Advertising in virtual reality is so new that its most basic issues, such as effective mass-market advertising and the scale required for distribution, have yet to be addressed. The elements of that distribution scale include a large, aggregated audience with a consistent format for ads and standard success metrics that are both agreed upon and easily communicated. So let’s explore how some digital lessons from the past 20 years could apply to the forms of VR advertising in the future.
A negative assessment of advertising in virtual reality would point out that more data does not yet improve the value of online advertising for traditional publishers. One could argue that virtual reality is going to create so much data (every movement can be measured and analyzed) that publishers will never be able to settle on a consistent success metric, ultimately driving prices down and replacing online dollars with virtual reality dimes.
A more optimistic assessment illustrates that we’ve learned something. With perspective, key learning and new tools the advertising market is ready to effectively produce, sell and measure virtual reality advertising.
What we’ve learned
More data does not necessarily mean more value. When online advertising was emerging there was a general assumption that all this data (i.e., clicks, views, etc) would eventually translate into more value for the publisher. That failed to materialize because views meant nothing when the incremental cost of a view was zero. Virtual reality is going to produce exponentially more data, which will allow us to know every body and eye movement.
What new tools we have
Digital marketing has dramatically improved in its ability to measure value. New analytics tools have allowed us to build attribution models that can assign value to a diverse array of activities. We instinctively understand that a combination of customer activities deserve credit for a sale. A Facebook “Like”, a positive review, a relevant newsletter and a well placed ad may combine to drive purchase. Now analysis tools like Tableau and automated marketing tools like Marketo allow marketers to plan, execute and measure multi-channel campaigns.
What needs to happen?
I have discussed the need for metaverse adoption, product improvements and consumer adoption in past posts. Assuming these take place, the market will require a way to measure virtual reality that will capture consumer activity across channels and demonstrate the value of multi-channel advertising. Telling a holistic story instead of simply trying to sell one medium will allow advertisers and publishers to adopt new media as they grow. Luckily, the big data tools that allow us to analyze and measure multi-channel campaigns can be applied.
The market will soon be in need of standards that publishers can easily communicate to marketers and advertisers. Development organizations must learn from the shortcomings of earlier standards used to value online advertising.