Your Questions Answered: Virtual Reality, Augmented Reality and 360 Video

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A guide to headsets: (From l.) Google Cardboard, Google Daydream headset with phone, HTC Vive, Samsung Gear, Sony Playstation VR headset and Oculus Rift
A guide to headsets: (From l.) Google Cardboard, Google Daydream headset with phone, HTC Vive, Samsung Gear, Sony Playstation VR headset and Oculus Rift
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Virtual reality is the holy grail for marketers who want to transport consumers to the islands of sunny Hawaii or allow them to test-drive a car from their couches. VR provides a new level of immersion with a brand or product, absent other distractions. It's no wonder, then, that marketers are scrambling to figure out how they can play in the space.

But in this nascent stage, there are no advertising standards or turnkey solutions for marketers. Even what constitutes VR isn't necessarily agreed upon.

So as you explore VR opportunities for your brand or client, here are answers to some of the questions you may be too afraid to ask.

What is the difference between 360 video, virtual reality and augmented reality?

Not every video you watch with a VR headset is virtual reality. VR has become the catch-all phrase for content viewed in this manner, but in actuality, VR is a fully immersive experience that transports you out of your living room or office, or wherever you are consuming the content, into a computer-generated world that you can interact with and navigate through.

The 360-degree video that is being championed by YouTube and Facebook isn't VR. These are videos that capture the entire scene around the camera, giving you the feeling of actually being in the jungle or on stage at a concert. But while you can look around in a way a traditional video doesn't allow, 360-video doesn't offer the same level of interactivity as VR.

Augmented reality has also received plenty of buzz this year with the advent of Pokemon Go. AR essentially inserts virtual objects into your real-world view. The phrase mixed reality is also sometimes used in this context.

Why should my brand experiment with VR?

Virtual reality provides a level of immersion that can't be achieved on other screens, said Dario Raciti, director at Zero Code, the interactive entertainment arm of OMD. While wearing a VR headset, there are no other distractions. It can also give consumers access to locations and events they perhaps could never experience in real life. In this way, brands can develop a deeper connection with audiences remotely.

And while it is still early, VR may actually boost your return on investment. According to a survey released this summer from research firm Greenlight VR, 53% of respondents said they would be more likely to purchase from a brand that utilizes VR than one that doesn't.

Is VR right for my brand?

Some industries lend themselves to VR more naturally than others. Entertainment companies such as video game makers and movie studios are the most obvious beneficiaries of the technology.

VR is also expected to change the way the travel industry markets itself. Marriott Hotels introduced "VRoom Service" at select locations last year, allowing guests to borrow Samsung Gear VR headsets that come preloaded with travel experiences.

For automakers, VR could transform the test drive. Toyota, for example, created a futuristic VR experience where users could experience the new Prius Prime.

But any brand that is targeting an 18-to-34-year-old demographic should be thinking about VR, said Peter Naylor, senior VP-ad sales at Hulu, especially those that want to be known for innovation.

Where should I start?

Before you even think about jumping into VR, it is important to already have a clear content-marketing strategy in place. Given that, 360 video is a great on-ramp to experiment with VR. For many consumers, it is the first way they are becoming acquainted with virtual reality, since it only requires a cheap cardboard device to experience. in a VR-like way.

Digital publishers who have VR initiatives like Condé Nast, Time Inc. and The New York Times make for good distribution platforms and content partners since they already have scale, an audience base and know how to create content, said Cary Tilds, chief innovation officer, GroupM.

But Mr. Raciti cautions that much of what these publishers are doing is 360 video, and while that was exciting a year and a half ago, these days innovation means exploring a deeper level of immersion.

What are the opportunities for marketers?

While there is no true standard yet for advertising in and around virtual reality content, one thing is almost certain: For the most part, advertising won't take the form of the traditional 15-second or 30-second pre-roll or mid-roll spot.

"You need to give people time to feel where they are and walk around," Mr. Raciti said. "You don't want something that will take them out of the experience."

Advertisers will have the opportunity to co-develop or sponsor a piece of content. Product placement is also being discussed.

And even if traditional types of commercials won't likely be the norm in VR, it doesn't mean some publishers aren't giving it a shot. Gannett launched a weekly VR show earlier this month called "VRTually There." The show will offer brands a dedicated ad unit called a "cubemercial," which a spokeswoman said "allows the viewer to be completely immersed into the ad and gives brands the opportunity to share creative content (images or videos) on the walls surrounding the viewer." Toyota is paying for the cubemercial for the first two episodes of the show. The ad unit will run for 15 seconds between the show's first and second segments."

Of course, brands can create their own VR experiences that can live alongside other original immersive content. A brand, for example, might choose to sponsor one of Hulu's upcoming Live Nation VR concert experiences, Mr. Naylor said. At the top of the content, it would be clear that the experience is being brought to you by that marketer and may include a promo for viewers to stay tuned after the show for more VR content from that brand.

"It is about adjacency versus interruption," Mr. Naylor said.

How much does it cost?

The cost to produce a piece of VR content will vary depending on the quality and experience. But the entry point with 360 video is about $150,000 with some 360 video costing as much as $1 million, Mr. Raciti estimated. More interactive experiences start at $500,000, he said.

But as VR cameras come down in price and make it easier to turn out VR experiences quickly, the cost to produce VR content will abate, said Bryn Mooser, CEO and co-founder, HuffPost RYOT.

How big of a business is VR?

Sales of VR hardware, including goggles that work with smartphones, is expected to reach $1.64 billion this year, according to research firm IHS. The installed base of VR headsets is expected to soar from 4 million in 2015 to 81 million by 2020 and consumer spending on VR entertainment will hit $3.3 billion that same year.

What are the different types of VR devices?

There are two primary types of VR devices—headsets with their own displays and cases that utilize a smartphone for the screen and processor. For the most part, the devices that have been in the marketplace thus far have been geared toward the early adopter. Facebook's Oculus Rift and HTC's Vive, for example, cost anywhere from $600 to $800.

But the launch of Sony's PlayStation VR headset, retailing at $399, earlier this month, and the upcoming debut of Google's Daydream View at $79, is expected to make VR more accessible to the masses.

There are some other more affordable devices like Samsung Gear at $99, which fits over Galaxy smartphones, and the essentially disposable cases like Google Cardboard, which are cheap and frequently given away.

What are common mistakes advertisers make with VR?

You cannot just apply what you are doing in TV or digital to VR.

It's also important to find the right producers, directors and developers. Poorly executed VR not only can turn people off the experience, but can actually make people feel seasick.

So who are the best VR producers?

There are plenty of VR studios out there, but some of the ones that come highly recommended from the ad community include: The Mill, Wevr, Within, Baobab and Framestore.

How do you measure the reach of VR?

Unfortunately, there are currently no standards for measuring the reach of VR content. And at least right now, that isn't a pressing concern, Mr. Naylor said. At this juncture, marketers who are testing VR shouldn't expect their creative to reach a ton of eyeballs. It is about innovating and improving the content and experiences, he said. But that doesn't mean there isn't an audience.

Pepsi's Mountain Dew VR experience tied to the NBA All-Star Game in Toronto garnered about 150 million views, the beverage giant said at an industry conference earlier this month. The experience, which featured NBA stars and local Toronto artists, allowed people to create 3-D art using Google's Tilt Brush.

What's next for VR?

The next phase of VR is total immersion, Mr. Mooser said. VR users won't just be able to look around. Rather than being a passive spectator in the story, they will control and create the story, he said.