How to Convince Advertisers That VR is Worth the Investment?

It’s been more than two years since the rebirth of VR, and brands and agencies are more involved and not so easy to wow anymore. Now CMOs and CTOs need to report to their management and sell them on why a VR investment is sound and worthwhile.  

How do we measure the success? And what kind of ROI should we expect for a good VR experience? Here’s some ammo for when you need to answer those hard questions.   

How Does One Effectively Measure Virtual Reality’s Marketing Efficacy?

To be sure, VR marketing doesn’t have the same mileage as “flat” internet banner or pop up adverts, and so assessing what VR strategies works best is a growing, ever-changing field. But just as the number of existing analytical services for traditional click-through adverts, the number of VR advertising key performance indicators and tools has risen in recent years. Said qualifiers for success can be summarized as follows:

●     Quantifying VR ad-user interaction time

●     Quantifying successful VR ad call-to-action rate

●     Assessing user interaction & analytics

Though each VR advertisement is unique, on average VR ads receive farm more consumer interaction than more traditional forms of digital marketing. Webpage FX reports that while the average click-through-rate of a traditional ad viewed on mobile device and desktop is 1.0% and 0.4%, respectively, the gaze-through-rate of a VR ad approaches nearly thirty percent! In addition to that, while install rates of the former two examples are 0.5% and 0.2%, respectively, the install rate for VR ads is an impressive 12.5%! This is great news for firms attempting to promote a particular brand as a growing body of data indicates that when consumers are exposed to virtual and augmented reality advertising they are likely to spend 60% more on the marketed products and five times more likely to develop brand loyalty.

Moving on to tools which track both user interaction and measure analytical data, a pair of Icelandic developers created Ghostline, a program that measures a VR user’s interaction with VR products in real-time and even gets a read on consumer emotion. This program also has the capacity to present marketers with statistics such as user height, room size, and data otherwise impossible to collect. This is a particular good service if you are looking at any form of advertising in which involves of overlaps with the video games space given Ghostline’s development backstory.

CognitiveVR performs similar functions – it aggregates data such as user interaction patterns, user travel patterns, and gaze time while the user experiences either virtual or augmented reality.

In addition to measuring engagement, indicators of subject’s boredom, and VR device type, Retinadvr employs heat maps to track users eye movements while in a virtual environment. This allows a marketing agency to determine which specific object placement or action is effective and allows for more efficient refinement of a given advertisement. InstaVR provides a similar series of services while also condensing VR environment construction to a web-based process so easy to use a simple ad can be constructed in a few minutes.
Newer entrants which may be useful in the VR marketing analytic space include Virtualitics, a data-first VR service to provide a more advanced and thorough analysis and examination of VR data.
This service uses a sophisticated “smart” mapping system based on a unique machine learning and natural language which neatly condenses and presents vital statistical data. Further, Virtualitics is can be used for collaborations on a wide variety of devices including virtual reality, augmented reality, mobile, and desktop devices.

What Can One Reasonably Expect With Respect to ROI?

As previously implied with any emerging technology a hard estimate for return on investment is difficult particularly since it is largely dependent on how effectively the technology is used.  
Additionally, the type of industry is another variable one must consider when attempting to predict specific returns. As a result, some of the more cynical -- and in our view behind the curve -- members of the VR tech sector have even invented a “pseudoscientific” formula to measure VR marketing returns.

I / E + T + EX = ROI

...or in other words...
Investment / (100% Engagement + 100% Total Immersion Time + Compelling Experience)

= ROI (Brand Affinity + Emotion + Probability to Return)

However, there are in fact a few case studies available; for instance, the branding agency Imagination and VR production firm Rewind developed a social VR experience for the promotion of Jaguar's revolutionary electric I-Pace sports car. In both London and Los Angeles during the 2016 LA Auto Show, dozens of users were connected to a multi-user event which included three live-streams. Throughout the day of the presentation, 300 guests on two continents were able to inspect the vehicle's exterior. Following that they were treated to sit in the driver's seat during a simulated drive through Venice Beach while going over the car's features, and “meet” a couple of the car's creators Ian Hoban and Ian Callum.

In addition to receiving several awards for presentation – the VR experience has generated so much demand for the I-Pace that Jaguar may not be able to keep pace with production. To provide specifics, even though the vehicle isn't slated to be released until early 2018 and a final price has not yet been set, the car has generated 25,000 confirmed orders.

VR marketing has even yielded measurable returns for the public sector as well. The United Nation’s film, ‘Clouds of Sitra’ is a VR movie which tracks the events in the life of a Jordanian girl in a refugee camp. After debuting in Kuwait City in 2015, the film brought in $1 billion dollars more in donations then had been expected. Following that, UNICEF used the same VR experience and witnessed an almost 18% increase in donations.

To refer to a somewhat unusual example, a team of volunteers formed an educational startup based out of Ireland to produce a complete, virtual experience structured around the Apollo 11 landing. Using archival footage and photographs the team has put together a prototype for the app demo and promoted the experience using Facebook’s Oculus Rift VR headset at educational events in Ireland. While the original goal for Kickstarter donations was €30,000 the project has received donations in excess of €36,000.

Although specific returns have not yet been reported in some cases, the sheer number of experiments in VR advertising should engender a certain degree of confidence in the technologies application as an effective means of marketing.

In summary, VR marketing has already been demonstrated to be an incredibly efficacious form of advertising and clearly possesses additional, untapped future advertising uses.