Reaction to Oculus Rift acquisition: Havas Media, TH_NK, Mindshare, We Are Social, Somethin' Else and more

By Ishbel Macleod | PR and social media consultant

Somethin' Else


Facebook article

March 26, 2014 | 13 min read

Facebook has added to the over 40 acquisitions it has racked up by buying virtual reality platform Oculus Rift for $2bn - double what was paid for Instagram. The Drum spoke to industry experts to find their views on the deal, and what they think it could mean.

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Amy Kean, head of futures, Havas Media

Right now the only thing this means is that we will start seeing lots of blog posts about virtual reality as the 'next big thing'. This purchase is interesting but not too exciting yet - all the big players in the industry are buying VR, AR, AI companies that will eventually bring technology as close to a replication of real life as possible. But the important thing to remember is that for the most part, technology evolves faster than consumers do, and in the near future it's likely we'll see only baby steps in the promise of a totally revolutionised gaming and even educational experience becoming mainstream enough to mention. Oculus has said that in the next ten years virtual reality will become "ubiquitous, affordable, and transformative," so brands should probably focus on the immediate need to create a perfect digital experience before they concern themselves with other, more virtual worlds.

Paul Bennun, chief creative officer, Somethin’ Else

Facebook’s acquisition of Oculus says a lot of very interesting things.It says Facebook’s PE ratio and market capitalisation means it can continue to buy whatever it wants, divorced from the sort of consideration that applies to any other company in the world — let’s just have a consensual hallucination about what “a dollar” is and make some strategic bets about the future. Look at the shiny!It says the view virtual reality is, somehow, “the future” is becoming widespread. Not just within the videogame community — the largest entertainment sector in the world — but at the level of utility and telecommunications.It says Facebook is explicitly saying its database of people’s social graphs plus hardware they own, is the new telecommunications network. Not just for social connections, but for entire classes of contact; entertainment services like sport or performance, healthcare and so on. You’re actually AT the match. Facebook continues to say its platform isn’t a content platform; that’s up to the rest of us. But owning communications hardware — which is how it sees Oculus Rift — is a major shift for Facebook. For it to win, Facebook may be thinking Skype, FaceTime, Hangouts and maybe even Vodafone are ever more in the crosshairs.It says, fascinatingly, that every single one of the Four Horsemen — Apple, Google, Microsoft and Facebook (which actually unfairly excludes Amazon) are now vertically integrated hardware and software businesses. You know, the exact thing everyone has been saying would be Apple’s downfall “any time now” for the last 30 years.

Henry Stuart, co-founder, Visualise

Having used Oculus Rift on behalf of numerous client campaigns to create experiences that can do everything from immersing you into another world you can move around, putting you in the driving seat of an F1 car or even make you feel like you're in the middle of a performing band, this acquisition is incredibly exciting and important for us.It is important for the world of virtual reality and how that intersects with marketing in a number of ways. Firstly, the acquisition will highlight Oculus, 360 degree and immersive content to brands that haven’t yet considered ways it could benefit them. Secondly, it will create public interest in a bleeding-edge area of content that just a few short years ago wouldn’t have been possible.Thirdly and perhaps most significantly for us and the brands we work with, I predict it will expedite the process of bringing Oculus to the masses as a commercial product. This has incredible in and out-of-home applications. For instance, given the Oculus Rift headset gives wearers the same disorientation and spatial awareness, members of the public could trial a new theme park ride before it is even open to the public, or be given a test drive in a car that isn’t on a forecourt in the world!

Rachelle Denton, community strategist,TH_NK

It’s the well worn story of the start up fairy tale. A garage and a big dream. Crowd-funding the path to industry giants with the golden Silicon Valley coins. But who can call ownership on the end product when so many people feel they have a stake in Oculus Rift’s development? From Palmer Lucke, the creator, to the early Kickstarter backers that believed in the vision for an open source virtual reality product, to the venture capitalist that gave the project enough financial backing to rise Oculus Rift to such level that Facebook became interested. This is the topic under hot debate.The one thing we know from its path to popularity is that everyone is interested in virtual reality. Can it be bigger than mobile? Unlikely, in it’s current form. Zuckerburg has spoken about looking at applying the technology to new verticals, with an odd reference to VR doctor visits thrown in. However, this might be how VR comes to be more interesting than mobile, rather than work to replace it.There are quite a few people questioning the investment by Facebook. They appear to be cash rich after getting their IPO money and keen to spend it on new initiatives, and we think it ’s interesting to see them take a step towards such diversification. The investment in VR feels like high-end gambling, it’s a product that comes without a host of users attached to it (think Whatsapp) that is get to be fully conceived, and therefore accurately valued. So, what can we expect from the sale? A more polished product offering with interesting vertical applications and experiments. Facebook think it could go places, and they have the money to make a substantial bet on its future.

Nick Hearne, senior creative, We Are Social

I’ve been following Oculus Rift since it first launched with a $250k Kickstarter campaign back in September 2012. It’s been an incredibly exciting company to watch develop and grow, which is why I’m feeling both a sense of admiration and trepidation about today’s news. The Oculus Rift virtual reality headset is not an everyday piece of wearable tech, so Facebook will need to work on a way to integrate it into people's lives and make people want to use it on the move, like Google Glass. Facebook will need to drive developments in virtual retinal display to reduce the size of the device and make it more mobile – no mean feat. It’s also currently an isolating, insular experience, so it will be challenging for Facebook to develop into a more social experience. While it is excellent for 3D immersive gaming, I can't currently see it working with the type of games like Farmville or Candy Crush that thrive off Facebook integration. I’d certainly question whether this is even the right move for Facebook right now. For me, Google's move into robotics with the purchase of Boston Dynamics has more credibility than Facebook moving into virtual reality. We’ll have to wait and see whether this acquisition is an admirable ‘moonshot’, or a case of joining the scramble to snap up any hot new tech companies for Zuckerberg and co.

Tom Manning, technology director, Forward3D

Facebook's purchase of Oculus VR certainly looks to be gaming-driven at first but as Zuckerberg's own thoughts suggest, this acquisition provides Facebook with a platform to mould its long-term future. Facebook had the opportunity to dominate mobile both from a software perspective but also from platform and operating system view. It didn’t and with the growth of Android and the desirability of iOS, Facebook is looking to secure its future.Regardless of the future plans this may bring, this is a clear technology play by Facebook and not a strategic user acquisition or talent buy. It's a major bet on the next big platform and where computing is going. Tech giants are publicly grasping for the platform and technology that will dominate user engagement for the next generation; this is another glimpse at where their bets are being positioned.Could we see the return and adoption of virtual worlds similar to Second Life? The combination of Facebook and Oculus VR certainly does suggest this with the data and technology both bring to the table. Whatever technology the global population will engage with in the future though, for companies to be successful in garnering a market leading audience that can be monetized, it must seamlessly fit into our everyday lives and be driven by our relationships, the primary motivation for our desire for information.

Richard Smith, account director, Mindshare UK

The raft of recent acquisitions by Facebook makes another one seem somewhat believable, but the lack of an obvious link between the social network (with hordes of casual gamers) and the VR company (designing hardware for hard-core gamers) has left many perplexed: Whatsapp was not that surprising, Oculus is.For Facebook; one of the original 21st century start-ups, this move helps them stay at the forefront of not just an emerging technology but of a new way of communicating, and a new way of making social connections even more real.VR is a very hot topic right now, and with Sony recently revealing its VR headsets, it’s a new bit of technology that is not going away. VR will unlikely have a place to play just yet on the social network, but the fact that Oculus has some of the most advanced hardware and expertise in making unreal experiences scarily real, would definitely appeal to a social network that prides itslef on being the facilitator of people’s social lives.How Facebook might use it? Despite the Rift’s past being focused in the gaming world, its current applications are much broader than traditional video game experiences, it’s much more about recreating any kind of unreal experience.The example of O2 using the Rift to create training simulations of the England Rugby Team to bring the real rugby experience to consumers is testament to that. Oculus has created a method of communicating incredibly real experiences, and shown its huge potential, and Facebook, with its eye on the future, recognises the excitement amongst the developer world and recognises that this hardware could be the next step in making social experiences even more real.

Patrick Salyer, CEO, Gigya

Facebook's acquisition of Oculus is about more than Facebook merely attempting to get into an emerging market (virtual reality). Rather, with this acquisition, Facebook is attempting to extend and own identity within the internet of things. There's an amazing amount of value for Facebook, its users and brands in allowing users to leverage their Facebook identities on different VR programs. This permission-based identity data could be tied to user activities that take place within those VR programs which opens up some very interesting personalisation and targeted marketing opportunities for brands. When it comes to war for identity on the web, Facebook clearly understands the stakes. Acquiring Oculus should give the world's largest social network a big boost as VR becomes a mainstream technology in the next few years.

Sebastian Dreyfus, managing director – Europe, Rosetta

For anyone who read the science fiction book Snow Crash by Neal Stephenson, this acquisition by Facebook is not surprising. We’re seeing the online personas of consumers becoming more and more entwined with their actual lives. We are approaching the point where the two are one and the same, which means that marketers must engage consumers with a greater focus on digital innovation. Once criticised for its slowness to adapt to changing tech – such as the rise of mobile – Facebook is now firmly on the front foot, anticipating changing behaviour.

Ariel King, content strategist, Arena

I don't necessarily think we're going to start seeing AR enabled ads in our newsfeeds, or everyone walking around with the gear around their heads sharing live updates to Facebook. I also don't think this acquisition will be much of a shock to the system for users, particularly as it's not an existing social platform is probably a bit difficult for everyone to wrap their heads around why this is even important. If anything, this is another example of a large company buying a smaller one to utilise their tech, but not change the game of their core product. This could be more of their answer to Google Glass to help them compete in the wearable tech space. I think that's the more likely outcome- although when it comes to moving into the tech space, the Facebook Phone didn't make it very far if I recall.

Sophia Amin, communications and marketing director, IAB

My first OR encounter took place at the heart of digital cool – in Austin this year at SXSW. I opted for a Topshop catwalk where I sat front row and ogled the SS14 collection. It’s a bit like Avatar where you entirely forget the ‘normal’ part of the film – as whilst Jarvis Cocker walked into the actual room, I was busy eyeing up cropped trousers and floral frills on planet Oculus. Unbelievable how it transported me out of that room to the point of bending down to pick up petals of confetti wafted over the front row. Make those petals bear a voucher and I’m buying that floral dress. This technology offers boundless opportunities for gaming and its associated advertising because you really are there in the moment lapping your best mate around the circuit, not sat on your lumpy couch. Far more likely to opt for a test drive in the virtual world then and there if you don’t actually have to book it in next week. A recent IAB Creative Showcase winner, the Nissan IDX campaign by AKQA involved the hard to reach youth audience by letting them co-design the car through an immersive Oculus VR experience at the Tokyo Motor Show. Seriously engaging, seriously clever and seriously cool. Try it if you can.

Content created with:

Somethin’ Else created online video for Virgin Media featuring music performance and interviews. The agency also produced social media and online content for the BRIT Awards.

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Mindshare is a global media and marketing services company created in 1997. As one of the world’s largest media agencies, Mindshare is responsible for a large majority of GroupM/WPP's global marketing billings and campaigns.  

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TH_NK is a digital transformation agency. We work with clients like Shop Direct, ASOS, LV=, Channel 4, Pottermore and Atom Bank to set and realise their digital ambitions.

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