Marketing’s VR Problem

Justin Daab Marketing Strategy & Planning

There’s virtually no reason for most marketers to care about VR.

If it quacks like a bubble…

Full disclosure—historically, Magnani has been as guilty as any about touting the potential of VR. We have VR officially listed in our capabilities and we have trained our creators and developers to produce amazing experiences, deliverable on a number of platforms. But, as of today, VR is not delivering on that potential in any way that is compelling from a marketing or advertising perspective. So what’s happening?

A close inspection of the market over the past year shows an industry where investment curves dwarf actual consumer adoption curves. In most industries, that would portend the imminent bursting of a (virtual) bubble. In their 2017 Hype Cycle, Gartner Research places VR as emerging out of the “trough of disillusionment” and into the “slope of enlightenment.” That scale assumes the tech will plateau in adoption in 2 to 5 years. If we believe that, and we follow the adoption rates, then VR will never really scale to be important. It will be the next LaserDisc.


Lack of a killer app

VR has the ability to take the user to any place, time, or alternate universe content creators can imagine. The problem appears to be that the creators are not imaging very much yet. When consumers purchase the hardware and make their first excited trip to the Oculus store, they are met with a limited hodge-podge of content. Some interesting ideas. An occasional compelling technology demo. Collections of poorly implemented low-resolution 360-degree video. But no real reason to invest much time with the technology.

Our experience demonstrating the technology for clients and employees alike has been fairly consistent in both the initial surprise and delight that the technology works as well as it does followed by questioning for what purpose one would actually use it for any extended period of time. Compound that feeling with the fact that a computer-based VR system with an Oculus Rift or an HTC Vive costs upwards of $1,200 US and it’s clear why the dearth of compelling content is hobbling VR out of the gate.

VR supporters will cry, “What about the Playstation VR?” While it’s true, more than a million units have sold as add-ons to the game console, it still represents less than a 2% attach rate to its overall console sales. Hardly a compelling business case for game developers.

The same goes for marketers. Creating a compelling VR experience is costly. While there are obviously a few specific use cases where that investment make sense, there is no general audience of any scale to think of the technology as a universal marketing medium.

Blame evolutionary biology

They say that the reason most of us are restless the first night in a strange place is that we’ve been programmed by evolutionary biology to not enter a deep sleep. We need to keep our wits about us until the environment has been proven to be safe. Similarly, for every visual delight VR technology can deliver, there is, at least for me, always a nagging feeling that I am blindfolded, vulnerable. It begs a question in my mind whether we are also biologically programmed to be somewhat uncomfortable by cutting off our senses to the surrounding environment.

RIP VR. Long live AR.

The good news is that all of the technology and content development investments made in the VR space need not be relegated to sunk costs. As slow as the uptake in VR has been over the past few years, the adoption of high quality augmented reality (AR) capable devices eclipsed the totality of VR units in a single day when Apple released iOS 11. Every mobile handset from the iPhone 6s up can run software based on Apple’s ARKit. That is already billions of active, waiting users, worldwide. Even prior to the official iOS 11 release, developers started to make compelling demos. And just days after the official rollout, Swedish furniture giant, Ikea delivered on the promise of ARKit.

AR, unlike VR, relies on a tangible connection to the users’ physical space. AR removes the barrier most customers have in trying to visualize how a product would actually fit into their environment or their lives in general. AR on a mobile handset finally gives consumers a low-cost, low-risk way to try out virtual technology and marketers a way to let a large group of consumers instantly try out, try on, and imagine owning their products. In other words, AR gives marketers an augmented (pun intended) version of what they have already been doing in every other medium for decades. Seems like the smarter way forward, for now.


Magnani is an experience design and strategy firm that crafts transformational digital experiences to delight users and deliver sustainable competitive market advantages for our clients.


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