Checking In On Virtual Reality: Is It Really Happening?

As we all know, VR attracted tons of media attention in the first half of 2016–and rightly so. But the numbers tell a different story.

As we all know, virtual reality (VR) attracted tons of media attention in the first half of 2016–and rightly so. The introduction of affordable headsets, including the Samsung Gear VR ($99), and 360 cameras, such as the Ricoh Theta S ($350), have put the technology in reach of millions of people for the first time.

But the numbers tell a different story:

• Oculus announced that there were 1 million Samsung Gear VR active “users” in May. But this doesn’t address how many headsets had actually been sold after six months.
• Number of games/apps available in the Oculus Store–250. Compare this to the iOS App Store, which reached 10,000 apps after less than six months.

Why such disparity between expectations and reality?

Two reasons: First, professional-level virtual content is still very expensive to create. Professional-level camera rigs run into the tens of thousands (e.g., Nokia’s Ozo costs $60,000, while Lytro’s Immerge is estimated to cost $250,000). Even Oculus’s open-source camera rig (announced at Facebook’s F8 conference this past spring) costs $30,000 to build.

Nokia’s Ozo, Lytro’s Immerge, and Facebook’s Open Source 360 cameras.

A lack of a sizable audience and an efficient marketplace for discovering content are also creating headwinds.

Instead, 360 photos and video are proliferating to fill the content gap. While it’s hard to find concrete numbers, Facebook and YouTube now have thousands of 360 images and videos to browse. This content can be created with existing cameras–Facebook enables users to convert panorama shots to 360 photos directly from its software–or affordable 360 devices, such as the aforementioned Ricoh Theta.

360 videos are easy to create and host via Facebook and YouTube.

Still, this fall could mark an interesting milestone for VR adoption. It’s safe to expect holiday campaigns from Samsung, Oculus, HTC, and Google (for Google Cardboard). At the same time, Sony will be releasing its PlayStation VR headset for gaming. It’s also safe to expect a wave of new content–some of it professional level–during the holiday season.

With thousands (maybe millions) of VR headsets potentially under Christmas trees, one might be ready to declare success. But as we’ve seen with other hyped technologies–think hoverboards from 2015–ongoing engagement is key. If most headsets are sitting on shelves collecting dust in February, we’ll know that virtual reality is still not ready.

What Does It All Mean For Marketing?

Don’t get me wrong: I still believe that virtual (and augmented) experiences have the potential to fundamentally change how we consume and engage with content, media properties, and brands. The empathy and presence that virtual experiences deliver is far beyond anything that 3D TV or 4K TV could achieve. In addition, applications of virtual reality in health care, commerce, real estate, education, and other industries remain very promising.

If you believe a virtual experience will enhance and grow your brand, then by all means you should try it out. The immersiveness, emotional connection, and novelty you generate will very likely generate new affinity–if not measurable lift–for your brand.

Just keep in mind that the audience is limited, so consider it an experiment for now. You’ll be in good company, too. Many top brands are dipping their toes into the virtual waters this year. Here are few examples that show how this technology can be applied in marketing:

• McDonald’s Happy Meal promotion in Sweden turned Happy Meal boxes into Google Cardboard VR headsets.
• Mitsubishi created a virtual test driving experience for its 2017 Mirage G4.
• Gannett recently introduced the “cubemerical,” a VR ad unit for its USA Today property, giving brands a six-sided virtual room to showcase themselves.

This is just the beginning. Whether you choose to experiment in 2016 or continue to observe a bit longer, the billions of dollars being invested in VR technology bodes well for its future. I expect to see some really incredible experiences as VR matures, prices fall, and more professionals jump into the medium. And it’s still early enough that both early adopters and laggards can benefit.