Virtual Reality Advertisements Get in Your Face

I’m sitting in a desk chair in an office in Mountain View, California. But with a virtual-reality headset strapped to my head and headphones over my ears, it looks and sounds like I’m standing in the belly of a blimp, flying high above silent city blocks dotted with billboards for a Despicable Me theme-park ride.

The blimp ride is part of a demo built by MediaSpike, a startup that’s making ads for virtual reality. Even the blimp itself is an ad: before boarding it, I can see its exterior is covered with a larger-than-life version of one of the film’s short, yellow characters.

For now, augmented reality and virtual reality are not widely used. But as new headsets hit the market, advertisers will surely try to stake out virtual ground.

Companies like Facebook-owned Oculus VR, Sony, Microsoft, and Magic Leap are working on consumer-geared hardware, some of which is slated to begin selling late this year. Already, Oculus VR and Samsung have released the Gear VR, a $199 developer-geared headset that lets you experience 3-D games and videos by inserting a Samsung smartphone into the device.

MediaSpike is among several companies aiming to serve brands that want to advertise on these new platforms. Founder and CEO Blake Commagere says the company started out a few years ago working to bring sponsored content to smartphone- and tablet-based games. Now the company is thinking about how billboards, videos, and other kinds of product placement can fit into the computer-generated worlds viewed on devices like the Gear VR, as well as on headsets that don’t yet have a firm release date.

From inside the headgear, it still looks pretty primitive. Before the blimp ride, I was driving around MediaSpike’s digitally rendered town, which is empty of activity beyond the movie billboards, blimp, and a giant display in a vacant town square that’s showing the trailer for the upcoming Minions film. I found it nauseating, too (a common complaint from people using stereoscopic 3-D technologies because of the disconnect between your visual and physical senses). But it’s still a heck of a lot more interesting than the banner and pop-up ads we’re used to seeing on websites and mobile apps.

The huge value of the online advertising market suggests it could be lucrative to experiment in this area. According to Magna Global, a media market researcher and investor, digital media revenue rose 17 percent in 2014 to $142 billion. It’s expected to climb another 15 percent to $163 billion globally this year.

Dallas-based Airvirtise certainly hopes advertisers will be willing to try to reach people inside virtual scenes. It’s working on virtual 3-D models that are integrated with real-world locations, which it discerns from longitude, latitude, and elevation—think a giant Angry Birds game in a park or a life-size virtual car you can walk around. These things would initially be viewable through smartphone apps and eventually through the lenses of augmented-reality eyewear.

Founder and CEO Kevin Hart describes what the company has been showing off at the SXSW festival this week: a computer-generated drone seemingly hovering in the air about 20 feet away, with a banner flying below it, visible only when viewed through the camera lens of an iPad. As you move closer to the virtual drone, he says, it will get appropriately larger by taking into account motion sensors on the iPad to determine your location and position, allowing you to walk under and around it.

A company that has already had some success merging virtual ads with the real world is Blippar. A smartphone app created by the company can be used to view sponsored augmented-reality content, such as virtual footballers on Pepsi cans, or virtual nail polish shades from Maybelline.

There will be plenty of challenges ahead for companies working to bring ads to virtual and augmented reality. Beyond the obvious difficulty of working with emerging technologies, Hart and others must figure out what kinds of ads users will respond to, and which they might find too overwhelming or obnoxious.

Commagere acknowledges that, as with product placement in movies, it will be possible to overdo it with virtual products. (One example of this occurred during my blimp ride, when I turned around to see a pixelated can of Pepsi perched next to the craft’s control panel.) But he’s hopeful that this will feel less intrusive than conventional pop-ups and other types of distracting Web ads.

“I can’t imagine having a banner at the bottom of a VR screen the entire time,” he says. “That would be infuriating.”