As virtual and augmented reality (VR/AR) usage grows among consumers, advertisers have been slow to incorporate the technology into their campaigns, market research firm Advertiser Perceptions has found. According to market data tracker Statista, consumer spending on VR and AR is expected to reach $72 billion by 2024 — and as Advertiser Perceptions notes, everyone with a smartphone already owns an AR-enabled device. But only 8 percent of advertisers have a full understanding of the benefits of VR/AR advertising, the study shows, and just 11 percent understand the audiences these technologies can reach.
“There’s a lack of common understanding,” says John Bishop, VP, business intelligence at Advertiser Perceptions. “In most cases, a lot of the people making these decisions aren’t users of this type of technology and these platforms.” This means agencies need to turn to AR and VR experts to justify dedicated budgets for the technology, instead of drawing outputs from general digital pools. Currently, AR/VR budgets sit in a “small nest of money” reserved for niche or experimental trials. And making that investment more mainstream is proving to be a bit of a challenge.
A key factor is the lack of case studies, which came up frequently in the company’s survey of over 100 advertisers. Respondents said they would find adoption easier if they could point to proven success, measurement, and metrics. “If I can’t measure it, it’s much harder for me to sell it,” Bishop explains. “If I can see case studies that look like or look similar to what we’re trying to achieve, then I can sell that idea.” Indeed, if these results were made available, advertisers would see that the use of AR/VR campaigns increasing brand awareness, as reported by marketers who have embraced the technology.
This is in contrast to advertisers who are new to the technology and perceive VR/AR placements more as lower-funnel marketing. “For those who haven’t used it, they think it’s more like, ‘let me go on your property and just be there, and you take us on the journey,’ Bishop notes. In fact, according to Bishop, AR/VR usage has shown upper-funnel impact on brand engagement. “We can put our brand there and actually have an impact on the story, as opposed to the other way around.”
Perception vs. (virtual) reality
Currently, 1 in 5 marketers report using AR/VR and 1 in 3 plan to increase their spend over the next 12 months. But Advertising Perceptions There are persistent barriers to adoption, including a lack of creative skills in advertising agencies, particularly those without expertise in the technology itself. “Marketers don’t necessarily have it in-house, so they look for experts in the market who can help them develop the tools and walk them through the whole process,” says Bishop.
Advertisers also questioned the scale and reach of the technology, and reported uncertainty about whether campaigns will reach their intended audience. Again, this reveals a gap between perception and reality, as those who have used AR/VR have reportedly had success in reaching younger audiences who have traditionally been harder to capture.
One area of AR/VR that advertisers are looking to invest in is the metaverse — although the definition of that term is nebulous at best. “When you think of Metaverse, it’s easy to beat,” comments Bishop. “A lot of the discourse revolves around Meta and the technology and visuals that come out of their announcements.” But the study showed that 32 percent of marketers are already using some form of Metaverse application, and another 45 percent plan to do so within the to do next two years. “So that’s 75 percent of marketers saying we expect these opportunities to grow over the next few years.”
Overall, the results show that more needs to be done to educate the market about VR/AR advertising and the responses indicated that agencies are open to training in this area through consultants and/or trade associations. “When trade organizations are behind it, when my peers are doing it, when my competitors are doing it, I’m more likely to walk into the room with more confidence,” Bishop says of the results.
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