360 VR advertising is the enterprise’s first sticky monetization model

360 VR advertising is the enterprise’s first sticky monetization model

Image Credit: Jeremy Ellsworth / Edoramedia

Monetizing VR content continues to be a tricky challenge for creators and publishers alike. There’s just hardly any rules of thumb to follow as the industry busies itself with building up a track record of trial and error, and while the addressable market of geared-up users continues to grow. Paid content works in some cases, albeit mostly for premium titles, but it’s not pairing so nicely with mobile VR, which in turn struggles to live on in-app purchases or subscriptions.
In fact, the only model that appears to have found its legs is VR advertising, and it’s thanks to the positive feedback loop that the major players in the space — namely, Immersv, OmniVirt, and Vertebrae — have established with advertisers, who are more than convinced at this stage about what 360-degree VR ads in particular are capable of delivering in the form of pre-roll and interstitial placements before and in between the free-to-play content.

Why 360-degree VR ads work

“In any new market, the ability to streamline creative production and content distribution will make it easier for brands and agencies to experiment with new formats,” Michael Rucker, co-founder and COO at OmniVirt, said. “360 VR Video has become the most utilized format for both of these reasons.”
360-degree VR ads represent a particularly sticky model because, first of all, users are well-adjusted to the compromise of paying with their directed attention for a short period of time in order to access worthwhile content. Indeed, as Agatha Bochenek, head of mobile and VR/AR advertising sales at Unity, mentioned in her talk in May at Vision 2017, “almost 80 percent of consumers want ads in exchange for more content.”
“Having options like pre-roll or using ads as content gates allows developers to monetize their work, particularly things like videos or experiences that might not have a good direct channel to monetize. This model is very successful on web platforms like YouTube, so it seems logical that it would work well on VR,” Rob Carroll, advisor and VR developer evangelist at Immersv, said. “I feel that pausing the app content and then showing the ad in a controlled environment is the best way to show ads in VR. It doesn’t require the developer to try and place ads into their world, and it allows the ad provider to make sure the experience the user is having is a good one.”
Secondly, the user engagement levels for 360-degree VR ads are huge compared to traditional digital ads, which makes for an easy transition process for advertisers that are increasingly positioning VR units as a staple in their campaigns. In partnership with Vertebrae, 360 VR ads have even recently been backed as a standardized format by the IAB, the leading authority in digital ad standardization.
“In the early days of VR advertising, 360 video has offered the best reach, and the main reason we worked with the IAB to standardize 360 as a format is because it scales across different headset environments in our network (both pre-roll and interstitial), and onto mobile web and apps (as interstitial and expandable display),” Vince Cacace, founder and CEO at Vertebrae, said.

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