Published November 2016

If you were to walk into the Quango office and ask about virtual reality (VR), you’d probably hear—maybe just a bit too much—about who made it to the highest level on Longbow (one of Valve’s VR demos). Accounts and Creative are tied as of now, but give it time.

Despite this intense competition, virtual reality is a growing presence that extends far beyond gaming. It has permeated the way we interact and the way we take in information, and it’s on the way to becoming a multibillion-dollar industry.1 So is it any surprise that marketers industry-wide are embracing VR as the next big thing?

Create an Entertaining Experience

Virtual reality has unleashed an abundance of imaginative content. Companies are advertising with 360-degree videos, VR games and apps, and even VR hardware. The following are just a few examples of what’s out there:

  • Last winter, Coca-Cola released a VR sleigh ride in Poland using Oculus Rift headsets. Thousands of people waited in line to fly across the globe in Santa’s virtual sleigh.
  • For the Swedish recreational holiday Sportlov, McDonald’s developed a VR game centered around skiing.
  • Hormel Foods recently released a “multisensory bacon experience” with Google Cardboard, so you can see, hear, and even smell the bacon.

Show Off the Product

Whether it’s a service, product, or experience, companies are getting inventive with how they display their goods. Car companies, including Volvo and Lexus, have developed immersive 360-degree test-drive experiences for their latest cars. Marriott hotels offer newlyweds a honeymoon experience with VR “Teleporters.” And companies like Tesco and ASOS are developing virtual-reality stores that enable customers to shop from the comfort of their homes (or wherever they feel like bringing their headsets).

Harness the Hardware

Marketing doesn’t have to feel virtual. Businesses are taking advantage of the affordability and flexibility of cardboard VR hardware. Last year, The New York Times sent out one million free Google Cardboard headsets so readers could follow its VR-based story series. This year, the paper sent out another 300,000 to its “most loyal” customers.

Beyond Google Cardboard, other companies are coming up with their own unique cardboard headsets. For the McDonald’s VR skiing game, customers made their headsets, or “Happy Goggles,” out of Happy Meal boxes. And that bacon smell Hormel incorporated with their headset? They customized Google Cardboard to be “bacon-scented” so their customers weren’t deprived of the full “multisensory bacon experience.”

VR and B2B

Consumers aren’t the only ones benefitting from this emerging technology—VR also has a number of uses for B2B communications. For high-value purchases and big-ticket items, “try before you buy” is critical—and often expensive. VR can lower the trial-run costs by virtualizing product and equipment demos. B2B companies can also hold virtual-reality trainings, tutorials, and meetings for customers and employees. Plus, 360-degree VR can potentially be used for conferences and trade shows, which can help save on costs like travel and lodging.

Businesses are also using VR in market research to test new products and measure customer reactions. VR can provide indicators like heat maps that tell businesses where customers are looking and where to place products within the store for ideal ROI.

The Cost Reality

While the potential for VR is great, cost can be a hindrance for many businesses. Because VR is still in the early stages of adoption, companies have a limited reach when marketing directly to consumers. A recent forecast report showed that only six percent of Americans would likely own VR headsets in 2016, and of those headset owners, only a small number would opt for more expensive, high-end equipment like the Oculus Rift.3 And because mainstream virtual reality is still in the early stages, there are many unknown costs associated with marketing with VR.

Change in Forecast

Originally predicted to be worth $30 billion by 2020, a joint report from Greenlight Insights and Road to VR showed that VR is making a slower climb.1 The report suggests that the VR market will be “very modest” over the same five-year period. With high initial costs and slower widespread adoption, companies might be hesitant to market via VR. Still, they should be looking at the long term.

A Bright Future

In fact, by 2026, VR is predicted to be a $38 billion industry.1 And as more affordable VR headsets emerge, consumers will have more opportunities to adopt virtual reality. As seen from The New York Times promotion, Google Cardboard is an economical entryway to VR-based marketing. And more companies are looking to jump on the virtual reality bandwagon. IDC predicts that 30 percent of consumer-facing Global 2000 companies will work with AR and VR in 2017.3

The technologies behind VR continue to grow as well. Eyefluence, an eye-tracking startup recently purchased by Google, makes it possible for VR users to navigate and select objects with eye movements, eliminating the need for a mouse. Technologies like eye tracking can mean a great deal for future advertising and market research.

Experiment Early

Ultimately, VR is here to stay. Clifton Dawson, CEO of Greenlight Insights—one of the companies that co-released the latest VR forecast—said that early VR experimentation poses significant business benefits (he should know, since he did it at Snapchat, a company that’s now worth $25 billion).2

While not every company can be a Snapchat, businesses should consider the exciting potential of investing early in VR technology. Just this year, Quango attended a number of events where virtual reality was featured as a highlight. At PAX West, we saw a number of booths set up with VR demonstrations. But that wasn’t all. There was also an entire area designated for virtual reality (called the VR Village, or VR Freeplay area). In fact, we’ve seen so many opportunities with VR this past year that we were convinced we needed to equip the Quango office with its own VR setup.

The trend toward VR might be slow and steady, but there’s no denying that it’s on the rise. Within a decade, the industry is projected to be worth $38 billion.1 The only question is: When will your company embrace that reality?

Interested in reaping the benefits of a VR-based marketing campaign? We'd love to help.

  1. “VR Will Be a $38 Billion Industry by 2026: Report.” Fast Company, November 2016.
  2. “What Marketers Need to Know about Virtual Reality—And Why It May Be Worth a Try.” Marketing Dive, October 2016.
  3. “Worldwide Revenues for Augmented and Virtual Reality Forecast to Reach $162 Billion in 2020, According to IDC.” IDC, August 2016