How will advertising evolve in VR?
In every phase of the Internet, advertising has played a major role.
With advertising, products can be free for customers, and network effects can form quickly. This dynamic will fuel a robust advertising ecosystem for virtual worlds as well.
So what will advertising look like in virtual worlds? Already we are seeing “posters” on the walls of virtual spaces, similar to billboards in the physical world. We’re also seeing companies create their own branded worlds — surely these will play an important role as well, but they will attract only a small portion of consumers’ attention, just as brand websites do.
Ultimately, brands will want to engage consumers immersively & natively within popular virtual worlds. And this will lead the ecosystem to product placement as a key advertising model.
With product placement, virtual worlds will have items from brands – such as furniture from Ikea, alcohol from Budweiser, drinks from Coca-cola, appliances from Stanley Black & Decker, toys from Hasbro, and so on. Virtual worlds will also feature wearables and experiential items from brands – such as a hang glider from Red Bull, a car from Tesla, or virtual shoes from Nike that make you jump higher.
We can expect virtual world platforms to create advertising networks within their platforms, just like Facebook’s ad network. Down the road, we can also expect that ad networks will emerge to serve virtual worlds on the open web.
Roblox is starting to experiment with advertising, CPO Manuel Bronstein told CNBC. Bronstein mentioned branded digital coffee cups, in addition to other ad formats — including digital billboards, portals to branded virtual worlds, and coupons for products in the physical world.
In our current era of search (Google) and social media (Facebook), sponsored search links and sponsored social posts have been the dominant ad formats. It’s a good bet that the winning ad formats of VR will also be “native” to the dominant platforms in the space.
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