VR: Publisher-Advertiser Relationship, KPIs, & more

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Eric John is the Senior Director in Mobile and Video at IAB. He is also co-author of the report, “Is Virtual the New Reality?: A Market Snapshot of VR Publishing and Monetization.”

We recently talked with Eric about the report. Highlights included:

  • How, exactly, is VR defined?
  • What’s the publisher-advertiser relationship?
  • What will measurement look like?

Chris Riback: What is VR? I mean, I was surprised to see that there’s not even definite agreement within the industry around the term. What would you characterize as the consensus definition?

Eric John: Well, you know, the consensus is the thing that you hope to see after a couple of years of a medium evolution. I think what we’re starting to see is a couple of flavors of VR emerging and this is what we highlighted in our report. There’s what you could call 360 video which is pretty immersive experiences that are shot with a 360 camera and are available in platforms like YouTube and Facebook et cetera, that some people would say is VR and some people would say is lacking the immersive aspects of a truly multi sensory VR experience, but it’s a space, 360 video is a space that advertises are really attracted to right now because there’s much more scale there than in the more immersive experiences, and those immersive experiences can take the form of apps that you can actually manipulate the content, move through a space in real time and are often available through tethered headsets, through PC based experiences.

There are these two I wouldn’t call lower end, but emerging, more easily created and scalable form which is 360 video and then these more immersive app based experiences that you view through a headset, and that can either be through a mobile device or a PC based experience.

CR: Why do you say more scale in the first one? What drives that insight?

EJ: Well, you know, the hardware requirements for a 360 video, you can do 360 in your desktop, by going to YouTube and simply searching for 360 video content, and you’ll see 360 video that you move around through by pointing and clicking your mouse or your arrow keys on your desktop. You can also view that content just through your mobile device and through the gyroscope of the device, see the experience and move in a 360 manner through these videos. The technology requirements are really, if you have a smartphone, you can look at this stuff. If you have a desktop, you can see these initial forms of VR, and so that’s where the audience is amassing, but we expect to see more and more deeper immersive experiences including full scale room experiences where you’re holding controllers and actually moving through space.

That’ll begin to catch on as well, as more and more hardware manufacturers are shipping and lowing the costs of these more immersive experiences.

CR: Yeah, you can certainly see where that would be … Just like any technology, you can start it at one level but very quickly, and particularly with the way developers are moving and the speed, and really in addition, I would think the opportunities for both publishers and advertisers, the immersive experience particularly around mobile has to be one real growth area. Is that right?

EJ: Yeah, exactly. Mobile is where you’re starting to see the scale, because if you have a smartphone, you can do VR today. That’s certainly where the audience is going to amass most quickly and now even just this month of October, we’ve seen releases of Google’s Daydream headset and new smartphone that they call “Pixel” that is another entry into the space. You’ve got Samsung Gear VR, which you can take a Samsung Galaxy phone and pop into the Gear VR headset, you can now take your Google Pixel phone which is available in stores and pop that into the Daydream viewer, and your VR ready, right then.

Publisher-Advertiser Relationship

CR: Talk to me about the relationship then between publishers and advertisers. I mean, I don’t care what medium we’re talking about, you can go back to magazines, you can probably go back to the beginning of the printing press. There’s always interaction and a relationship between publishers and advertisers and around how content gets created. Talk to me about particularly, though, within VR and as VR becomes the immersive VR, how does that relationship between those two groups work? How do you see it evolving and particularly around the creation of content?

EJ: Well, a lot of our publishers and advertisers, they’re really experimenting right now. They’re using different tools and technologies to figure out what works and what doesn’t. Most are shooting in 360 with a variety of rigs that can include a multi-camera approach where you have to stitch the content together and then others are working with even simpler solutions like a two-eye Fisheye camera that let’s you go out, shoot a story or shoot an ad experience and turn that around very quickly. The cost of that is much lower, so we’re seeing a lot of experimentation around that and figuring out what the right story to tell is. The interesting thing, I think, and we’re starting to see more and more experimentation in this is what’s the right way to present an advertiser message within a really immersive focused media experience like this?

What we heard universally with all the advertisers and the ad tech players that we spoke to is you really have to be protective of the user in the headset because they’re closed, it’s a really immersive experience. You’re literally closed off from the world, you can’t throw some jarring ad that doesn’t make sense in the context of what they’re experiencing, so we’re seeing a couple of different models of advertising experimentation in this. In some cases, it’s a sponsored content model where the entire app is brought to by a manufacturer, like manufacturer watches like TAG Heuer or it might be Hilton Hotels presenting their travel log that features their beach resorts, or it could be an experience like you might have an ad for Post cereals that would live inside of another content experience and so you might be experiencing a game, and then after one play of the game, that app experience would present an ad by something that makes sense in the context of that experience.

Then, you’d experience that 360 ad and then go back to the previous content experience, but the notion of interstitial or popup or some of the things that you see in advertising where an ad takes over the experience, universally everyone said you want to avoid that just because it can really be a turnoff to the user.

Measurements & KPIs

CR: On the point of success and measuring success, what does it look like? What does success look like? Let’s run through the audiences, if you would please, for me. When you think about key performance indicators, KPIs for publishers and then for advertisers, what are we looking at?

EJ: Well, if you are a publisher, you are looking at, first of all, the metrics, these are early days in terms of measurement. We know for both publishers and advertisers, you can measure basic things around the content and how many people are viewing, how many people are downloading an app. There’s analytics that allow you to see how long they’re spending with the content or the ad experience, so for publishers, they’re looking at metrics like the retention of the viewer, the engagement of the viewer, the number of people who are coming back again and again, and so those are all classic content engagement and content loyalty kind of measures, but then for advertisers, they’re also looking at the level of attention that they can gain with the consumer, so they’re looking at number of unique viewers, they’re looking at the completion rate and the average time spent for a viewer of their ad.

Then of course, you can expect that they’re going to back into an effective CPM and CPA. You can actually view an ad and then you can put a call to action at the end of that ad and get people to agree to receive follow up communications or fill out a form, and that kind of thing. It’s a little bit cumbersome, you have to take off the headset and fill out the form with your hand if you’re using mobile VR, but that’s going to be happening and you can expect as people, in the same way they use Amazon, you might have an authenticated account for the way you view VR and then those kind of eCommerce and shopping things will happen much more seamlessly.

The other thing that’s happening is this was a few of the companies that we spoke to who are talking to the advertisers that are executing on these different campaigns and what they’re doing is developing what’s called a “heat map.” You can actually see where the user’s gaze is, and how long the user’s spending with the brand that’s integrated into the app experience or the 360 experience. These are companies like Immersive and Retinad and StartApp. These are all ad tech companies that are developing these heat maps that segment out what the user experience is and what the ad experience is, and so they can speak to the brand and tell them how long their message was seen. You can start to see where these metrics are heading.

CR: That’s a fascinating way to approach it. I mean, tracking the gaze and tracking how long one is viewing a certain aspect or a part of the screen or a certain part of the experience, that sounds pretty much like the future has arrived. What about standards? When digital video came out, of course standards was a major issue and for a long time there was no agreement, and yet all these various attempts to become the industry standard. What about VR? Do you see standards coming there? Is it too soon? Not soon enough? Talk to me about VR standards.

EJ: Well, advertisers that we spoke to, they’re anxious to see VR scale as quickly as possible and for it to become easier to create and deploy advertising in these different experiences and so it’s important that their be guidance and so I think it may be a little too early for standards yet because it’s really a sandbox that everyone is playing in and trying to understand. There’s not really a lot of data yet on how people are consuming these different experiences but IAB has assembled some initial guidance for virtual reality ads and 360 video ads. It’s available on IAB.com in our “Flex Ads Portfolio” that we’re actually getting comments on today. If you’re in the ad tech or publishing or advertising space, you can take a look at what those formats are beginning to look like.

I expect down the road, we’re going to see research that tells us how people are consuming this content and what it means from a brand perspective. The measurements will begin to coalesce and at that point, I think we’ll be starting to talk standards, but I think it’s pretty early days still but the good news is that there’s analytics that can tell you directionally what’s happening.

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