Should You Catch the Virtual Reality Wave?

The answer depends on your audience and your objectives, experts say.
Digital Engagement

It's not yet the age of virtual reality, but more and more marketers are dipping their toes into the technology. As technology advances, sending down the price of virtual reality headsets while improving the experience, VR is positioned to become a compelling marketing tool. And while the market for VR technology is still nascent, early adopters and industry experts are already uncovering insights.

By 2020, 52.3 million VR headsets will be in demand, up from 3.3 million in the U.S., estimates Forrester Research. Many marketers question though, whether virtual reality is more than a gimmick and if it makes sense for their brand. "Two things determine how and when you should pursue VR: how ready your customers are to experience your product or service virtually and whether VR will have a comprehensive or modest effect on the experience of your brand," writes Forrester analyst J.P. Gownder in a report, "The Coming Wave of Virtual Reality."

Given the amount of time they spend on digital platforms, high school and college students are more than ready for virtual reality. With this in mind, the University of Hartford's Barney School of Business launched a virtual reality campaign in an effort to increase deposits from high school seniors who had been accepted into the fall 2016 freshman class.

"We saw the VR campaign as a way to send a differentiated mail package, message, and content delivery mode to households that are barraged with college marketing in the run up to 'national deposit day,' says Marty Roth, dean and professor of management and marketing at the Barney School. The Barney School selected digital agency Primacy to develop the VR campaign, which lets prospective students explore a classroom, the on-campus Starbucks, and athletic facilities via a Google Cardboard VR headset and a website with video and audio.

To develop the experience, Primacy filmed the University of Hartford's campus and created a Web app that delivers a 360-degree view of student life. The app can be viewed on either a desktop computer or mobile device, and a voice-over on each scene describes what is happening on that area of campus. In March, the Barney School mailed the headsets to 1,300 accepted students in their admissions package. Students had until May 2 to decide if they would enroll. The Barney School also developed a social media campaign where students were encouraged to share their experiences using the VR headset and portal.

Feedback was "extremely positive," Roth maintains. "Students loved the experience, and shared with us that they received nothing similar from another college or university," he says. Compared to the same time period the previous year, the Barney School saw an uplift in deposits which it attributes to the VR campaign and other marketing campaigns (the school did not share the number of deposits). The ROI measures include a 56 percent open rate on follow-up emails about the VR campaign, a Facebook post promoting the VR campaign had a reach of 32,146 people and 223 clicks.

The Barney School's marketing team plans to launch another VR campaign in 2017. Next year, the mailings will be sent a few weeks after each student is notified of their acceptance (it does rolling admission from mid-fall through April). Sending the acceptance package first, followed by the financial awards package, and the VR campaign in 7 to 14 day intervals will "keep admitted students highly engaged with us and lead to greater deposits and subsequent enrollments," Roth predicts. Roth also plans to have a branded Samsung VR headset on-hand at college fairs and other tabling events for high school students and encourage students to take photos of each other using the headset and post them.

For other marketers who are considering VR technology as an engagement tool, Roth's advice is to "be open to new ideas and work with an experienced partner who can advise and guide the effort. Leverage VR technology's novelty, but make sure it is part of an integrated campaign to help meet your objectives." For most gamers and tech savvy consumers, VR's immersive capabilities is an easy sell. In fact, 61 percent of potential buyers plan to use VR hardware for gaming purposes, reports Softonic, an app discovery firm which surveyed 2,000 consumers.

But virtual reality has yet to appeal to mainstream audiences, notes Softonic CEO Scott Arpajian. "One of the main challenges the VR industry faces is about price," he says. "Consumers want to spend less than $100 [on VR devices] but most manufacturers are asking for more." And even after VR devices become more affordable, marketers should be wary of shoehorning their brand into the experience. "The brand experience has to be authentic," Arpajian says. "It goes without saying that consumers are critical of advertising and will be turned off if the experience doesn't offer value to them."

For instance, VR can be a powerful storytelling device. The New York Times is one example of a publication that is actively building an audience for virtual reality content. In November 2015, the company distributed 1.3 million Google Cardboard viewers to subscribers. Soon after, it released The Displaced, a documentary about the daily lives of three child refugees that viewers can watch as a flat screen movie on YouTube or by downloading the NYT VR app. Within the first few days, about 92 percent of views came from Google Cardboard and the Times' VR app, the company reported.

In April, the Times noted that the NYT VR app has had more than 600,000 downloads since it debuted in November 2015. Additionally, the company has hired a VR editor and created several VR videos for brands like Tag Heuer. The Times is also planning to attach a sponsor to VR projects, and will create complementary branded content that can be distributed across platforms like Facebook and YouTube, reports Adweek.

On the backend, more companies are needed that can help create and distribute excellent VR content, observes Ashu Garg, general partner at Foundation Capital. The venture capital firm is primarily interested in two types of VR companies, Garg says. The first are companies focused on tools for content creation, capture, and editing. "Content is exceedingly difficult in VR and the costs and skill sets are prohibitive for everyday consumers," he notes. "Not only do we want to get creator tools in the hands of more people, but having more content for VR users overall will be a major driver to mass adoption."

The second area of investment is software platforms for monetizing and distributing VR content. Foundation Capital has already invested in startups like Immersv, a company focused on monetization and ad networks in VR, and AltspaceVR, which is building event engagement layers into VR. Marketers will have more options for creating and distributing content as more startups enter the VR space. Therefore, the best way to get results is to "experiment, assess, and repeat," Garg adds. And while brands can learn a lot from the early adopters, they shouldn't wait to explore the medium themselves. "Taking a 'wait and see approach' to growing your virtual reality knowledge base is a recipe for getting outmoded quickly," he says.