After Mobile: Advertising Needs Virtual Reality

Advertising always seems to be behind the power curve. In 2015, mobile marketing spend increased, jumping from $6.7 billion in 2012 to a nearly $20 billion for a compound annual growth rate of 52%. But the percentage of marketing dollars spent on mobile was still under 25%. It’s not predicted to reach 25% until 2018. Marketers need to wake up. Consumers are spending more and more time on their devices, and the next big trend for mobile will be virtual reality.

In case you are still doubtful about the importance of the shift to mobile, the sheer number of people — 85,000– who attended the recent Mobile World Congress in Barcelona should convince you once and for all. In 2001, MWC was a small conference held in Cannes, and it was about phones, not pocket computers that provide computing power and data to people all over the world. For most people globally, the phone is the only computer they will ever have, and it does their banking, their e-commerce, and their health tracking. And oh yes, it is still capable of making voice calls, although those are becoming increasingly unimportant.

The return on mobile advertising has been consistently higher than on desktop, too. Mobile formats, especially video, command premium dollars and produce premium results. Although returns are predicted to decrease slightly as the bottom of the pyramid comes online, the increase in sheer volume should compensate for lower revenue per customer.

And we haven’t entered the world of virtual reality (VR) and augmented reality (AR) yet. That will happen later this year, when the Oculus Rift, the Gear VR, and the HTC Vive become commercially available. (The Gear can be tested at Best Buy, and the Oculus is already available for pre-order.) Less expensive alternatives, like Google Cardboard and its clones, all of which work on Android phones, are already in widespread use.

Facebook, which was very quick to adapt to mobile when it thought its desktop dominance might be threatened, has been even quicker to jump to VR. Mark Zuckerberg was on the stage during Samsung’s keynote at Mobile World Congress, proclaiming the virtues of the Samsung Gear VR headset, which uses Oculus technology. He said we are only beginning to make 360 video and VR content that will be useful on the GearVR, although over a million people have already seen virtual reality via Oculus technology, and of course he said that the Facebook-Oculus community already loves 360 video, even though it is so early. “One day soon all of us will have the power to broadcast live whenever we want, so our friends and family can share experiences,” said Zuckerberg. If Facebook has anything to do with this, you can be sure VR will contain advertising.

With VR headsets arriving this spring and even toy maker Mattel bringing one to market, advertisers who have been slow to adapt to mobile will have to work even harder to get ready for 360 video and Virtual Reality in advertising. There was a spate of articles two years ago on the coming of VR to advertising, and early movers like Coke and Nissan began experimenting. Yet until more consumers have headsets, VR will only be a novelty. Mobile, however, is no novelty, and a force to contend with for advertisers.