You're on a wooden plank. Pivoting, you find yourself on the precipice of a deep pit. Taking unsteady steps, you cross with your arms outstretched for balance. You teeter to the end, exhaling in relief—and are told to about-face and plunge in.
None of this is real, a clearly evident fact. Motion sensors are strapped to your ankles and $39,000 black goggles, made by a company called NVIS, whose customers include the U.S. Army and Navy, cover most of your face and sit heavily on your head. But still, you're terrified.
So you cheat and close your eyes to jump.
It's a bit like the leap marketers such as Coca-Cola, HBO and Nissan are taking into the nascent world of virtual reality. Well aware of the hurdles agencies, brands and the media must overcome first—not the least of which are the current cost of the technology and the cumbersomeness of the equipment—these first-movers are wagering on a marketing future where goggles can be bought at Walmart for $300 and brands can deliver visceral consumer experiences. Imagine Budweiser taking you behind the plate at the World Series or Pepsi giving you a virtual front-row seat at a Beyoncé concert.
But since marketers still need to provide the hardware, their efforts are currently confined to experiential marketing at large events, like the South by Southwest interactive festival and the Detroit Auto Show. However, the pace of innovation is likely to accelerate as new uses emerge—if, of course, more eyeballs migrate to VR technologies.
That may start to happen soon. Research firm MarketsandMarkets forecasts that manufacturers of VR and augmented-reality hardware—including smart glasses and head-mounted displays—will generate $1.06 billion in revenue globally by 2018.
"Everyone who does something [in VR] now, for the next five years, is going to be inventing something," said Aaron Clinger, technical director at Venables Bell & Partners. "That's really exciting for those of us who have seen the mobile and web revolution."
Thanks to Coke
Virtual reality could be transformative for the ad industry. Instead of interrupting people with ads, marketers could sponsor virtual experiences people actually seek out. But first, the ad industry has to understand this new playground.
"The mistake every new medium makes is trying to take what the old medium was. They read books on the radio at the beginning of radio; in the beginning of cinema, they shot plays. There's a completely new form of storytelling that has to evolve for this new [VR] canvas," said Chris Milk, a filmmaker and music-video director. Last year he shot a short film of a Beck performance for automaker Lincoln's rebranding campaign. He also created a rendering of it in 360 degrees with six GoPro cameras.
Consider Coca-Cola's approach. Last month it staged a VR experience at the World Cup, where participants entered a replica of the locker room at Brazil's Maracana Stadium; then, after putting on VR Oculus Rift goggles, they moved from the locker room to the pitch and played on the field, all without getting up from their seat.
Matt Wolf, Coca-Cola's head of global gaming, said there's branding within the experience, but the more valuable aspect is that viewers are getting access to something that wouldn't otherwise be possible. "It's about the authenticity of being inside that stadium," he said. "Yes, thanks to Coke."