As Oculus unleashes ad blitz, is it time for marketers to believe in virtual reality?

Oculus Quest 2 is billed by Facebook as “our most advanced all-in-one VR system yet. No PC or console needed. Explore an expansive library of awe-inspiring games and immersive experiences with unparalleled freedom.”

It wouldn’t be the first time that VR overpromised, but initial sales appear to be strong, reviews have been positive and avid social groups like those on Reddit are abuzz. For example, r/oculusquest saw a 166% increase in views last week. Additionally, there was also a 71% increase in page views to the Reddit virtual reality interest group.

While the tech savvy VR niche has been gearing up for the launch, Facebook is working on making certain that the general public — which is largely a captive lockdown audience — is dialed in as well. With the holiday season rapidly approaching Facebook has been aggressively running ‘Play for real‘ ads during the World Series, NFL broadcasts and elsewhere.

Despite the current momentum, the challenges are many for Oculus as well as VR as a whole. Barriers include limited user base, lack of high-profile game franchises and the failures of the past. “It is a double-edged sword,” says Morris Garrard, research analyst, Futuresource Consulting. “On the one hand you have Facebook investing heavily and pushing VR as the next mobile platform. So, it would be advisable to keep a keen eye on the development of the segment, while remaining wary that the gamble may not pay off.”

Welcome to Facebook’s newest ad platform

Perhaps the biggest knock on the Oculus is that consumers must log-in through a Facebook account in order to access the VR platform. Critics have been quick to point out that this is yet another touch point within the Facebook ecosystem that allows it to collect customer data for ad targeting.

Facebook hasn’t been shy about its ad-serving intentions. In a blog post it tells consumers, “Facebook will now use information about your Oculus activity, like which apps you use, to help provide these new social features and more relevant content, including ads.” Facebook did not respond to requests for further detail.

Garrard says, “it presents a significant opportunity for Facebook to gather user data as well as enabling them, to be a first mover on controlling what they see as potentially the next mobile platform.”

This is also a chance for Facebook to push further into the streaming gaming space, albeit as a small player compared to Twitch or YouTube. Having an entire gaming ecosystem in house may ultimately help, but Mixer and Microsoft proved there are no guarantees for success. Microsoft shut the Mixer division down in June and joined up with Facebook Gaming.

Current opportunities for marketers are small and ‘stunty’

Opportunities for marketers in the VR space are likely few and far between — for now. Still, it doesn’t take much fantasizing to see where VR is going. A key opportunity in this current Covid-19 world is for commercial partners to launch VR marketing experiences, enabling consumers to get “hands on” with products from the comfort of their own home, says Garrard. Already we have seen examples of this from the likes of Vroom, a car showroom run entirely in VR.

Steve Meyers, account director, gaming at TMA also sees “remote shopping as pretty viable in the near term as something that is stunty and PR-able.”

Then there are the typical gaming plays like interactive product placement and in-game advertisements such as branding on items including billboards or customizable stadium signage.

Short-form content is also an option. Brands can create dedicated VR content that serve as longform ads “think Mini’s ‘Backwater‘ VR short film from a few years ago,” says Meyers. Although, overly aggressive in-game ads can go bad quickly. For example, EA was called out last month for the ads in its UFC 4 game — which they ended up removing.

VR esports is another promising arena. Case in point: Beat Saber’s VR tournament in China saw 800,000 people tune in. “This tournament had small viewership, and this is definitely still niche, but creating esports events dedicated to VR is a start to bringing in eyeballs on the VR experience,” says Meyers.

But it isn’t all just about play, there’s also work. Facebook has been touting business use cases for Oculus. Last month, it unveiled demos of Infinite office. In partnership with Logitech, keyboards will be compatible making it possible for people to work within the Quest environment. Mark Zuckberg has said his teams are already holding meetings within this virtual space.

A checkered past, significant competition and other challenges

VR’s moment to shine will likely come when a large number of hit games become available for the new Oculus. Right now, the biggest hits for VR are limited to Half-Life: Alyx, Beat Saber, and Star Wars: Squadrons. “Without killer content from big publishers like Epic, Activision, Nintendo, and others who create massive franchises, the adoption will continue to be slow,” says Meyers. “Until then, fan-made versions of games and limited on-the-rails experiences likely won’t steal people away from the dominant gaming platforms of PC, console and mobile.”

Still, Activision, for one, is optimistic. Jonathan Stringfield, vice-president, global business marketing, measurement and insights at Activision Blizzard Media says: “More recent VR tech is improving the quality of images, lowering price points, and lessening reliance on external hardware and cumbersome wires — as the experience becomes more seamless and on par with viewing a quality TV, consumer interest may soon follow.”

He adds: “This year in particular we’re seeing a number of important advancements. From improvements in VR to the latest Playstation and Xbox consoles, the technology for consumers to experience immersive gaming experiences has never been more attainable nor capable of producing high-quality experiences that fully leverage at home technology, all within the comfort of our own living rooms. This presents a multitude of exciting opportunities for marketers to interact with consumers when they are most leaned-in, within one of the largest and fastest-growing consumer entertainment ecosystems.”

Consumers on Reddit are certainly onboard with the advances in VR. Since the Oculus Quest 2 hit stores and shipped on October 13, conversation on Reddit has remained strong. “There's a couple different couple different angles here,” says Reddit’s head of creative strategy, Will Cady. “There are people staying home, having more free time. Then there’s the idea of VR soon being a more realistic way of connecting people over long distances. And then there‘s also all of the stats [around the rise of] gaming. It all represents a leap forward.”

Consumer interest will certainly generate sales, with the total number of VR headsets expected to grow from 26 million units in 2019 to 60 million units globally in 2024, per Futuresource.

Even with Covid-19 driving digital entertainment and gaming usage way up, VR likely won’t “take off” as people might expect it to, says Meyers. “We’ll continue to see a slow pace of adoption, accelerated by small jumps when hardware releases.”

Marketers should remain skeptical, cautions Garrard. “VR has had lots of ‘moments’ in its short history, including the meteoric rise of mobile VR driven by Samsung’s GearVR, which have proven to be false dawns for the industry. VR has a history of overpromising and underdelivering, so whilst the launch of the Quest 2 has great potential, only time will tell whether this potential ever becomes fully realized.”

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