As the TV sector tries to establish whether Virtual Reality (VR) is going to be the Next Big Thing or – alternatively – the next 3DTV, technology companies are already working out how it might be used by advertisers.
Viaccess-Orca demonstrated one approach at IBC – using eyeball-tracking to locate the ‘hot-spots’ in a VR environment, a technique which could be used to measure the viewer’s attention to an ad, and thereby monetise it.
Meanwhile, a new ad-tech company called Verterbrae has just emerged from stealth-mode in the US, winning $10m in Series A funding to launch what it claims to be the first native VR advertising platform.
Its founder and CEO, Vincent Cacace, is clear about where he thinks the VR ad-dollars are going to come from – mobile. “We focused on mobile for three reasons: one is that there’s a much larger user base right now. The second one is that there’s a wider demographic of users – so where in a premium VR [headset] environment, you may have cutting-edge early adopters – let’s say hard-core gamers, 18-34 males – in mobile VR, you get a much wider demographic, with female head of household decision-makers, New York Times subscriptions, or whatever the case may be. And then third, mobile VR content is more conducive to advertising because it’s more casual in nature, versus premium headsets.”
For Cacace, the premium headset VR market resembles the console-gaming sector, where “if you paid $400 for an Xbox and then $50 for each title, you don’t necessarily expect to see ads in this environment, because you’re paying transactionally for the value of the content.”
Conversely, he argues, in a mobile environment “there’s a lot of content that people want to consume but not necessarily want to pay for, and it’s generally shorter form and more casual in nature – and therefore we think it’s better for more of an ad-supported model.”
Even in a mobile VR world, Cacace believes ads should not be interruptive, or what he describes as “hard-cut” into the environment. “The one thing that we aim and strive to do is feed experiences that don’t break that presence. To start out those are pretty simple concepts like dynamic object insertion: you could think of that like product placement into an existing virtual environment, and maybe there’s a pop-out experience from there.”
He illustrates this with the example of a virtual conference room where one person has a Coke ‘placed’ in the VR environment in front of him, which when picked up transports the user to a branded environment such as a 360-degree ‘world of Coke’ video.
However, he stresses that for him, the term ‘native’ means that ultimately “it’s up to the publisher. Sometimes, if you put ads in my content, the narrative of my content is not conducive to product placement or native advertising and so I’d rather just have a pre-roll or an interstitial ad that plays alongside or before the content.”
In fact, this is exactly what happened when Lionsgate recently sought to promote its new Blair Witch movie within the Sisters app, a VR ghost story developed by Otherworld Interactive. “Sisters [said] we don’t want to do native advertising, it would mess up the narrative of our content,” explains Cacace. So, in collaboration with Vertebrae, Lionsgate created what is claimed to be the world’s first VR movie trailer, which played as a ‘mandatory’ pre-roll on the Sisters app.
Whatever type of VR ad format is being used, the audience needs to be measured. Cacace believes that the time for eyeball-tracking will come, but declares that “what’s primarily relevant right now – and I think will be for the next year and a half – is ‘gaze-tracking.’” This is arguably a cruder measure, which depends on the orientation and position of the headset, but has the advantage of universality.
“If you’re talking about mainstream advertising, then the mainstream would need to adopt the headsets that utilise eye-tracking, and I totally see that as being the standard and the norm – but not for two or three years,” asserts Cacace.
Meanwhile, he points out, gaze-tracking offers plenty of sophistication. “You can assign a metadata tag to advertising objects that exist within [VR] environments. So if I’m looking at that Coke can and I’m 15 virtual feet away from it, I can – with the analytics – easily tell how far I am from it, how long I’m registered looking at it, if I engage with it, if something obstructs the view then how much it obstructs the view from that object (which gets more into viewability issues) – so all those things kind of start to emerge.”
Asked if the advertising industry has accepted this type of metric for VR, Cacace concedes, “that’s what we’re trying to create, but it doesn’t exist right now. A lot of what’s happening in VR outside of our company is – I would say – like a regurgitation, almost, of prior ad units and formats that are ported into VR, that utilise the same sort of impression-tracking, more simple measurements.”
While Vertebrae is having conversations with the IAB about testing formats such as 360-degree video, virtual branded rooms, and 3D object insertion, “all the tracking and measurement behind that stuff is yet to be standardised. We have our own solutions for that, but it’s still early in the standardisation process.”
A more pressing issue, perhaps, is when the mobile VR sector will reach a big enough critical mass to offer the type of targetable market segments advertisers will be interested in. Cacace admits that this is the “10-millon-dollar question. From our perspective, we think it will take roughly 20m regular users of VR for it to be very effective for an ad-only supported monetisation system. We’re still a way from that.”
While Cacace concedes Vertebrae is “at the bullish end of the spectrum,” he thinks that in “anywhere from 8 to 16 months, we can be there.”
In the interim, he argues, native VR advertising is “something that’s relevant now, and increasing in relevance every day.”