CDD Grain Feeder WP Oct16

WHAT’S THE IMPACT OF VIRTUAL REALITY ON BUSINESSES:

IMPLEMENTING VR INTO YOUR MARKETING STRATEGY.

CDD are keen advocates of innovation, and always try to keep up with the latest

industry trends and new technologies. We’ve been watching VR grow and evolve,

and wanted to share our passion for the subject with the wider audience. We’re

looking at the technology from the UX and usability perspective: waiting for when

VR becomes easy to learn, efficient to use and pleasant.

Marketing [email protected]

KAT TERLECKA

KAT TERLECKA | CDD WHAT’S THE IMPACT OF VIRTUAL REALITY ON BUSINESSES 2

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Many marketers believe that 2016 is the year of virtual reality. However, this is

not exactly accurate. Saying that 2016 is the year that people start talking about

virtual reality would be more appropriate.

The range and availability of VR headsets is indeed continuously growing and

improving, but the high cost of quality hardware is still making people hold off

from buying. We’ve seen a similar trend with TVs, mobile phones and other pieces

of technology. Consumers are waiting for the prices to go down, and as most of

them have not even had a chance to try on and test a headset, investing into one

may be seen as a bit risky and unnecessary (unless they’re into gaming, or are

those who need to have the latest gadgets first).

A lot of brands have already looked into allocating some of their marketing

budgets and efforts to VR and are producing new types of content. Some have

done really well and managed to generate a lot of interest and revenue, others not

so. The outcome was either unappealing, underdeveloped or affected by the poor

performance of the early headsets.

VR will become a big deal, but marketers have to carefully time and size their

investments. According to Raconteur, VR is going to be the biggest advancement

in technology since the smartphone. It will revolutionise the way people view and

interact with content, bringing experiences to life in a way that has never been

possible before.

VR is going to be the biggest advancement in technology since the smartphone. It will revolutionise the way people view and interact with content

Raconteur, 2015

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INTRODUCTION


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In this thought leadership piece you will be able to find more insights* about the

following aspects of virtual reality:

- Brief history and introduction to VR

- Types of headsets: how you can view VR content

- Impact of VR on businesses and industries

- Applications of VR

- The future of VR

- ROI in VR.

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*All information given in this document is based on the content of CDD’s Grain Feeder event that took place on the

11th of October 2016 and supported by internal and external research.


© Copyright CDD

Before we can talk about the various applications and future trends for VR we

need to cover the basics: What VR actually is and what’s its history?

Virtual reality can be defined as:

“A computer-generated environment that lets you experience a different reality.

A VR headset fits around your head and over your eyes, and visually separates

you from whatever space you’re physically occupying. Images are fed to your eyes

from two small lenses. Through VR you can virtually hike the Grand Canyon, tour

the Louvre, experience a movie as if you are part of it, and immerse yourself in a

video game without leaving your couch.” (CNET, 2016)

In other words, VR is an artificial environment, software created content is

demonstrated to the user in such a way that suspends belief and is accepted as a

real environment.

Let’s have a look at some key dates and events** to learn how the technology has

evolved:

HISTORY OF VIRTUAL REALITY

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1930s

1950s

1960s

1980s

1990s

Now

Pygmalion’s spectacles

- Stanley G. Weinbaum

explained a Goggle-

based game in which

individuals could

watch a holographic

recording of virtual

stories including touch

and smell

With the initial surge

after Oculus Rift,

companies all over

the world began

developing their own

VR headsets. With

so many new devices

coming out from

various world’s top

manufacturers, huge

developments around

apps, 360° cameras,

inexpensive headsets,

VR glass experiences

and more can be seen.

The Virtuality Group

launched a range of

arcade games and

machines. Players

would wear a set of VR

goggles and play on

gaming machines with

realtime, immersive

stereoscopic 3D

visuals

Virtual reality - the

name was born

The first VR Head

Mounted Display by

Morton Heilig;

Headsight – first

motion tracking HMD;

The Ultimate display

by Ivan Sutherland

Cinematographer

Morton Heilig

developed the

Sensorama that was an

arcade-style theatre

cabinet, which would

stimulate all the

senses, not just sight

and sound

The concept of virtual reality has been around for decades, even though the public

really only became aware of it in the early 1990s. The companies that currently

dominate the market are: Google, HTC, Samsung, Oculus and Sony. These are

sure to be followed by many other enterprises in the next few years, when the use

of VR headsets becomes more common.


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At the moment, there are four major options for viewing virtual reality content:

an immersive VR headset, a simple VR viewer which uses a mobile phone, a

smartphone on its own, or a web video player (“360” video format).

The best method to experience VR is with a headset, as it offers “look all around

you” 3D vision and “hear things behind you” stereo sound (Within, 2016).

A headset is the best method to experience VR as it offers “look all around you” 3D vision and “hear things behind you

Within, 2016

“

THE BEST VR HEADSETS INCLUDE:

- HTC VIVE

- OCULUS RIFT

- SAMSUNG GEAR VR

- SONY PLAYSTATION VR.

As of now, the HTC Vive is the most complete VR experience on the market. It

is built from the ground up for room-scale VR, which lets you physically move

around objects in the virtual space. The headset itself has two 1080p screens

which makes for a very crisp image. “The HTC Vive is an incredible gateway into a

new medium, one that is currently dominated by short demos and rough-around-

the-edges games, but should one day play host to full-length films, television

shows and contemporary art.” (TechRadar, 2016)

If you’re looking for a cost-effective option, you can get a simple Cardboard VR

viewer. The easiest and cheapest way to try virtual reality, Google Cardboard

is a piece of folded cardboard with some low cost embedded lenses. Cardboard

viewers work along with your smartphone and are available in a variety of styles

from a range of companies. Once you get a cardboard version all you have to do is

download some apps and individual videos and insert the phone into the viewer to

enjoy your first VR experience. It’s quick and easy.

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HOW YOU CAN VIEW & EXPERIENCE VR CONTENT


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H LISTICUSEREXPERIENCE

There is no doubt VR will have a major impact on businesses in the next few

years. The technology is already being used in a number of ways by the business

community:

- Virtual tours and meetings

- Staff interviewing and training

- Product or service development

- Improved prototyping

- Detecting design problems at an early stage.

Virtual reality will be particularly useful to companies that produce dangerous or

potentially harmful products which need to be evaluated before use.

The total number of active virtual reality users worldwide is forecast to reach 171

million by 2018 (Statista, 2016), which means that there is a lot of pressure on

businesses to consider implementing VR technology in order to stay relevant and

keep up with the requirements and interests of their future customer.

IMPACT OF VR ON BUSINESSESS


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Virtual reality is and will be revolutionising a wide range of industries and services

that brands provide. It’s a completely new medium whose true purpose is slowly

being discovered and realised.

APPLICATIONS OF VR

Visiting destinations without having to travel,

or seeing places before travelling to make sure

they meet the requirements; at the moment

the tourism industry is using the technology for

the more mundane purpose of showcasing the

real-world offerings, but that will evolve in the

next 5 years

TRAVEL & TOURISM

One of the most obvious applications these

days; it is giving game designers the freedom

to take games to incredible new places and

users the opportunity to get truly immersed

and touch things, and turn their head to look,

instead of mastering a complex controller

GAMING

VR enables large groups of students to

interact with each other as well as within a

three-dimensional environment; medicine,

chemistry, physics and astronomy would

be some of the main subjects to benefit

from the implementation of the technology;

VR simulations will offer practice runs at

techniques, designs and ideas

EDUCATION, SIMULATION & TRANING


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H LISTICUSEREXPERIENCE

The video has helped 56 million people gain a deeper understanding of autism.

That sometimes, autistic people can become overloaded by everything around

them. Which can make the outside world feel like a terrifying place. And for their

families, all the looks, judgements and tuts make it feel like a lonely and isolated

place.

CASE STUDY: EXPERIENCE TOO MUCH INFORMATION IN VIRTUAL REALITY

WATCH FOR YOURSELFTake a look at our award entry for the Dadi’s. The entry went on to win ‘Best Professional Website’YOUTUBE.COM/WATCH?v=Lr4_dOorquQ

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http://www.youtube.com/watch?v=Lr4_dOorquQ


© Copyright CDD

Sports events, live-streamed concerts and

theatrical performances are just some of the

experiences people can dive into through VR

headsets; new cameras are being created to

capture these VR stories, and tools to upload

and livestream them are growing in number

ENTERTAINMENT

Being able to tour a potential new property

from miles away, walking right through it as

if you were there; or walking into a virtual

clothing store with infinite shelf space, where

any shirt, blouse or pair of shoes can be seen

and tried on; shopping is never going to be the

same again

REAL ESTATE & SHOPPING

Being able to commute to work or attend

meetings by inhabiting a telepresence robot

with cameras mounted on its body; VR will save

individuals’ and companies’ time and money,

and help people be places almost instantly,

wherever they’re in the world.

TELECOMMUNICATIONS


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When it comes to the future of VR, there have been many speculations on what

the technology might bring us in the next 5 to 10 years. Given what we’ve seen

and experienced already, these are some pretty solid forecasts:

WHAT IS THE FUTURE FOR VR

The goal for the next generation of VR hardware is 4K or Ultra High

Definition (UHD).

The core technologies will shrink, leading to less bulky, more compact

headsets, potentially wire-free at some point.

VR headset manufacturers are driving both the development and distribution

of VR content by investing significant technical and monetary resources in

developers, in an effort to build up an exclusive content library.

Ads featured on VR headsets will likely have higher view-through rates than

standard video ad spots.

VR will become another media consumers use on a daily basis.

Ownership of VR headsets could rise more than threefold in just two years,

even before the predicted peak in 2021.

The revenue of virtual reality products is projected to reach $4.6 (£3.7) billion

in 2017 to more than $162 (£130) billion in 2020 (worldwide).

VR will take over and become gaming’s next big trend.

VR has the potential to out-monetise TV over the next decade.

Brands will be able to provide customised virtual experiences for consumers,

such as entertainment, travel and social interactions, as well as corporate

solutions.

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One of the biggest challenges of creating branded virtual reality campaigns is

justifying the value of them, cost of production, and calculating the ROI.

The benefits are not just monetary. Of course, the sales and the revenue increase

is extremely important. However, until VR platforms and headsets become more

widely used by the general public and become more utilitarian, the key is to focus

on projects that are aimed at delivering that “wow” effect.

Below is the list of major objectives businesses could achieve by implementing VR

technology for their marketing campaigns:

- Improved brand perception (existing customers) and enhanced brand

recognition (new audiences)

- Production of compelling VR content that will create instant emotions

and prompt users to share, like and comment on it

- Being perceived as creative, innovative and up to date with current

trends brand

- Creating personal connections with existing and new audiences.

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ROI IN VIRTUAL REALITY


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Virtual reality is definitely the next big thing. All reports, articles and opinion

pieces indicate that. Will the headsets and technology be commonly used by the

end of next year? Possibly. Will there be more content in 2017? Absolutely.

We hope this thought leadership piece has helped you to better understand the

definition, application and some future implications for virtual reality.

We’ve also put together a list of key takeaways from the paper:

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CONCLUSION & KEY TAKEAWAYS

VR is an artificial environment, created with software and demonstrated to the user in such a way that s/he suspends belief and accepts it as a real environment.

1

There are four major options for viewing virtual reality content: an immersive VR headset, a simple VR viewer which uses a mobile phone, a smartphone on its own, or a web video player (“360” video format).

2

The HTC Vive is the most complete VR experience on the market right now.3

VR can be applied across the whole range of different industries including travel and tourism, gaming, education, simulation and training, entertainment, real estate and shopping, and telecommunications.

4

VR will become another media consumers use on a daily basis with the revenue of virtual reality products projected to reach more than $162 (£130) billion in 2020 (worldwide).5

Main benefits of implementing VR into marketing strategies: improved brand perception and brand recognition, compelling content, being perceived as creative, innovative, and creating personal connections with existing and new audiences.

6

ABOUT CDD

We make digital experiences that solve business problems. We believe that

creativity is the answer to some of the big challenges in an organisation today.

We are a bunch of designers, developers, technologists and strategists delivering

meaningful business change through innovation and digital platforms.

As a design team, we are constantly striving to better our internal processes

and improve the way we collaborate with clients. We work on a rich variety of

projects, consequently there is no one size fits all approach to user experience

design and information architecture.

CDD

The Grain Store

Enterprise House,

Ocean Way,

Southampton

SO14 3XB

www.cddnation.com

Want to chat or need some assistance

with your digital project?

Feel free to give us a call or drop us an email

02380664747

[email protected]

Author

KAT TERLECKA

Kat is Marketing Manager at CDD, who joined the company

with an extensive experience in B2B environment,

previously working on both the client side and at a couple of

other marketing agencies on the south coast. She is also an

alumna of the University of Southampton, having graduated

with a MSc in Digital Marketing.

AR/VR Magazine (2016) The Value and ROI of Branded Virtual Reality Campaigns

(http://www.arvrmagazine.com/the-value-and-roi-of-branded-virtual-reality-

campaigns/), [1 Nov 2016].

CNET (2016) Virtual Reality 101 (https://www.cnet.com/special-reports/vr101/),

[1 Nov 2016].

Forbes (2016) How Virtual Reality Will Impact Businesses In The Next Five Years

(http://www.forbes.com/sites/forbestechcouncil/2016/07/22/how-virtual-

reality-will-impact-businesses-in-the-next-five-years/#34772fe82241), [1 Nov

2016].

Raconteur (2015) Virtual Reality (https://raconteur.uberflip.com/i/616458-

virtual-reality), [2 Nov 2016].

ReadWrite (2016) Virtual Reality Will Change Business as We Know It (http://

readwrite.com/2016/03/09/vr-changing-business/), [2 Nov 2016].

Sapphire Nation (2016) The Future of VR: from Virtual Reality Goggles to UHD

VR Glasses (http://sapphirenation.net/future-of-vr/), [1 Nov 2016].

Statista (2016) Number of Active Virtual Reality Users Worldwide from 2014 to

2018 (https://www.statista.com/statistics/426469/active-virtual-reality-users-

worldwide/), [1 Nov 2016].

TechRadar (2016) HTC Vive Review (http://www.techradar.com/reviews/

wearables/htc-vive-1286775/review), [1 Nov 2016].

The National Autistic Society (2016) Experience Too Much Information in Virtual

Reality (http://www.autism.org.uk/VR), [2 Nov 2016].

Virtual Reality Society (2016) History of Virtual Reality (http://www.vrs.org.uk/

virtual-reality/history.html), [1 Nov 2016].

Within (2016) How to Watch VR (http://with.in/how-to-watch-vr/), [1 Nov 2016].

REFERENCES

Documents

CDD Grain Feeder WP Oct16