Are Brands Wasting Their Money on Virtual Reality?

A few weeks back, I had the opportunity to (sort of) live out my fantasy of being an NFL quarterback. While attending Social Media Week NY, I came across a virtual reality (VR) football game; my time to become Tom Brady had finally arrived. I strapped on the headset I pretended was a helmet, put my hands through a pair of strangely shaped controllers, and stepped into the virtual huddle to command my team to victory.

One touchdown pass and many incompletions later, I re-entered reality with ambivalence. The game was fun, but unnatural. Due to the motion sensors’ limitations, it felt like I was throwing darts, not a football. Still, despite its flaws, the potential was exciting.

Whenever you read about virtual reality, that word—“potential”—comes up a lot. Companies are clearly enthused about where the VR industry is headed. Some agencies are so excited by VR’s potential that they are covering the costs for brands interested in creating VR content, according to Digiday.

But at this stage of virtual reality’s evolution, is the technology a smart choice for brands looking for an immediate return on investment? Maybe not.

VR’s soft arrival

Jeremy Bailenson, a professor of communication at Stanford and the founder and director of Virtual Human Interaction Lab, is not among those expecting VR to transform branded entertainment overnight. At the most basic level, the cost renders it a luxury many brands can’t afford.

“Movies only have to account for the small window of space where you point the camera,” Bailenson told Slate. “Video games are not infinite. But VR has to work from any distance, any angle, all the time, so the cost of making content is astronomical.”

Unlike traditional storytelling formats with a single narrative for the audience to follow, VR puts the viewer in control. The immersive experience allows you to take in multiple arcs at the same time, which makes the job of the producer that much harder.

“It’s a fundamental shift in how stories are told,” said Ji Lee, creative lead at Facebook, during a VaynerMedia-hosted Social Media Week presentation. “You’re swapping linear for 360-degree, spherical, multidimensional storytelling. And the user has a new role as participant.”

In Lee’s mind, there are two major hurdles currently holding back virtual reality: scalability and content. Despite mainstream devices like the Samsung Gear VR and Oculus Rift, the technology still lacks widespread adoption. And even for customers who can afford VR, the library of content is limited. Plus, much of what exists so far makes for a great initial viewing experience, but loses its “wow” factor thereafter.

“When the iPhone first came out, there was a lot of utility to the apps. You’d go back and use them over and over,” said Zoey Taylor, business development at Framestore VR Studio. “With VR, you might put on a headset and use it for ten minutes in the morning, but people need a reason for repeated usage throughout the day.”

Even with multiple narratives at play, you’re not going to watch the same VR piece ad nauseum. And worse, much of the public isn’t yet able to appreciate the wonders of VR at all.

“In the early days, people could read reviews, but they couldn’t experience it themselves,” said Christine Cattano, global head of VR, executive producer at Framestore. “The press would cover it, there would be good buzz, but in terms of the larger population, they couldn’t actually know if it was good or bad. VR was being viewed in a vacuum.”

It’s tough for brands to swallow the costs of production knowing very few consumers will actually enjoy the end product. Only 6 percent of Americans were forecasted to own a VR headset in 2016, according to market research firm Strategy Analytics. And 93 percent of those in that small fraction owned cheaper smartphone models. While those numbers will improve this year, scale approaching any other mainstream media format remains years away.

But could there be an advantage in beating the pack—and reaping the rewards of the investment later?

Building for the future

Despite his hesitations, Bailenson believes VR does have some worthwhile applications in the present, though he limits those use cases to four categories. In the aforementioned Slate article, he describes those categories as follows:

• “Expensive: If it would cost a lot to do something in real life, like visit the statue of David in Florence, Italy, it might make sense to do it virtually.”
• “Dangerous: Climbing Mount Kilimanjaro might be the adventure of a lifetime, but it could also be your last. Several people die on its slopes every year.”
• “Impossible: You can’t travel back in time, grow a third arm, or experience life as a person of a different race or gender. But VR can give you a surprisingly visceral taste of what it would be like if you could.”
• “Rare: You could go whale-watching a dozen times without seeing a humpback breach right next to your boat. Or you could do it once in VR.”

For Framestore, early client investments in virtual reality have led to encouraging results. A mobile VR driving experience created for Volvo generated 28,000 app downloads and over 50,000 inquiries for more information, impressive totals even without a correlating dollar figure. Though sometimes, VR and ROI require a long-term mindset.

“When we first started working in VR, there were three goals for ROI: generating PR buzz, shifting a user’s perception of the tech, and being the first mover in the space,” said Cattano. “None of those have really changed, but I do think it’s a mistake to look for an immediate fiscal return on an investment into innovation. It’s more about, ‘How do I prep myself for this field in the future so in five years we’re not playing catch-up when it’s a more ubiquitous medium?'”

Case in point: “The Field Trip to Mars,” a one-off school bus built for Lockheed Martin to figuratively transport those on board to the Red Planet. The actual experience was limited to attendees at the USA Science & Engineering Festival, but the virtual field trip generated huge levels of worldwide press coverage and earned media. Framestore estimates that a year later, it still receives “15-20 inquires a day” about repurposing the idea.

“If you ask the question on behalf of the client, was it worth it for those 30 or so direct eyeballs, absolutely it was,” Taylor said. “While you can’t track the worth the way you would in traditional mediums we’re more used to, you have to open your mind a bit to the value of creating a bespoke experience for your consumer.”

Brands like Wayfair, an e-commerce company that sells home furnishings, are already starting to build a library of 3D scans of their products for anticipated future uses in the AR and VR realms. But is that the right move? On the one hand, a smart investment now can pay big dividends down the road. On the other, the “VR has potential one day” prediction is just that—a prediction. Since there is so little content out there, it’s difficult to know if what seems like quality VR content today might be outdated tomorrow.

“There are no true barometers for quality at the moment,” Taylor said. “It’s tough to recognize ‘high quality’ VR. People can see the potential, but they don’t have enough knowledge or comparisons yet to know what ‘good’ and ‘bad’ VR look like.”

Part of that quality conversation is ensuring that projects actually make sense for the VR treatment. Even those in the industry admit it’s not always the right tool for the job.

“We’ll sometimes, to the detriment of winning work, decide not to repurpose material just for the sake of virtual [reality],” Cattano said. “We try to encourage the conversation to hit the right points: How will this tech provide value for you? How will it solve a business problem?”

At the end of the day, that mindset is what Cattano believes is most important in determining if virtual reality is a smart use of budget. The answer varies depending on the specific task at hand, and whether VR provides value a cheaper medium simply can’t offer.

“We’re maturing into a place where we can look at it and say, ‘How does VR solve this problem uniquely?'” she said. “It has to be through the lens of what problem you’re solving rather than the ROI you’re generating, because ultimately, using VR to solve a specific problem is your ROI.”