Tara Johnson’s recent blog talks about Google’s new approach to virtual reality advertisements. Although still not a fully developed product, this technology could be foreseen to lead advertisers into a whole new era of advertising, where potential consumers not only see the picture/video on flat surface, but instead encounter a more intimate experience with 3D visualization.

I think this technology offers a very innovative advertising technique that could really solve the bottleneck that advertisement has stepped into—where consumers become indifferent to the bombarding of information and advertisement everywhere in their life and thus the companies’ inputs into advertisements, although sometimes very costly, receive less and less payoffs.

This diminishing effectiveness of advertisements also corresponds to the change in the consumer decision journey from a one way, marketer TO consumer conversation, to a two way, active consumer AND marketer interaction. VR advertisements targets exactly this active evaluation phase of the new consumer decision journey; not only is it more interesting, attracting more potential customers to even view the advertisements, it’s also more direct and intimate, giving customers more accurate information that help them to make decisions.

VR ads could be less suitable for smaller companies since they are more costly; however, for larger companies that are able to spend time and money into developing the technology, the VR advertisement may bring back some very positive results.

For example, recently I read that Ikea plans to experiment with selling furniture on third-party online platforms like Amazon to raise sales. From 2012, Ikea has witnessed an increase to visits to its own website by over 20%, yet online sales still only accounts for 4% of its total revenue. I think this is because many people simply like to see the furniture through their own eyes

in store before they decide to purchase. Although Ikea has a software that helps shoppers to “see” the furniture displayed, the visualization is essentially still a picture. A VR application can actually help customers to ‘experience’ displaying the furniture in their rooms in 3D and potentially raise Ikea’s sales on ecommerce. Selling through third-way parties means a sharing of Ikea’s profit margin, and in that case it could be an alternative to spend that portion into developing VR technologies to achieve more profit in the long term.

After all, according to Tara, the VR advertisement still has to follow the most important rule—not making the ads forced or intrusive that they stimulate negative response from users. However, if companies handle the technology carefully and let users feel that they are in control, VR advertisement could indeed become an innovative advertising tool that provides convenience and accuracy for consumers and meanwhile raise sales and revenues for companies.

 

 

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