Only 8% of Brands Intend to Use Virtual Reality for Advertising – AdAge.com

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Reality appears to be catching up with virtual reality.

A report released Wednesday by Forrester Research said 42% of U.S. online adults have never heard about VR headsets and that an additional 46% said they don't see a use for VR in their lives.

Meanwhile, a separate report by marketing services outfit Yes Lifecycle Marketing says only 8% of marketers are curerntly using VR in their advertising. Thirty-five percent of those surveyed said they either have no intentions or have reservations about using the tech, while 57% said it does not apply to them.

"There is much more hype than substance when it comes to using VR specifically for marketing," said Samantha Merlivat, an analyst at Forrester Research. "A lot of brands have tried VR in the last year, and in many cases, it left marketers and consumers rather underwhelmed."

The resistance by brands toward flashier tactics like VR underscores the notion that advertisers are being more pragmatic about their efforts to improve their marketing. According to the Yes Lifecyle Marketing report, marketers are still using tried-and-true methods like social (68%) and video (56%).

"In the past year, it has been very difficult to find a brand that has made a compelling use for VR," Ms. Merlivat said. "Planning your brand story around a three-minute video in terms of consumer experience is not something I would call compelling. Brands need to find a use that makes sense, whether it is entertainment, utility or social that goes beyond what they are doing at the moment."

A movie that's experienced in VR, where the plot changes based on where the viewer goes, might provide the type of spark needed for average consumers to turn their attention to the devices, Ms. Merlivat said.

Other obstacles include consumers who first experience VR with smartphones rather than high-end devices like HTC's Vive or the Oculus Rift. "There is lag, it is very pixelated," Ms. Merlivat said regarding smartphone VR experiences. "The consumer isn't going to want to invest in a $500 headset. That is going to hurt adoption of high end VR devices."

According to Deutsche Bank, there were about 22.5 million mobile VR users worldwide in 2016, up from nearly 6.5 million the previous year. By 2020, the investment bank projects more than 154 million people will use mobile VR at least once per year, but only 3.2% of them will be daily active users.

But in the long run, that may change.

Although the Forrester report is hesistant about VR's use cases short term, it is significantly more optimistic about its long-term implications. Brands who are at the forefront of the technology will be far more prepared when VR reaches scale. "And when it does, it will be very transformative for the brand," Ms. Merlivat said.

"There are brands who want to do VR because everyone is doing it," Ms. Merlivat said. "But in the long term, it will be widely adopted by consumers. And once it hits a certain scale, it will make things more interesting for everybody."

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Only 8% of Brands Intend to Use Virtual Reality for Advertising - AdAge.com