‘va6r20%8 Virtual realty and augmented really ae the fulurs of digital advertising — Quartz QUARTZ AD-VR-TISING VR and AR will be the death of pop-up ads and pre-roll videos Jesse Damiani September 28, 2017 @ I can see the future—and it's not playing on pre-roll. (AP Photo/John Locher) Ever met somebody who professed an abiding love for pop-up ads? What about autoplay videos—the ones squirreled away in some undiscoverable corner of a website, singing jiggles at you while you scamper to find the pause button? Yeah, me neither. We live in times of great division, but when it comes to modern marketing techniques, we have no trouble finding consensus: They’re intrusive, creepy, hitps:il.com1089554ivitual-reality-anc-augmented-realy-are-the-{ture-oFdigta-advertsingl wr1126018 Virtual reality and augmented reality ar the flute of digital advertising — Quartz manipulative, and misleading. And advertisers know it. Banner ads, modals, prevideos, and scroll-throughs drive us up a wall—and our frustration is costing them billions each year. They’ve witnessed the persistent rise of ad blockers with dread (up 30% in 2016 alone, following similar rates year-over-year since 2014), and if the 36% drop in morale among ad-industry professionals in 2016 is any indication, they’re arguably more upset with the situation than the rest of us. So you may be pleased to hear that those strategies won’t survive the next decade: This non-sponsored message is brought to you by virtual reality (VR) and augmented reality (AR). Digital advertising is dying Online advertising’s death has been a long time coming. According to Arnaud Dazin, CEO of San Francisco-based ADVR, a pioneer in the immersive advertising landscape, VR and AR are just the nails in the coffin. “We've all seen the downward spiral in mobile and web advertising, where advertisers vie to pay as little as possible and reach the largest audience,” Dazin says. “Quality continues to suffer as campaigns driven by the barest metrics, such as clicks, partake in a race to the bottom.” This model specifically repels the advertisees most brands want to reach: Generation Y (millennials) and Generation Z, who comprise 46.4% of the total US market. The two generations exhibit different traits, but both value community, conversation, and authenticity. They hate being spoken down to and not being given a voice. Having grown up with an ever-increasing array of media channels, they especially hate undeserved impositions on their time and attention. A recent study titled “74% of digital natives tired of brands shouting at them” found that a majority of 16- to 39-year-olds stop using social networks where they feel like they’re just targets for advertising. “They want it to be a conversation, they want to engage,” Rob Tarkoff, president and CEO of Lithium Technologies (who sponsored the study), told SFGate. “It hips: com 1089554/vitual-reality-anc-augmented-realy-are-the-{ture-oFdigta-advertsingl on1126018 Virtual reality and augmented reality ar the flute of digital advertising — Quartz has to be a two-way interaction if brands want to succeed. It can’t be one way any longer.” The experience economy One strategy is finding success with consumers: experiential marketing, which positions audience members as active participants. Refinery29’s “29Rooms” event in Los Angeles, for instance, is a recurring “interactive funhouse of style, culture, and technology.” There’s no product for sale. Instead, the point is to facilitate a fun night out with friends that in turn encourages engagement with Refinery29. This year’s “Turn It Into Art” edition yielded positive brand association across social media to boot. An Inside Look at Refinery29's 29Rooms This approach checks all the boxes for success, particularly among the under-40 crowd: It’s shareable, participatory, and rooted in strong creative. It’s not just a subset of modern marketing—it’s the symbol of a fundamental shift in consumer psychology. So why don’t we see more of these campaigns popping up all over the place? hips: com 1089554/vitual-reality-anc-augmented-realy-are-the-{ture-oFdigta-advertsingl 37‘yasre018 Virtual realty and augmented really ae the fulurs of digital advertising — Quartz Julie Shumaker is VP of advertiser solutions at Unity Technologies, whose flagship game engine has been used to create more than two thirds of all immersive content on the planet. She explains that it’s a matter of scale: What makes experiential campaigns special also hampers their reach. “What historically has been meant by ‘experiential’ were these very low-reach, high-immersive experiences,” Shumaker says. “On a per-user basis, those have historically been some of the most powerful ad experiences; however, they have no efficiency, no scalability.” But that’s about to change. While immersive advertising has traditionally taken place offline—at launch events, in stores, and on the streets—new technologies have created a digital infrastructure that can place experiential marketing campaigns on our screens. “In digital form, this experiential marketing is deliverable at-scale, exactly as designed,” Dazin says. “If traditional programmatic advertising is moneyball, interactive immersive advertising is the Home Run Derby.” Mobile goes immersive Given the ubiquity of smartphones, one of the biggest ways we’ll see digital advertising revolutionize is through the augmented-reality capabilities of our phones. This is especially true given this year’s major AR developments from Facebook, Google, Apple and Snapchat. “AR represents the most addressable audience of any emerging platform that’s started out of the gate,” Shumaker says. “It’s really a game-changer in the consumer’s opportunity to engage in their real environment with the product or service.” IKEA’s ARKit app is an example of how this convergence will fundamentally change the interaction between consumers, brands, and media platforms. Customers can “try out” virtual furniture in their homes through placing them in rooms (or any public space) via their phone or tablet, and if they like how it complements the space, order on the spot. “It’s unimaginable how different this hips: com 1089554/vitual-reality-anc-augmented-realy-are-the-{ture-oFdigta-advertsingl an1126018 Virtual reality and augmented reality ar the flute of digital advertising — Quartz is—that you can actually see the piece of furniture in your house before you buy it, that you can engage with items and interact,” Shumaker says. @etscott Excuse me, I'm just laying out IKEA furniture on a subway platform #ARKit #iphone8plus 10:31 PM - Sep 19, 2017 tps: com 1089554/vituat-reality-anc-augmented-realy-are-the-{ture-oFdigta-advertsingl 57‘a6r2018 Virtual reality and augmented really ae the fulurs of digital advertising — Quartz 125 2,340 5,337 Campaigns like “Star Wars: Find the Force II” and “The Walking Dead Encounter” show how studios can use VR and AR to broaden the universes they've created and engage their brand community. Star Wars sent fans to special locations to “find” digital characters from The Last Jedi, complete with Star Destroyers looming high over global landmarks like the Golden Gate Bridge. The Walking Dead’s experience lets you collect AR zombies to create scenes with them directly from your phone. To maximize engagement, fans were further encouraged to “flesh out” their collections by tuning into The Walking Dead and waiting for select Mountain Dew TV spots that functioned as triggers to unlock exclusive zombies. Efforts like these offer users standalone, valuable experiences in hopes that it invites an ongoing relationship rather than trying to force the conversation. Over the past two years, this insight has been key to Unity, the world’s leading independent ad platform in the mobile sector. It took the leap into the immersive advertising space earlier this year by announcing its “Virtual Room,” a mini-app that lets developers integrate advertising content directly into their game or experience. For its pilot project, it partnered with Lionsgate to create a VR integration for Jigsaw, the latest installment of the Saw franchise. The experience lets players interact with objects and figure out how to save themselves from an untimely death, drawing them into the world of the film by making them participants in the story. “What we’ve been really trying to play with is doubling down on the things that can be entertainment,” says Agatha Bochenek, Unity’s head of VR/AR and mobile ad sales. “So, Jigsaw being a great example—it’s [not just] an ad: It’s a piece of entertainment in-and-of itself. The ad shouldn’t be boring. It shouldn’t just throw, ‘Buy Tickets’ in your face the whole time; it should make you feel what the movie feels like.” When consumers are happy, advertisers make money hips: com 1089554/vitual-reality-anc-augmented-realy-are-the-{ture-oFdigta-advertsingl 87‘yasre018 Virtual realty and augmented really ae the fulurs of digital advertising — Quartz Through immersive media, brands can offer mass experiences that invite participation in a way that minimizes intrusion. Advertisers will earn an audience’s trust by demonstrating an understanding of how to communicate with them—and that attention is a commodity to be earned, not taken. In the landscape that emerges, it won’t be uncommon for an “advertisement” to genuinely delight you more than traditional creative media. Just enter the matrix to find out more. You can follow Jesse on Twitter. Learn how to write for Quartz Ideas. 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