Virtual Reality: What Advertisers, Brands, and Marketers Need To Know (Part 1)

Despite the presence of the Google DayDream on my desk, and me compulsively buying VR apps and games like “Wands,” I’m not sold on Virtual Reality as a mainstream consumer product.

In fact, I’m going to go so far as to suggest that virtual reality will never be a mainstream consumer product in the sense that we think of an Amazon Echo today or a smartphone ten years ago. I hope I’m wrong. None of us know what’s going to happen tomorrow, let alone ten years from now; but that’s the prediction I’m going with based on what I’m going to lay out for you here in this series.

By the sounds of it, most of you would agree with my assessment on virtual reality, but that may be because you’re following the news and see all these trend pieces out there about VR sucking, or being overhyped, or suffering from underwhelming sales during the holiday shopping season last year. Only that last part is true. VR-related sales did suck in 2016.

As far as the other stuff goes, we just let the same idiots who overhyped social media overhype virtual reality after the unveiling of the original Oculus Rift back in 2012. For as many smart and hard-working journalists there are, never forget that there are twice as many who are beholden to an abusive and corrupt business model that’s dependent on questionable metrics. Questionable metrics meant to impress people who don’t know any better. So, if they think VR is the thing to squeeze out some more page views, those people are going to churn out as much glowing coverage on the medium as they can, and turn on it later when the opposing narrative becomes the way to go to keep those page views coming.

For what it’s worth, and having been one, I don’t blame the journalists. I blame the MBAs and other corporate types running those media outlets. Life is hard. It’s harder when your profession has been under constant assault by corporate greed and tech companies that believe content itself has no value, only the distribution of it.

If you’re looking for an excellent historical example of what I’m talking about, look at the glowing coverage that surrounded tech companies between 1994 and 2001. Then look at the harsh coverage that came to those same (surviving) firms until 2008 when the narrative flipped and the media loved tech companies again.

It’s only recently we’re watching a media heel turn on tech by calling Google, Amazon, Apple, Microsoft, and Facebook “The Frightful Five.

There are exceptions to this, like MySpace that got a lot of coverage (most of it negative) and Google (almost all of it positive) in between those periods, but this is the cycle we’ve seen from the media as it relates to technology since the ‘90s. VR is no different. The media loved it until they needed to hate it.

Let’s put all that aside though — along with what I think with my prediction — and take a closer look at the current state of things for virtual reality and the advertising industry.

Why am I throwing the ad industry into this?

Whether we like it or not, advertising dollars draw developer and corporate interest. Without that money, we won’t know what we have with VR because a lot of the development is going to come from academia and publicly traded companies instead. The latter involving businesses that may abandon the medium if their shareholders get pissy and want to focus entirely on short-term wins over long-term ones which is how they typically think. That’s not always a bad thing, the part about academia and companies driving progress in VR anyway, but it does mean the pace of growth for VR going to be slow. So slow that we could all lose interest in VR (again) until there’s renewed interest in the field because someone did something like figure out how to help couples get each other off from long distances.

In general, when it comes to thinking about the big picture, we kinda suck at it as a species. We’re even worse about it when it comes to the media and how technology gets covered as mentioned. Everything has to be about who’s winning and who’s losing, and I always felt like that’s just kind of backward when it comes to writing about tech.This is not a race. It’s not a game. Shit’s ready when it’s ready. Or when someone comes along, steals someone else’s idea, and then slaps a consumer-friendly label on it like Apple and Facebook did multiple times throughout their history.

So, all because the press doesn’t think virtual reality will ever be a mainstream consumer product doesn’t mean you should be dismissive of the technology. For example, right now in 2017, there are a lot of great uses for the medium that goes beyond gaming and movies like education, physical, and mental therapy to treat things like PTSD.

VR also has applications in industries like construction. (Whether or not augmented reality is better for construction, engineering, and fields like medicine is not something I’m going to get into here in this series. I’ll revisit AR in the next one.)

This all means that whether or not we all own VR headsets someday is irrelevant to a certain degree. The idea that VR needs to be in everyone’s home to “win” (in the media’s parlance) needs to stop being the narrative we go by to figure out what the world around us is going to look like in the back end of the 21st Century.

Virtual Reality, like self-driving cars and voice-activated assistants, is already here and has immediate real-world applications that are beneficial. The odds are good in your lifetime you’ll experience VR in some important (re: non-entertainment) capacity. In my case, I know in 2023 I have to get one of my heart valves replaced. There is no doubt in my mind that the hospital will have a VR headset available for me to use to manage the pain experienced in the recovery from heart surgery. (Apparently, VR is more effective than morphine, and with the opioid epidemic raging on, this might be one of the ways to fight it.)

Virtual Reality, like a lot of technology we pretend to treat as a new thing, is not. Sort of like voice-activated assistants and smartphones, both of which originated with the original “Star Trek.” In the case of virtual reality, the technology has been around since the ‘50s. That’s right. Virtual Reality is almost as old and has had a longer career, than Elvis.

In fact, “Gunsmoke,” which used to be the longest-running television series before “The Simpsons” overtakes it this Spring, was outlasted by virtual reality too. And like “The Simpsons”, there’s certainly been wild swings in popularity with VR over the course of the medium’s history. For example, most people gave up on “The Simpsons” with season 9, came back around the time of “The Simpsons Movie,” went away again, and then came back when FXX did it’s Simpsons marathon. VR has had almost that same history. We love it. We hate it. We remember why we loved it again, and then we hate it for not being as good as we expect it to be.

So it’s worth noting for our purposes that VR has survived for as long as it has for a reason. It’s dumb, to just be like “Oh VR sucks so let’s throw all our eggs into the AR basket instead.”

That brings us to our friends in the advertising industry.

(The marketing industry usually consists of marketers talking to other marketers about marketing, so we’re going to put them aside for this series too.)

How is VR beneficial to advertisers, if at all?

Personally, I want to live in a world where advertisers pay you for your time, attention, and data, but even if (and when) we move to that model, advertising as we know it today isn’t going away. You’re always going to have mass advertising, and you know what? I think that’s healthy for society. The more things we can talk about and share with each other that hasn’t been filtered by some dumb algorithm, the better. In some respects, mass advertising is what has, and will, help hold us together as a society. (For better or worse.)

So we have to acknowledge that we’re always going to have advertising in our lives no matter how utopian we want to be about the future, and while we try to invent a future where advertisers pay us, we have to manage the present where they don’t. As excited as I am for things like the Basic Attention Token and being able to use that to pay YouTube creators, it’s still not actual money you can use to pay your rent. We’ll get there, but there’s not enough of us on board with this just yet.

That means we have to figure out how to balance the needs of advertisers with innovation and exceptional customer experiences in mediums like virtual reality. And if we don’t figure that out now, some asshole will, and you’re not going to like what they come up with.

Despite all its flaws and the simple fact that we may never overcome them, the promise of virtual reality IS exciting. It’s been exciting almost as long as my Mom has been alive, and she was born four years before VR became a thing in 1951. There’s a reason people are excited about “Ready Player One” when it comes out in theaters, even if it’s overrated as a book. (“Ready Player One” is one of those books that I liked conceptually but didn’t like the actual story, which is basically Charlie and the Chocolate Factory for Generation X.)

Did you ever wonder why every video on YouTube about VR makes the same joke about Nintendo’s Virtual Boy being a bust? Go ahead and watch any history of virtual reality video on YouTube, all of them make some joke.

It’s because we’re disappointed that VR isn’t like what we see in “Ready Player One.” VR has been around forever, longer than I’ve been alive anyway, and we’re all disappointed that it just hasn’t become this big mainstream thing as well. Think about it like this: The differences between what Back to the Future 2 said we’d have in 2015 versus what we wound up with is a bummer. That’s the kind of disappointment I’m talking about here with virtual reality as it is versus what the public expects it to be.

Regardless of where we are in the current VR hype cycle, or how the public feels about it, we are at that point where advertisers and marketers are figuring out they need to put their money elsewhere beyond digital.

They’re (finally) realizing that putting their advertising dollars into Facebook is (almost) always a waste of money, and Google might not be too much better once you factor in ad fraud, click farms, bots, and fake traffic. I think Google Advertising works, and you should do it, but it’s not perfect.

And programmatic and display advertising? Forget it. You’re just burning money on questionable ethical tactics. So that means there’s a whole lot of digital dollars up for grabs, or will be up for grabs, and people are going to look to invest it in other places like virtual reality. There’s already a couple that I know of which are advertising exchanges, but you should not put any money into something like that for the reasons I’ll get into in this series.

Programmatic advertising (and anything facilitating it) needs to die if we’re going to keep virtual reality from suffering the same fate as the Web. Once you let people in with their bullshit metrics, that’s all anyone is going to care about, which means that’s all the user is going to experience. Bullshit.

More than a few advertising agencies already telling companies that advertising in virtual reality is a great idea because doing so would be “innovative.” It is if you do it right. Although most agencies are good actors, there are more than a few who don’t want to lose the cut they make on those digital advertising dollars spent on Facebook and Google.

That means those agencies are going to have to find a new way to keep those dollars coming, and introducing companies to new technologies — in the name of being innovative — is definitely one way to do that. And since a lot of clients (if we’re honest) don’t know any better, a bunch of them are going to go, “Virtual reality? Of course, we’ll advertise there” with more than a few bad agencies taking advantage of their ignorance.

This is bad for everyone. Especially people using VR to entertain or educate themselves because dumb money and greedy agencies always lead to bad advertising and that just ruins the user experience for everyone as mentioned. A great example of this is (virtually) every mobile advertising experience that currently exists, from being forced to sit through unrelated video content, pop-up ads, banner ads, ads taking over the entire screen, and worse still, being taken to an advertiser’s page because your thumb accidentally touched the screen. Your experience using the mobile web sucks because we let bullshit metrics, and the dependence on them, become the dominant business model for media companies instead of subscriptions, merchandise, live events, and e-commerce. Heading into 2018, some outlets are finally addressing this, but not as many as we’d hope.

As far as innovation goes — or advertising to look “innovative” — I don’t have a problem with doing this in theory but as Homer Simpson once said when he was funnier, “In theory, Communism works.”

Most people in marketing and advertising will tell you that what they do is really fun guesswork and that fun guesswork is measured with suspect metrics both online and off. But after observing the virtual reality, and augmented reality, technologies for the past six months, of the two, virtual reality is probably not the one I’d put any money into.

You can put your money AROUND virtual reality, but you don’t want to be the brand that interrupts someone’s brief, 20 minutes or less, VR experience with advertising that’s going to take them out of their simulated environment and piss them off. This is according to Jeremy Bailenson at the Stanford Virtual Reality Lab and author of the forthcoming book, “Experience on Demand.” I’ve seen some disagreement with the twenty-minutes or less suggestion but based on my own experience using VR, twenty-minutes is about all I can do before the symptoms of VR Sickness set in. That’s something we’ll talk about in the next part. So for what it’s worth, if you’re developing virtual reality apps or other creative, I think the 20 minutes or less rule is worth following.

What do I mean by AROUND VR and not in it?

You can sponsor the headsets, and the other hardware people need to experience virtual reality, as just one example.

I think there’s a ton of money to be made for allowing people access to VR Caves with all the hardware you need like an omnidirectional treadmill, haptic-feedback vest, and controllers, and the head-mounted display unit at an arcade or some other place for free in exchange for the user seeing an advertisement before their experience starts. A VR CAVE, by the way, is the second (and cooler) option for people to experience VR. Instead of putting on the headset and fucking around with some controllers in your home — and trying not to trip over furniture or the cat in the process — you could go to a VR CAVE (Cave automatic virtual environment) and have all the hardware you need to enjoy using the technology fully. Plus, no cat to trip over.

Maybe it’s because I have five cats, but they’re fucking everywhere man. And you KNOW if you own even just one cat that the second you put something on your face and stop paying attention to them, they’re going to be all up in your business, which means potentially stepping on or tripping over your furry quadruped.

An advertiser can pay for your time in the CAVE or can send people VR hardware to play with, either at home or in the office and brand the equipment. This sounds expensive, but no one is asking you to send haptic controllers in the mail to strangers (although you totally could.)

We’ve already seen this using a scaled-down version of the CAVE in action with the Game of Thrones Virtual Reality experience, which featured people getting to go into a simulated elevator that takes them to the top of the wall and blowing cold air on them as they go. Unfortunately, once people reached the top of the cave, they weren’t told the release date of “The Winds of Winter” or why anyone still gives a fuck about Gendry. Go away Gendry, this show/book is ending with a matriarchy or Zombie-archy (is that even a word) if Jon Snow winds up as king. (P.S. It is hilarious to refer to Jon Snow as “Hot Zombie” when watching with your friends. Try it some time.)

Now, you might be thinking, “Ok. CAVES are expensive. VR is expensive”, but it’s not. Some snobbery aside (which I’ll explain in another section) VR is already widely available to everyone and dirt cheap if you already own a smartphone.

Google Cardboard units go for $15 on Amazon, and all you need is to download the Cardboard app on iOS or from Google Play to experience VR. That means you can easily advertise AROUND VR on the cheap. Last year, The New York Times sent out 300,000 Google Cardboard units to subscribers, as just one example, where readers could use Google Cardboard to do something fun and interactive with the paper and its app, NYTVR.

But there’s more good news for both VR fans and advertisers. The good news for advertisers is that the easiest and most likely way to reach consumers through VR is already familiar. Google reports that 50% of their DayDream users use the device to watch video.

So one of the biggest use cases for mobile VR is for people to watch 360 videos or other videos (you can watch your Netflix watchlist in VR as well as Hulu and HBO Now on a DayDream) is actually going to be plain old advertising like television. Although again, due to the 20 Minute rule, you really want your ad to be super short like what Hulu used to do with “The following presentation is brought to you by …”

Meet the new advertising, same as the old advertising, in other words.

One Exception: Unless I knew that I was spending the money for the sake of doing something fun and creative that might get me press attention. Then it’s fine to try some immersive VR advertising that’s not limited to 360 videos. Virtual Reality is still new enough that a place like Business Insider would write you up, and sometimes that’s all a client wants. Everyone is on the same page regarding their goals and expectations there, so it’s fine. Although I suspect doing something involving virtual reality, just to get yourself press coverage, isn’t going to work after 2019 since this “trick” is well known and any well-known trick in advertising stops being as effective once the word gets out.

Think: “Growth hacking” and all those spammy tactics those people tried to dress up as good marketing. Once the word got out that you can abuse a platform like Facebook, Facebook corrected the problem, and that trick became useless. So long, Upworthy, Buzzfeed, and friends!

So I don’t want you to think VR is a fad because it’s been around since the ‘50s, and that advertising in VR is incredibly difficult or expensive. It’s not.

I’m of the belief that most mainstream consumers that do experience virtual reality will do so through their mobile devices, and the biggest attraction right now for mobile VR is 360 video. Advertising in 360 videos is not that much different than what people are doing now with commercials, although I’d argue that advertising in VR is probably better than advertising on YouTube because there’s no algorithmic bullshit (yet) to deal with.

Your ad runs in front of the VR video you want it to, end of story. Or maybe better still, your ad runs in front of a video you paid for or created as part of a content initiative, but I’m getting ahead of myself … We’ll revisit this idea in the next part, coming soon.

Photo Credit: Pixabay/HammerandTusk