Virtual Reality generates lots of buzz and massive investments. Isn’t it the next computing platform according to Facebook’s CEO Mark Zuckerberg? Hasn’t Magic Leap - the most secretive start-up- raised up to $1.4 billion to deliver on that promise?
Together with my colleague Samantha Merlivat, we decided to evaluate the opportunities VR will open up for marketers. In the next decade, we believe that unlike any channel to date, VR will offer highly immersive and intimate experiences with a future integrated with social and IoT. This unique combination will create not just new storytelling capabilities, but also opportunities to craft whole new experiences as part of the brand offering. Companies like Facebook are betting on VR to fulfill the dream of what Second Life tried to achieve in 2007: enabling social interactions and gatherings within virtual spaces. Moving forward, VR will be enhanced by sensory devices that increase the immersive and realistic nature of virtual experiences and transition the users from passive participant to live actor. Think of it as “human teleportation”.
We’re not there yet. Let’s look at the facts. Magic Leap has not launched anything yet and TechCrunch is right to question its PR approach. Device penetration is still niche and will remain so for a couple more years. Content costs are high and production is complicated. Forrester estimates that critical-mass consumer adoption of high-end VR headsets is at least five years away. In the meantime, 360 video content will flourish on low-to-mid-end VR devices, but 360 video is not a truly immersive VR experience. Benefits for brands and consumers alike are limited.
Moonlighting as a contributor to our CMO role's research, I've just published a major new report about how virtual reality will affect marketers, collaborating with Forrester's lead on digital disruption, James McQuivey, PhD.
CMOs and other marketers have four choices when it comes to virtual reality (VR). Most of you should wait and see, because there's no business imperative to invest scarce time and resources in VR this year. But there are three other choices available to digital predators – that is, CMOs at companies that want to shape trends, not follow them:
Crawl – The Coachella music festival went a step beyond providing an event app: they handed out thousands of cardboard VR headsets to attendees. Since festival-goers can't be everywhere at once, they can catch shows that happened on other stages, extending and rounding out the benefits of attendance. They recognized that consumers don't yet own their own VR devices, so they gave them out as part of the experience to deepen engagement.
Since Mobile World Congress, where the reality on the show floor was often either virtual or augmented, I’ve been thinking quite a bit about the practical uses of AR and VR – particularly in government and a smart city context. It’s not just all fun and games, is it?
The example of changing a roller coaster experience with new settings delivered via VR glasses is really cool. Yes, you can imagine repeating the ride to experience catapulting through medieval battle, flying through a tropical jungle, or bobsledding down alpine slopes. But the practical side of us – or at least me – wants to know what else there is. And, fortunately, I have a colleague who has already been thinking of these things.
A few months ago, I had the pleasure of collaborating with JP Gownder on a presentation for Forrester clients in Geneva. I presented on the ways to derive value from data and opportunities to leverage new insights service providers – clearly something top of mind for many of our clients. But alas JP’s presentation was much cooler, providing examples of how to derive real value from new technologies including AR and VR. Since then I’ve being thinking about how the two are related. And, in fact, they are.
April 12, 2016: The day Oculus updated its Rift shipment timeframe for customers. As has been widely reported, Oculus customers face widespread months-long delays in the deliveries of their virtual reality headset purchases. To add a personal anecdote, I ordered within the first 5 minutes of the pre-launch window (once the web site started working, which it didn’t at first), and my Rift shipment has been delayed from March 30th to “between May 9 and 19th,” assuming Oculus actually succeeds in meeting its new dates.
While my personal Rift delay is merely an annoyance, the botched launch has real repercussions for the VR ecosystem. Oculus’ delay:
Hurts developers of games and apps. The diversity and depth of the VR developer ecosystem is impressive. While many developers focus on games – logically enough, since that’s a key early adopter demographic – others offer applications ranging from clinical treatments for PTSD to collaboration in virtual spaces. The common denominator? None of these developers are making money if there are no headsets available. And while many apps can be ported to other platforms, Oculus has been the centerpiece of many developers’ high-end VR efforts.
Hurts media startups and innovations. Media, too, sees a potential loss. While some media companies go the route of the New York Times and focus on Google Cardboard phone-based VR, others are counting on developing truly immersive experiences that simulate presence. Studio Jaunt VR has an Oculus app that, again, won’t be addressable until customers receive their Rifts.
I quite like this provocative sausage dog picture because it forces marketers to think differently about responsive web design (RWD). More often than not, marketers scale content down to fit a smaller screen; because they then claim that they use RWD and have some mobile apps, they think they have checked the mobile box. In fact, RWD was by far the most common tactic that marketers were using or planning to use in 2015: Only 9% of marketers we surveyed are not planning to use it. When fully implemented, RWD can improve the user experience, but more often than not, it’s implemented as a quick fix to the problem of multiple screen sizes. It often prevents marketers from thinking about the need to contextualize offerings for different devices. Customers do not necessarily want the same content across all their screens. However, a scarily high percentage of marketers we surveyed — 47% — admit their mobile services are primarily a scaled-down version of their PC services. In short:
Marketers misuse mobile marketing tactics. B2C marketers often focus too much on piloting the latest mobile shiny objects and, unfortunately, do not invest enough in adapting to mobile experiences’ core touchpoints -- like email or search -- that most consumers use to engage with brands.
Use mobile to transform brand experiences. Too few marketers think of mobile as an opportunity to transform the brand experience. To really differentiate themselves, they should develop mobile-unique interactions delivering visible value with apps, messaging, and online-to-offline tactics.
After experiencing some of the most exhausting days in the life of a “mobile” analyst, I am back from Barcelona. Here are my key takeaways from the 2016 event.
MWC 2016's "Mobile Is Everything" theme summarizes two ideas: the disruptive power of ubiquitous mobile devices and their ability to connect things and objects in our surrounding environment. This year, innovation and key announcements did not so much come from new flagship smartphone manufacturers but instead focused on solutions that enable mobile devices to activate adjacent technologies — like VR, 360-degree cameras, 5G, and the IoT — to build the next generation of connected experiences. Let's cut through the hype to look at what the headlines really mean for B2C marketers:
VR is really still hype. Samsung massively surfed on the VR "wow" effect and heavily promoted its Gear VR headset while Facebook's CEO insisted that VR is the next-generation platfrom and will shape the future of social. After the distribution of five million of Google's Cardboard VR Viewers since June 2014, the buzz will continue with Oculus Rift and PlayStation VR (to be launched mid-March at the Game Developer Conference), creating awareness for digitally immersive experiences. But reach will be extremely limited, as the technology will only attract a niche set of users — especially gamers — in the first two years. However, marketers at retail, automotive, travel, or luxury real-estate companies with a digital innovation agenda should keep an eye for signs of VR adoption beyond the "techno-few."
Use mobile to unlock IoT consumer experiences. IoT remains first and foremost a B2B and industrial play. However, B2C marketers can combine mobile and IoT to activate new brand experiences.
From February 22 to 25, Barcelona will be the center of the business world. Do not expect a specific industry focus but expect announcements impacting any industry: from payments to automotive. Why? Because “mobile is everything”.
In November, Forrester released its mobile predictions for 2016, highlighting how mobile will act as a catalyst for business transformation and explaining why the battle for mobile moments will redefine the vendor landscape.
Let’s now take a closer look at how mobile will impact marketing in 2016.
A year ago, Forrester argued that most brands would underinvest in mobile in 2015. This is likely to remain the case this year, since too many marketers still have a narrow view of mobile as a “sub-digital” medium and channel. This is good news for the 20% of marketers who told us they have the budget they need and for the 33% who said they know how to measure mobile ROI. In 2016, this growing minority of leading marketers will start to fully integrate mobile into their marketing strategies. These mature mobile marketers will measure the impact of mobile across channels, see a clear opportunity to differentiate their brands, and increase their investments in mobile initiatives. Here’s what else we expect to happen:
Integrating mobile into your marketing strategy will become a key differentiator. While most brands are trying to mobilize their ads, few are going the extra mile: serving their customers in their mobile moments by transforming the entire customer experience. Only those that do go that extra mile will differentiate their brands via mobile. Leaders will also start measuring the impact of mobile on offline channels and will end up allocating up to 20% of their marketing budgets to mobile.
Presenting and hosting a panel on digital transformation at this year's CES gave me the opportunity to wander the 2 million square feet of exhibit space and assimilate some of the changes coming our way:
Welcome To The Age Of Invention. For me, the most exciting aspect of CES is the sheer volume of innovative, inventive startups that are tapping into the power of sensor-enabled technology to create new products and services. Many of these companies are funded through crowdfunding platforms like Kickstarter, gofundme and indiegogo. The pace of innovation will accelerate as high-school kids use their fertile imaginations to tap into the technology that’s now second nature to them.
The Internet Of Things Will Fuel Rapid Digital Transformation. Based on the sheer volume of internet connected devices coming on the market this year, we’re going to see an explosion in the Internet Of Things (IoT). Everything – from wearables that track everything from your health and fitness to the temperature of a newborn child, and in-home appliances that interconnect to create a home environment tailored to your preferences – everything is now designed with sensors that collect data that's used to deliver better customer outcomes. Or at least that’s the promise. Sensors can and will improve our lives – giving us more data and insight about our environment and allowing us to tailor experiences to be more finely tuned to our personal desires. The data provided by the sensors in the Internet Of Things is the fuel for further digital transformation.
AR and VR technologies aren't new. Virtual reality first experienced a boom of interest in the early 1990s, spurred by the 1991 book Virtual Reality by Howard Rheingold. In 1995, Angelina Jolie starred in the movie Hackers, which introduced mass audiences to head-mounted VR display technology. But the early promise of the technology fell apart due to underperforming graphics, attention-jarring lag times, outlandish hardware requirements, and the lack of an application ecosystem. No VR market emerged (outside of niche categories like military usage) until Facebook acquired the Kickstarter startup Oculus for $2 billion in March, 2014.