4 Ways Virtual Reality is Changing Advertising
While virtual reality (VR) is usually known for its applications in gaming and entertainment, it's now being used across many other sectors from education to healthcare. It is even being adopted by businesses, which is helping VR disrupt entire industries.
The global virtual reality market, which was valued at $15.8 billion (€13.5 billion) last year, is predicted to be grow by 18% every year up to 2028. One reason is that VR headsets are being made cheaper every year, so they are now accessible to consumers. Moreover, modern headsets are now equipped with high speed PCBs that are capable of transferring visual signals almost instantly. This has reduced latency in VR headsets, preventing the headaches commonly associated with prolonged VR use. As a result, consumers are now more interested in VR than ever before, and innovative businesses need to be aware of how they can utilize VR to gain a competitive edge.
Among the many disciplines in the business world, however, it's advertising that has profited — and will continue to profit — the most out of the technology. So, here are a few examples of how it is changing advertising:
Virtual stores
It's no secret that the pandemic has had a massive impact on online shopping. Research even shows that ecommerce sales grew nearly 20% last year, compared to 2019.
To take advantage of this, a number of brands, including Dior, Tommy Hilfiger, and Farfetch, are opening virtual stores. These are VR simulations that let users "look" around and buy their products, complete with interactive elements (like "trying" them on in front of a mirror). For example, Dior has a virtual version of their Champs-Élysées store. On the platform, you can browse the shelves and try on some of their products. With social distancing being so prevalent over the last year, virtual stores aim to let customers feel like they’re shopping in traditional stores again by using a much more customized approach.
Higher conversion rates
Videos perform better than image ads, and as such, due to their highly dynamic nature, it makes sense that VR ads have the same level of engagement, too. Interactive VR ads let customers interact with products, which can lead to higher conversion rates. GCH, a hotel management company, is already utilizing VR to allow guests to have a virtual look around their rooms before booking. As a direct result, they have been getting a lot of bookings, even in the middle of a global pandemic.
Evoking emotions
Ads that evoke feelings are generally more memorable, and improve brand recall. But the indirect effect is more cognitive — consumers will contemplate whether they liked the ad, if the ad was well-made, and if it provided useful information. These factors will ultimately affect how consumers perceive your brand.
One of the most interesting VR ads was for the horror movie called Jigsaw (2017). The ad was created by Lionsgate and Unity, and it featured a virtual room where users are tasked to solve a puzzle to escape. The ad resulted in 275,000 unique users taking part in the game. Jigsaw went on to make more than $104 million (€88.6 million) at the global box office.
Ads in VR apps
It’s always a challenge to find new content formats that will engage the market. However, VR has provided us with a new avenue to explore. Considering how there are more than 171 million VR users in the world, hosting ads on the platform can help businesses tap into a very large market. Already, Facebook has been testing VR ads in a few Oculus Quest apps.
VR has become a great way for advertisers to interact with customers by facilitating immersive experiences connected to their products or services. And while it's still relatively new, companies are already using it in ingenious ways to gain a competitive edge over their competitors.
