Last week at Cannes Lions, an international festival of creativity, Google released its first-ever ranking of YouTube’s 360-degree ads, which collectively have generated 20 million views on YouTube. A lot of buzz generated around the conference concerns the use and application of virtual reality and the ability to monetize the technology. This year sales of virtual reality headsets and software are expected to reach $1 billion. While there are a number of barriers to widespread adoption, advertisers are embracing the technology and its ability to connect with consumers.


The barriers facing widespread adoption are economical, physical and societal. Facebook’s Oculus Rift, arguably the leader in wearable VR devices, currently retails for $600. The costs has recently dropped, Samsungs Gear VR retails for $99, however high production costs translate to higher ticket costs. Google’s Cardboard, a low-cost cardboard alternative, has been making the technology more accessible. But the experience of surrounding users with video and sound can also leave some feeling isolated, rather than connected, leading to the physical limitations of the technology.

In an article in Bloomborg Technology Sol Ghafoor, head of digital strategy at Publicis U.K. in London claimed, “Right now virtual reality is an exclusive experience, because of the hardware, and putting it over your head limits you from being social with it,’’  and added “once physical barriers are overcome you will see it become mainstream, beyond games.’’ Access to content is another barrier that is an issue, but with developments in video recording technology seems like advertising is at the forefront for practical use of this technology.

Current Uses

Samsung partnered with Six Flags to utilize Samsung’s Gear 360 camera to record user experiences on roller coasters. YouTube star Casey Neistat, took a Samsung Gear 360 camera to the Oscars. Google’s YouTube video-sharing service has created a channel for clips filmed in 360 degrees, and brands like Gatorade, Mini USA and Nike have posted films on it. Facebook lets users view and upload 360-degree photos.

As content channels continue to grow the technology becomes more accessible and transitions from valueless spectacle to utilitarian. As consumers are continually desensitized to traditional advertising channels, immersive engagement, the kind that is provided by VR, constitutes an immediate need. Consumers want to interact, see, touch products before they purchase. VR will be vital in getting people engaged.

Impact on Advertising

VR has a competitive advantage over other media forms in that it is immersive, interactive and trackable. Immersive content allows brands to place users in scenarios, and surround them with what it may be like to use or purchase a product. A common example is a shoe company promoting a new line, creating a VR experience where the user is placed in the shoe and put into a game scenario inside Madison Square Garden.

To explain the far-reaching implications of the technology let’s use the example and take it one step further. What if brands were able to change all of the advertisements within MSG during this VR experience? This application has been developed for VR’s most commonly used application, gamming. It is entirely possible that VR game companies will be able to sell advertising space within the VR world. For example, while playing a baseball game one may be able to see ads on the outfield wall that are tailored to the user.

This leads to the second impact of VR on advertising, it is interactivity. For example, putting a user in a clothing store setting advertiser will be able to see if a user picks up an article of clothing, how long they look at it, what exactly they are looking for, etc. This type of interactivity with brands and products cannot be duplicated by any other media form. And ultimately leads to the third advantage of VR advertising, it is trackable.

Expounding on the clothing store example proposed above, there are a host of actionable insights that could be useful to brands. It could better inform how stores are laid out, where products are placed within the store, understand what aspects of products are most important to consumers. It is information that once would only be available form an in-store study or survey that now could have an unlimited number of data points and users from around the world.

While the advertising implications of VR discussed above are slightly far-reaching, right now it is on the cutting edge. 360 images as part of rich-media ad units are the first and most practical utilization of VR technology. As accessibility continues to grow so will the advertising opportunities.