacation packages or flight deals. VR media also engages audiences and is seeing increasing success in social media marketing campaigns, as well as overall marketing strategies. We see VR and AR becoming a core part of marketing efforts in coming 3-5 years. The strident moves towards this have already started in 2017, but it will expand in 2018 beyond video. The major issue with making VR and AR mainstream is that the visual experience requires headsets or headgear–which are often quite clunky and overpriced. In addition, the environments they take place in are not elaborate or developed enough to feel entirely real. This is why marketers are slow to adopt this trend—it seems to be a fun buzzword rather than technology marketers are unanimously capitalizing on. Of course, when the VR glasses become more portable, VR and AR gadgets may become a tech staple in every American’s handbag in the near future. Marketers: Start thinking about how you can incorporate VR and AR into your marketing efforts. Do you need to? What would these virtual and augmented environments look like? You don’t need an ironed out strategy now, but you need to start thinking about it today.

Where the Tech Giants see it going:

The major tech giants like Google, Facebook and Amazon have already made efforts to develop technology to experience VR and AR. In 2014, Facebook acquired Oculus Rift, a VR headset manufacturing company. With the VR headset, they released Facebook Spaces, an app where you can experience virtual reality by interacting with friends in different locations. Last year, Zuckerberg announced his dream of getting 1 billion users into VR—that’s approximately half of the users on the platform itself. Google was another early adopter, with their headset Google Cardboard and their VR platform, Daydream Viewer. In fact, global search interest in VR grew four times in the year 2016 itself.  Amazon is the last tech giant to jump in the VR and AR bandwagon. In the latter half of 2017, they developed a service called Sumerian, which makes it easier to create VR and AR experiences within minutes—no software purchases needed, all you need is your Amazon account. This kind of platform is a new asset to a marketer’s toolkit because they don’t need to hire a 3D graphics specialist. This platform alleviates a lot of the uncertainties marketers have about VR and AR: How in the world do you create or make it, and we don’t, who do we task this to? With Sumerian, marketers can focus and strategize more on the creative aspect of the VR/AR environment as opposed to nuts and bolts of the technology itself. The question of whether VR and AR will become mainstream is not one among the major tech companies, it is who will make this technology mainstream—and how soon.

How to measure ROI and KPIs with VR marketing campaigns:

Because VR is a relatively new channel, marketers aren’t sure how to track performance, or how to identify KPIs. Since there is no way to measure the excitement or emotions that users get when experience your VR advertisement, the best practice is to treat VR as a video campaign. The metrics for measuring video performance: Views, unique users, view-through rate, watch time, can all be adaptable to the VR medium. A simple formula created by IT service, iFlexion, calculates the ROI of VR as follows:

Investment/Engagement + Time immersed in VR + Compelling experience = ROI (brand affinity + emotion + probability of return).

There are already a few companies that specialize in VR analytics. Here a few depending on what KPIs marketers want to hone in on:

  • InstaVR offers marketers a heat map of viewers watching your VR experience
  • Ghostline gives biometric information such as a viewers location, height, or scale of their environment.
  • Retinad VR provides recommendations about improvements that can be made to your ad campaign to improve engagement.

To determine whether your agency or brand should incorporate VR and AR into marketing efforts, what would be beneficial is a cost/benefit analysis. Perhaps not every brand should get a headstart into VR and AR because their product/service may not be incredibly interactive, or suited for the VR or AR environment. Consider the budget needed and the incurring costs of the equipment and the capabilities of your agency, as well as where this kind of advertisement would yield the highest ROI. Right now, Facebook and YouTube are the major platforms that are great for 360 virtual reality videos. As the technology becomes more adaptive and mainstream, new platforms may come out of the woodworks that can handle more advanced forms of VR and AR. If you find that your target audience would engage well with these formats of advertising, begin a general plan of action for VR or AR implementation, optimization, tracking, reporting of performance. It doesn’t have to be fool-proof now, as the technology is still in its early stages of adoption. However, beginning a loose plan can provide an initial framework for how to approach VR and AR when it does become mainstream.

Also published on Medium.