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Virtual Reality to Become a True Reality
IAB report predicts increased use of 360-degree video amid virtual reality's growth as a marketing channel
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Virtual reality will emerge as the next big thing in digital advertising, the Interactive Advertising Bureau (IAB) concluded in a recent report, citing opportunities for immersive storytelling, shopping, and product demos and the power to stir emotions in a new way as some of virtual reality’s major strengths.

Though its use is limited today, Anna Bager, senior vice president and general manager of mobile and video at IAB, expects virtual reality to grow “exponentially” in the next few years as an advertising medium.

“It’s still in its very early days, but there is a lot of testing and experimentation going on with it right now,” she says. “We’re not there yet, but we will get there soon. Virtual reality is definitely here to stay.”

In the next two years, IAB expects more companies to start to leverage 360-degree video, 3-D digital billboards, and even TV commercials with virtual reality. Other uses could include interactive games, product demonstrations, and virtual tours. This next phase of experimentation in the medium will be critical in determining its success, the report found.

“The sky’s the limit. There’s a lot you can do with [virtual reality],” Bager says.

With VR being such a new platform, advertising capabilities are just now beginning to emerge. “We have only scratched the surface of what virtual reality, augmented reality, and 360-degree video can offer as advertising channels,” Bager said in the report.

The technology, she adds, has great potential among media content publishers, but other industries that stand to benefit immensely from virtual reality include automotive, travel and hospitality, and real estate.

Though more of an experiment with augmented reality rather than true virtual reality, the recent Pokémon GO game is a clear demonstration of the technology’s potential and consumer appeal. The game encourages players to search for and catch more than 100 Pokémon characters as they explore their surroundings. As they move around, their smartphones vibrate to let them know they are near a location where a Pokémon has been spotted. Once they encounter a Pokémon, they can take aim on their smartphones and throw Poké Balls to catch it. Special PokéStops, located at popular places, like museums, historical markers, and monuments, have also been established where gamers can collect Poké Balls and other items to help in their quests.

“The Pokémon Go phenomenon has raised the profile of AR and VR, bringing the power of the medium into the mainstream, just as major brands and publishers have begun to tap into its breathtakingly immersive capabilities,” Bager says.

Analysts say VR is especially popular within the tech industry, but high-end car manufacturers like Audi, Jaguar, and Volvo, beverage companies like Coca-Cola and Anheuser Busch, clothing companies like Nike, and even cheese maker Boursin have featured virtual reality in recent ad campaigns.

The IAB does note, however, that content creators need to understand that the VR production process is far from straightforward. With VR, consumers can interact with content and change their field of view and perspective, opportunities traditional media doesn’t present.

Another challenge is the limited availability of the virtual reality headsets needed to access the content, the report notes. Though the hardware is becoming cheaper, sleeker, more advanced, and more readily available, the current rate of adoption will likely lead to monetization challenges, the IAB suggests.

Car dealerships, real estate agencies, and travel companies, for example, can offer the headsets as a service at their locations, but other applications might require consumers to buy headsets and download apps, none of which can be guaranteed.

IAB also warns that the extraordinary level of hype surrounding virtual reality leads people to expect to be wowed by their first virtual experience, even though it is still a nascent medium.

IAB is committed to helping make virtual reality a robust marketing platform and has pledged to help develop standard terminology, definitions, and emerging ad formats, according to Bager.

 

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