Is the Market Ready for Immersive Advertising?

With the recent Augmented Reality announcements by Apple and SnapChat, it begs the question; is the advertising market finally ready for the mass adoption of immersive media advertisements? For years consumers have been flocking to mobile devices, and advertisers have tried to keep pace by adopting desktop ad formats to mobile. Although banner ads, rich media display, native, and video ads work, to a greater or lesser degree, they are still formats of another era trying to be shoehorned into a new one. Mobile has changed the way in which we engage with content because it is…well, mobile. It moves. It’s always accessible and it’s with us all the time (even the bathroom!). It has dozens of sensors built in that can tell where you are, how fast you’re moving, your vital signs, and what you’re looking at.

The need for marketing content that is built for the way mobile devices work that is organic to how consumers use and interact with this device, seems to be long overdue. New formats like 360-degree video and images, 3D models, Augmented Reality and Virtual Reality; however, are broader, more interactive content experiences that utilize device sensors to engage consumers in a uniquely mobile way.

I do think that a significant portion of the population of developed countries, and eventually all countries, will have immersive experiences every day, almost like eating three meals a day. It will become that much a part of you.”

—Tim Cook, Apple

The use of advanced media formats for advertising is long overdue not because they respond to movement, touch, and orientation, but because they can turn a very small screen into a much bigger, broader, immersive brand experience. More importantly; however, new media formats take advantage of mobile device sensors that provide new data that help digital advertisers better pin-point market to consumers. Immersive advertising paves the way for monetizable engagement because its intuitively interactive and able to track, measure, and report on human attention – which may very well replace click-through as the new ad currency. But; however superior, is the market ready to embrace these new forms of media and jump into the world of immersive advertising? Below is list of reasons why the time may be now for marketers to embrace immersive.

Covid Inspired Digital Acceleration

If immersive media ad formats are going to take off, both digital and mobile usage must continue to grow. Thanks to Covid, that is exactly what seems to be happening. According to Johnny Hornby, founder of The Partnership, a WPP-backed agency: “In the last three months we have seen three years’ worth of digital acceleration take place, that has manifested itself in massive increases in people being online [and] massive increases in online shopping, most of which will not reverse.”  (Financial Times, June 2020).

According to Statista since March 2020, worldwide device usage has increased between 40% and 70% depending on the region. According to a recent survey by Twigby, 2020, texting is up by 37%, social media activity is up by 36%, and video calling is up 32%. In the last 3 years alone, the amount of time spent on the mobile web increased 575% and will likely continue to increase as technology improves.

As mobile usage goes up, so does advertising expenditures. Mobile ads are currently the fastest growing segment in advertising. A $240B global market, mobile advertising grew in the US grew by 21% in 2020 to $120 Billion and is forecasted to grow by 40% between 2019-2025 and estimated to be 75% of all digital ad spend by 2022.  Correspondingly, mobile ad placement in the US grew 95% in 2020 (App Annie State of Mobile Report 2020).

AR and VR are still relatively expensive technologies that require a lot of development resources, but as availability becomes more widespread so will the advertising possibilities, even for smaller brands with limited budgets.”

– Martech Today

Immersive Media Out of Hype Cycle

But what about Immersive Media? Are we any closer to mass adoption? Several indicators suggest if not already there, we are very close. One of the best indicators is Gartner’s Hype Cycle. In 2015 for example, AR and VR were in the Trough of Disillusionment, but in 2019 they are not even on the curve. Today, Immersive Media markets like VR, AR, 360 are now considered mature due to enterprise adoption, and as consumer awareness and hardware hit a critical mass, marketers are in position to apply these formats more universally.

Supporting this commercial adoption phase, the number of companies using immersive media technology or delivering immersive experiences as part of their product offering is also rising: 

• Snap Chat has over three-quarters of its users accessing the app’s augmented reality features daily. In 2020, Snap Chat launched a DIY AR lens builder for developers & continue to enhance their offerings like their new shared AR building feature with Lego.
• Meitu is an AR makeup app that claims to have over 500 million active monthly users.
• In 2018, L’Oréal’s purchased leading AR beauty app Modiface for undisclosed millions.
• Google added 3D AR ad tools to YouTube (Aug 2019) in response to market demand for more advanced forms of content & has their ARCore product for developers.
• TikTok, with over 800 million active users, launched AR ads in Summer 2020.
• Apple has their own ARKit, offers newer iPhone users the ability to create 3D models with Object Capture and acquired startup NextVR for $100 million in early summer 2020.
• Facebook has introduced Augmented Reality Ads and has invested billions in immersive tech over the past seven years.

What does this mean for the future of digital advertising?

The move to mobile and immersive media means a move closer to the holy grail, or a 1:1 consumer brand engagement. With mass media channels, like TV and Desktop Computers, connecting with consumers has always been a game of roulette – meaning, advertisers try to reach as many eyeballs as possible in hopes that some will see it, and maybe respond somewhere down the line. The combination of mobile and interactive immersive experiences, however, offers marketers the possibility of a closer one-to-one relationship between the individual and the brand.

Businesses are rethinking what ads are. Instead of interruption, ads can actually be a way to spend more valuable time with consumers” – Marketing Land

See how this immersive ad for Jagermesiter organically drives time spent with brand; the more you explore, the more there is to see!

By tapping into device sensors, advertisers are no longer dependent on the click to know if and how consumers are engaging with content. And, the better immersive technology becomes the more personalized immersive ad content can become. But, however future forward 1:1 engagement may be, there are other reasons why marketers should be using immersive media for digital advertising right now.

1) Ad blindness: Each year advertisers spend more and more money to reach fewer eyeballs because consumers are becoming numb, or “blind”, to standard ads either simply ignoring them, staring at the “skip” button, or not even recognizing they’re there. With a Nielsen study indicating immersive ads are as much as 300% more engaging than even video, one must conclude that it’s worthwhile to allocate at least a fraction of ordinary display ad budgets to immersive advertising alternatives.

2) Ad Fraud: Ads that are clicked on by bots (non-humans) is estimated to range between 15% to 25% of all ad click-throughs. These “false” clicks cost advertisers billions of dollars every year in wasted ad spend. Immersive ads are dependent on device sensors, and we have yet to hear of a bot that can duplicate the organic actions taken by humans in an immersive unit. Therefore all activity, clicks included, are verifiably human.

3) Ad Performance Control: Currently, the ability to gauge the performance of your ad is either largely based on the number of clicks (real or false) an ad receives or attribution studies conducted several weeks, or even months, after the ad campaign run. With immersive advertising, using sensor data, advertisers can tell within hours if their campaign is working simply by looking at how real people are engaging with their brand. This time spent with brand is invaluable and not only possible but also measurable with immersive advertising.

4) No More Cookies! New policies blocking use of cookies and other tracking data is making it harder to target consumers. Immersive advertising doesn’t rely on cookies or collect any privacy protected information and can often help marketers target and re-target just as well or better than cookies. In the case of immersive ads, retargeting can be based on how the consumer engaged with a brand, ie., did they look at the red or blue car? How long did they look at them? What else did they look at? How did they engage? etc.

Whether marketers are ready or not, consumers will always make advertising pay if they don’t keep up with technology or heed the needs of the very consumers they’re targeting. As our world becomes more immersive, so must the ways in which brands connect with consumers. The transition to immersive isn’t as far off as one might think and marketers who are actively seeking out Immersive Advertising Technology now and actively testing will be the ones who will survive in the rapidly approaching 4th Transformation of Technology.

Want to know more about immersive advertising and how it could help you? Feel free to contact me directly at rbruza@advrtas.com.