The VR Revolution: Advertising Opportunities in VR App Environment

The mobile and VR device market is still in expansion. When it comes to the smartphones and tablets, they have already conquered the globe with their usability. However, the VR fever is yet to truly shake the world in the coming years, as the platform becomes more budget-friendly and receives an increased number of users. However, developers and product manufacturers need to make the whole VR platform profitable, which is where the advertising world comes in. After all, as this has had a positive effect on the smartphone market, it is likely the best option for the VR platform as well. Let’s take a look at what the future holds for the whole VR revolution and what advertising opportunities the platform is bringing.

Advertising revolution

With the expansion of mobile technologies and the internet, advertising has changed a lot during the last two decades. The main benefit in the shift included targeting the right buyer persona and the measurability of ad performance. All this would work for the VR platform as well, but there are some other factors that have to be taken into consideration, and that is the satisfactory level of experience. Imagine an ad popping out right in the middle of your VR experience – chances are that you are simply going to get irritated and take of the headset. This is something that no VR developer wants to occur. This is why many different options are currently being tested and evaluated by developers and marketers. Because, fact is, VR platform needs ads in order to survive. It will simply bring more developers to the platform, as it will create an avenue of financial revenue. We will get in more details in the coming passages, but first, let’s take a look at where VR is currently at.

The VR expansion

There has been a lot of hype around the whole VR/AR platform world, however, the expansion in 2016 was quite slow. It is not that the people don’t like the experience these devices offer, it is the price that is pushing away the consumers. By a Techcrunch report, wrong market estimates were made for 2016, as people were reluctant towards adoption, as minimal price required an investment of $400, and it ranged up to over $1000 USD. However, the platform developers have recognised this issue, and companies such as Microsoft and Apple is looking to make this experience much more affordable, through cheaper consumer devices needed to use the platform. This does not mean that the VR world is not going to go big in the future, in fact, the same report shows that VR market is only to expand in the following years. In fact, by 2020, VR/AR market is going to significantly increase, which means the platform could count millions of users.

What are the advertising opportunities?

When a platform has a potential for a high number of customers, it is a great opportunity for advertisers to reach out to their audiences. This is how things went for mobile devices. After all, it is a logical conclusion, marketers want to be where the consumers are watching. Only a decade ago, this was TV, but with the development of technology, the advertising market has shifted significantly to the online world and mobile world. With millions of users going for VR experiences, there is a lot of potential for companies to reach out to consumers on the VR platform. Let’s take a look at some of the ways in which this is doable.
  • Video advertising – Video is a powerful medium for advertising. We see its increasing presence on social media networks, but mobile platforms as well. In fact, almost all free content across iOS and Android is fueled by video advertisements.
VR is no different, the platform goes well with the video advertisement compatibility, which is likely to explode with the expansion of this promising platform. Whether we are talking about regular video or 360 video, it is clear that it is going to find its presence in the VR/AR world.
  • Product placement – The VR surroundings are perfect for product placement. It all depends on what sponsors’ developers manage to find. Big companies are easily going to find their presence in the VR/AR market. Simply imagine a VR surrounding that is filled with Coca-Cola products, Pepsi or vehicles of various manufacturers. These are only some of the options available to companies who want to reach out to their customers.
  • VR surroundings – There are going to be VR surroundings that include billboards or other areas that resemble real world surroundings. These virtual billboards might feature ad placements, depending on how developers are going to implement the ads.
It is clear that there are plenty of advertising opportunities in the VR market, however, there are challenges that creators need to pay attention to as well.

What are the challenges?

Well, as people are reluctant to adopt the technology because of the price, the developers and marketers need to be careful with VR/AR advertisement implementation. Once the pricing hurdle is passed, people who join the VR/AR world should want to stay on the platform for a longer period of time.
  • Intrusiveness – The advertisements placed in the VR/AR platform need to be subliminal. That is, the experience of the customer enjoying the platform needs to remain as intact as possible. Any intrusion at the particular periods of time are going to be off-putting and a person might simply give up on VR content before they can actually enjoy the experience.
Luckily, developers have plenty of experience from the mobile market user behavior, this will enable them to appropriately place ads, without destroying the user experience on the platform. For example, an ad video can be placed before a game begins or once it is finished. In this way, the experience remains intact, while the advertisement is placed at the right place and time.
  • Pricing – The cost of creating a 360 degree video advertisement is quite high. According to a Forrester report, costs of making a single video can ramp up to $500 000, which is something that even the big players don’t want to invest in.
Therefore, it is clear that these challenges have to be approached carefully. Experts will find a way to make unintrusive ads, but the pricing issue is going to stay for the years to come, before technology matures and becomes more affordable. It is clear that there are a lot of advertising opportunities in the VR app environment. However, the whole process is going to take some time before VR/AR platforms become more mature. As the VR/AR market continues expanding, marketers will have an opportunity to come up with some incredibly creative ideas.

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CMO ProSiebenSat.1 Media SE

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