While still in its early stages, virtual reality (VR) is poised to become a market giant in the coming years if it can maintain its current growth levels. By the end of 2021, new unit sales of VR headsets are projected to hit 6.1 million, and by 2024, it is projected that 34 million cumulative units will have been installed worldwide.
This indicates a significant market opportunity for advertisers, and tech giants like Facebook have already tested the waters of advertising within VR systems, with mixed feedback.
First, let’s address what VR refers to. Virtual reality (VR) is software that renders a user’s environment into a 3-dimensional, interactive space. Currently, the limitations of technology make it such that this space is accessed via headsets and gloves in order to transmit visual, audio and haptic feedback.
Where companies can identify an opportunity for advertising is within the games and environments created by the VR headsets from industry leaders like Sony, Samsung, Facebook and Google, who are the current major players in this space. As mentioned before, Facebook was an early adopter of advertising within virtual reality, running limited tests on Oculus apps.
Outside of the video game industry, consumers are also trending towards virtual reality for their online shopping. A study by Ericsson ConsumerLab identified that shoppers were growing more interested in using VR to shop online for products such as smartphones that, in the virtual store, could be held and felt in hand prior to purchase.
Scaling this up, car manufacturers like Cadillac are also adopting VR advertising in order to enhance the online shopping experience. For the first time ever, technology allows customers to get the look and feel of a car without ever going in-person to a dealership.
Although these initiatives predate the Covid-19 pandemic, the events of 2020 have undoubtedly accelerated the change in landscape to further advantage companies that can quickly adopt virtual reality shopping experiences, while those stuck in brick and mortar locations will be left behind. Therefore, advertisers will have to remain nimble and ready to address the gradual mass adoption of VR and the new advertising spaces that it provides now, and will provide in the years to come.
By Joshua Jung