Watch your wallets! Virtual reality will employ the shrewdest advertising techniques we’ve seen yet.

Tip: When you wear a VR headset, you will be a prime target for advertisers, as well as traditional pickpockets.

TL;DR…
• I bought a virtual headset, and although it’s not super compelling yet, I like that it’s relatively distraction free (as well as how cool it looks on my face).
• Once VR catches on, however, advertisers will flock to the platform.
• At term, advertising tactics will be more shrewd and irresistible than ever, because of how immersive and convincing virtual reality can be.
• You’ll end up even more targeted and distracted in virtual reality than you are across social and traditional media today.

So I bought a private lodge for $200 this week…

What my life needs, is less real life. That is, I suppose, what I thought when I broke down and bought a virtual reality headset — the Oculus Go. It was my first time trying a VR headset that wasn’t made of cardboard (i.e. Google Cardboard with the iPhone as an insert). Even though the graphics were pixelated, field of view relatively narrow, and colors mildly washed out, my breathing grew heavy when I looked up at the belly of a T-Rex standing in my path. Even though I began my first session with a critical eye for visual fidelity, the system quickly tapped into my lizard brain and I was hooked. In short, immersion is intense and extremely convincing.

What I liked best about my first virtual reality experience, though: No Distractions. In each app that I tried, I was free to explore the environment without advertisements, notifications, popups, sponsored posts, door-to-door salesmen, or Mormon missionaries crying for my attention. It walled off external distractions as well. If I had kids, they would have gone unfed for the two hours I spent in virtual space, or at least until one of them cracked me in the kneecap with a plastic golf club. I felt at ease strolling through a virtual forest in the NatureTrek app, as well as traveling to the Egyptian pyramids in the Wander app (a Google Earth simulator). I even spent an uninterrupted 21 minutes watching an episode of The Office from a private virtual lodge, nestled on a mountaintop and outfitted with a big screen TV, in the Netflix app. I don’t think I’ve ever watched a sitcom from start to finish without picking up my phone. With this newfound focus, the show was funnier than I remember, and I was more relaxed than I remember being in a long time. And this is why I’ll be so sad to see this distraction free environment go. And go it will.

My Prediction: Although immersive and distraction free now, virtual reality is doomed to be the most distraction-enabling technology we’ve seen yet.

It’s always been about attention

People have always craved attention. Literally the first and most crucial thing we learn to do when we come out of the womb is to howl for our parent’s attention — to get milk, fresh diapers, and pampering. Attracting attention has always been, and always will be, the first step in getting what we want: A sale from a customer, a smile from a pretty girl, a drink from a bartender, a miracle from God (“We pray to the Lord: Lord, hear our prayer”), etc. The war for attention is nothing new, despite many pundits decrying that “We now live in an attention economy!”. It’s misleading, because we’ve always lived in an attention economy, and we always will. The difference is that, today, the need for attention has become magnified, and hence more ruthless, for two reasons:

1) Attention has become more sparse because there are more people and entities vying for it. More photos, more videos, more experts, more products, more data, and generally more people who want to — and, with electronic distribution becoming commoditized, are able to — get in your ear. So the front line of the war for customers has shifted from building a better product to being better at convincing people you have a better product (obviously the companies that have a mixture of both will be the most successful, like Apple and Tesla).

2) Attention has become much more closely tied to customer conversion, because targeted advertising is able to attract the right kind of attention. So, attention is much more valuable these days because the distance between your attention and your credit card is much shorter. Advertisers used to be left hoping that their scattershot message (on a billboard, on TV) would reach someone who cared, and also that that someone would remember their phone number or product next time they were in a situation to place an order. Today, an ad can hit the right demographic with American Sniper precision, and a sale is only a click-of-the-trigger-finger away.

Virtual Reality is not exempt. It’s another platform that will be used to get your attention.

Virtual reality isn’t some magical land where your attention is not valuable. It isn’t some hippy commune where everyone is left alone to grow their own potatoes and groom their dreadlocked beards. This is a platform driven by industry titans like Facebook, Sony, and HTC, and they are all out for blood. So, why then, am I left to my own devices for uninterrupted hours on end on my Oculus Go?

VR is not good enough… yet.

Here’s a unwritten fundamental law of physics:

When something is compelling, people flock.
When people flock, advertisers swoop.

This is what happened with sponsored posts on Facebook, with commercials on television before that, with display ads in newspapers before that, with town criers in cities before that, with papyrus leaflets in ancient Egypt before that, and with a snake peddling ripe, red, non-GMO apples in the Garden of Eden before any of that. Facebook, TV, newspapers, cities, papyrus, and snakes (?) all became compelling — that is to say they had a powerful and irresistible effect. What’s more, each was more immersive than the technology that came before it, because each tickled our senses and emotions to a greater degree. Virtual reality is the most immersive platform yet and has the power to really engage us on a sensory and emotional level, so what gives?

Virtual reality, while certainly promising, is not ready for primetime. The headsets that offer the most impressive experience are laden with wires and require a >$1000 PC to power it (e.g. the Oculus Rift); and the headsets that offer the most user friendly experience are still held back by relatively weak displays, inadequate battery life, and a lack of ergonomic comfort (e.g. the Oculus Go, which I bought). It’s selling fine, but it’s still a niche product. There isn’t a truly compelling reason to power through the high cost, the eye-straining graphics, or the strap-inducing headaches because…

There are no killer virtual reality apps, at least for the masses.

In either case, there is not a compelling use case for virtual reality yet. The majority of apps that exist today still feel like they are sample-sized — something that you’d pull out of a cereal box. The app library that I’ve browsed on the Oculus Go is comprised short videos, games with a single level, and quick-hit experiences like walking through the woods or diving in the ocean; they are interesting, but they are novelties. There are few apps that would tangibly improve the public’s lives, outside of a few quick minutes of entertainment.

There are, however, glimmers of genius in the Oculus app store. What really piqued my interest were social and travel applications. Social apps like Oculus Rooms, VRChat, and AltspaceVR allow users to create avatars and hang out with friends or like-minded strangers in virtual space. You can play board games together, watch movies together, explore new environments together, and attend concerts and standup specials together (with real, live performances, nonetheless). This is the most convincing virtual hangout that the world has seen yet, and remain so until virtual reality’s step-brothers, augmented reality and holographic telepresence, are born. Social interactions in virtual reality will only get better as avatar likeness, body language, and facial expression graduate to higher fidelity.

The travel applications were also compelling. Who wasn’t impressed when Google Earth first came out in 2001, allowing internet-ites to crawl a virtual globe from their home office, exploring the Eiffel Tower or the Great Wall on a whim? The WanderVR app reboots that feeling by offering the same virtual travel experience, but with hyper-immersion. By simply voicing “Buckingham Palace”, your dreams of stalking Meghan Markle nearly come true. For a moment it really does feel like you’re there because the images are high quality and the headset tracks head movement perfectly. After a minute, though, you begin to notice the flatness and stasis of the world, like you’re staring at the walls inside of a beachball. Over time, however, our 3D models of global locations will get better, and so our VR travel experiences will gain the much needed parallax and depth effects we are used to in real life.

So, while the technology still has a way to go in terms of enhancing the graphics and streamlining the user experience, what’s really holding it back at this point is the lack of a compelling applications. Even if the graphics were near lifelike and the headset was as comfortable as a Kangol hat (i.e. comfortable but still dumb-looking), I still think users would be left asking, “Now what do I do with it?”

Advertisers haven’t realized the best way to ‘trick’ us yet in virtual reality.

It didn’t take much brainpower for advertisers to devise the format of ads on the internet, on TV, and in newspapers. The internet allowed for words and pictures, so that’s what they plastered around the edges of websites as ads. The TV allowed for audio and video, so that’s what advertisers shot and spliced into popular shows. The advertising solution on Facebook was perhaps a bit trickier, or at least more novel. Static banners that were popular on blogs would be too conspicuous in a Facebook user’s newsfeed, so instead sponsored posts were created, which looked like the posts of friends, and could even be liked; shared; and commented on in kind. The added power (and ensuing controversy) of Facebook’s sponsored posts is how they can use profile and usage data to hyper-target individuals. Facebook, like other advertising networks, has woven ads into their platform in a way that was natural and not too jarring for the user.

Virtual reality is another beast entirely. It’s very hard to create seamless, coherent experience in VR, because we carry our experience of the real world into the virtual world. The best virtual experiences will be both immersive and coherent. Immersion, in this context, means feeling like you’re in a certain environment because the sensory data you are receiving (video, audio, etc.) is telling you so. Coherence means that the scenario occurring in front of you is plausible and you are convinced that it is actually occurring. Between immersion and coherence, coherence is much more fragile. This is because with immersion, our senses are able to adjust fairly quickly to new stimuli (consider how quickly a white noise machine fades into the background). We are very attuned, however, to things that don’t make sense or stick out from the norm. This is what makes the uncanny valley such a real and tricky nut to crack. We expect a robot or CGI character that looks very real to act equally as real, and when it doesn’t we get creeped out. By the way, it works the other way around for a cartoon characters who act and talk hyper-realistically, like Chucky, for example. Basically, anything that is situationally jarring will violate cohesion principles, and will take us out of the experience. Ads popping up out of nowhere will do just that.

Enter the soul-sucking, advertising chatbots

So what are advertisers going to do if they can’t flash sponsored banners, ads, posts, etc. across the virtual sky (thus violating cohesion principles)? The most effective thing they can do, in my opinion, is to leverage what virtual reality does best — interaction with environments and people. The craftiest, most seamless way they can do this is with targeted product and service placement within virtual environments. This may be akin to what movies already when the lead actor cracks a cold Heineken with the label facing the camera all too perfectly. Except, in virtual reality, we’ll run past 3D vending machines that we can one-click order from, calling an Amazon drone to our doorstep. We’ll encounter avatars wearing the cuuuutest pair of Jimmy Choo shoes that we are just dying to own, and we’ll be able to buy them off right off their feet. Or perhaps they’ll lead us to a full Jimmy Choo outlet where we can further shop ’til we drop. Still other avatars will approach to tell us they they just saved 10% on car insurance, and that we can too! This form of VR advertising will be particularly prevalent once chatbots become more convincing. When this happens, reasonably well-scripted Geico, Jimmy Choo, and Heineken bots will be able to answer any questions you may have on their product, and then help you place an order.

I envision this constant bombardment to happen on an VR app or environment that is free to use or play — similar to freemium games and free websites today. It may not be as “in your face” as I’m making it sound, with avatars bum-rushing you through your every step, because that would be off-putting. Smart advertisers will entice you to come talk to their chatbots. Imagine attending a concert in virtual space, and to the side of the stage is a raucous party that catches your attention, so you decide to check it out. When you get there you realize that you’re amid 50 Heineken-sponsored chatbots who have had their personalities turned up to 11 (and their conversation about as vapid as any shot girl you’ve encountered at a real bar). Perhaps the commotion of this party adds to the experience of being at a wild concert, or perhaps it is just a big distraction. The point is, advertising in virtual reality can be cleverly disguised because interactions can be made very similar to real life. But unlike real life, advertisers will be able to instantly deploy digital shopping centers, casinos, conventions, etc. in your path that are perfectly tailored to your interests — designed to demolish your real world credit limits.

So, get in while the getting’s good. Virtual reality may not be good enough yet, but it sure is a breath of fresh air to explore a digital environment without being mired in offers and notifications. Or, if you really want to escape, you can go take a walk in the “real” woods like I’m about to, because my head hurts… from wearing this headset for too long.