Coming out of Cannes last month, the conversation has turned to the next evolution of ad formats. We know that consumer attention has shifted to OTT, smartphones and tablets. This rapid sea change means that the ad experiences now must change to meet higher consumer expectations.
It’s more important than simply delivering shorter video or pouring more money into one type of unit. It’s how consumers will truly discover, interact and transact with brands. Over the long-term, only innovation will enable advertisers to meet evolving customer expectations and demand. At Cannes, ad format innovation—specifically extended reality (XR)—was a critical topic of discussion. But what will this look like?
Augmented reality is now very real
Augmented reality is growing at a rapid pace. According to projections from ARtillry, AR revenue will reach a staggering $14 billion in 2021, up from $975 million in 2016. This boom, which can be attributed to its high interactivity and demand, presents an opportunity for marketers. What’s more, the software has become increasingly accessible for advertisers, allowing creative, meaningful experiences with a lower barrier to entry.
What makes AR so attractive for brands is that people can access the advanced video content through devices they already own. Consumer engagement with AR takes place largely on mobile devices but also on VR hardware devices or video game consoles. So it pays for advertisers to follow new AR developments to figure out the best ways to use this technology in their ad campaigns.
Programmatic VR is on the rise
According to Nielsen, about 25 percent of people between the ages of 18 and 54 used VR technology last year. Consumers are driving increased demand for this fully immersive video format. In fact, Ericsson ConsumerLab predicts that one-third of consumers around the world will use VR by 2020. At present, consumers are most interested in using VR for entertainment, virtual tourism, science and nature footage and virtual shopping. As VR becomes more accessible and advanced, there will be even more use cases.
With all the excitement surrounding VR, advertisers are seeing the ways they can benefit. VR encourages hands-on, immersive interactions that lead to strong brand-customer relationships. Advertisers also use VR to showcase their products or services to people across the globe who might not be able to see it in person. These are just two benefits; as the technology becomes more sophisticated and programmatic VR opportunities emerge, there are more ways for advertisers to use VR to their advantage and that of consumers.
The 3D and 360-degree video ad opportunities
Over the past few years, 360-degree video has seen exponential growth and 3D ad formats are now hot on the scene. This ad experience allows the user to become fully engrossed and provides an interactive experience. Also, let’s face it: 3D ads are cool and make it easy for consumers to explore products from every angle. They offer a fun experience, plus help consumers make an informed purchase decision.
Looking ahead, 3D ads have only scratched the surface of their potential as well as the impact they can have on consumers. This is why brands like LG, Three, Chevrolet and Peugeot have already jumped on the opportunity to extend reality and engage with their consumers in unique ways. They’re starting to see the value of investing in it and how it can play a role in future advertising strategies.
Moving forward, AR, VR, 3D and 360-degree video will lead the way, opening exciting new opportunities for an increasing number of advertisers brave enough to embrace them as crucial change agents.