How Vertebrae is bringing native advertising to virtual reality platforms

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With virtual reality (VR) platforms and content continuing to gain traction, VR publishers have been seeking new ways to monetize and advertisers have been seeking new ways to reach consumers. Earlier today, the Santa Monica-based Vertebrae, which has until now been operating in stealth as it developed its native VR advertising platform, announced that it has raised a $10 million series A to build upon these efforts.

While in stealth, Vertebrae worked with Lionsgate on a custom VR ad for the upcoming Blair Witch film. The partnership shows not only the great interest in VR from production companies and marketers but also the need for both VR inventory and ways to buy it.

VR advertising is in its infancy, and Vertebrae is working with the Interactive Advertising Bureau (IAB) as a founding member of the team establishing the first VR/AR advertising standards. More, they are working with DMPs and DSPs to ensure that targeting and transacting runs as smoothly as more traditional forms of media buying.

For more on VR advertising, its challenges, and the unique data insights it allows, we spoke with Vertebrae CEO and founder Vincent Cacace:

Found Remote: VR is a new format and this presents plenty of opportunities for advertisers to innovate. What are some of the interactive and unique elements that brands and agencies can use from the onset?

Vincent Cacace: We find that a gaze-based interactive, on-rails experience, is effective because provides an interactive environment while not having to teach a user controls or navigation in an ad. Dynamic product placement into virtual environments allows advertisers to natively insert themselves into environments that best fit the lifestyle or context of their brand or product. 360 video is another format that can exist as stand-alone, or be triggered by a placed product to a pop-out destination VR ad experience. These are formats advertisers can take advantage of today, and we plan to add more as we continue to build the platform and scale our distribution network.

We also enable 360 video ad serving in mobile, and we’re seeing increased interest in VR publishers acting as advertisers in traditional mobile to promote downloads of their VR destinations and eyeballs on their 360 content.

FR: What new types of analytics will you be able to provide VR advertisers?

Cacace: Vertebrae’s analytics solution allows us to measure the entire VR content experience. Starting out, we provide the length of time a user sees an ad, how far they are from it, if something obstructed the view, if they engage with the ad, and furthermore if they gaze-through to a destination VR ad experience. We also have heatmaps of a user journey through a virtual environment. Down the road, we foresee being able to distill sentiment and engagement towards a product or experience. Right now, we are starting simply as we want to ensure that when a brand is paying for an impression, that it really counts in a verified and measurable way.

FR: How will Lionsgate leverage your capabilities for Blair Witch? How will they measure this compared to traditional channels?

Cacace: We’re proud to partner with Lionsgate, a leading innovator in film and VR. Lionsgate leveraged Vertebrae’s VR publisher network and platform which also provides the analytics and reporting technology. We partnered with experts in VR horror, Otherworld Interactive, as they have already amassed a VR horror following with their Sisters app- and are a great production partner. This particular execution is measured similarly to traditional channels in terms of impressions.

FR: What are some of the challenges you're facing as you approach advertisers? What are some of their hesitancies?

Cacace: The most challenging part is definitely reach, we all know the VR market is small but growing fast. We look to maximize and expand the reach of content as far as possible across the VR ecosystem, and even [with 360 video] into mobile/web. Another hesitation is lack of interactive/VR production experience. We have found VR advertising to be a great testing ground to explore different concepts and production ideas, as these are shorter experiences and do not require the time and investment of a full VR experience.

FR: Consumers cannot "walk away from the TV" or opt out -- how do brands, then, take advantage of this opportunity without alienating viewers?

Cacace: The VR industry has a responsibility to respect the consumer, because we hold their undivided attention. Ads should be contextual to the content and the audience, and be compelling and engaging. The prize for winning is high brand affinity and engagement, we see VR as a medium where the advertising can be as compelling as the content. We empower our publisher partners, who know their users best, to set the policies for ad viewership.

Adam Flomenbaum

Adam Flomenbaum is a global leading expert on social television, over the top platforms, TV Everywhere, and content marketing. Flomenbaum has written for Dime Magazine and Brooklyn’s Finest (ESPN TrueHoop). In January 2014, he began contributing to LostRemote, a leading social TV blog, and was named editor in October 2014.

All by Adam