Mobile ad spend could reach $100 billion worldwide next year, according to eMarketer. Yet despite all the money behind it, mobile advertising today is still in the dark ages.
When will mobile advertisers step up with something better than annoying and indecipherable banner ads?
Perhaps sooner than you think. Virtual reality (VR) and augmented reality (AR) tools that take advantage of a smartphone's built-in sensors are creating a new breed of interactive advertising. Advances in these technologies could lead to a new wave of mobile advertising, one that engages users similar to how mobile games and apps do—and we all know how much mobile users love their games and apps.
The difference between the two is this: VR is an immersion in a digital world while AR superimposes an image on a real world. Right now, most VR tools for smartphones require bulky headsets, like those by Oculus Rift and Valve's Steam VR. It is difficult to imagine wearing one of those in public, but some experts believe headsets will eventually become less obvious.
On the other hand, Nils Forsblom, CEO and founder of San Diego-based Adtile, thinks VR without the headsets has a place in mobile advertising today.
His company is working on "lightweight VR"—lightweight to distinguish it from the immersive VR people associate mostly with gaming. Users are able to access the Adtile VR world by simply extending an arm— selfie-like—and looking into their smartphone screen, which would depict an enhanced version of the object or space in front of them. Movements like tilting, pitching or walking in any direction reflect changes onscreen with minimal latency, allowing users to interact with this VR world in near real-time.
Lightweight VR has the potential to help people navigate complex spaces such as airports and sports stadiums or explore objects from all angles. "You might be able to look at a sculpture in a museum and appreciate it in ways that you never would have imagined with 2-D images," said Forsblom.
Forsblom believes that successful mobile advertising should take advantage of the technologies unique to mobile phones, like GPS, gyroscope, motion coprocessor, accelerometer and compasses While VR in mobile ads is still a new frontier, several brands have already tapped into AR to engage with their customers.
One example is IKEA's AR catalog. The Scandinavian retailer created a mobile phone app that lets shoppers visualize how certain pieces of furniture could look inside their home. The app even measures the size of the products against the surrounding room and fixtures to offer a true-to-life sizes.
Adtile's Motion Ads are already in use by several of the world's biggest brands. "You can think of it like a light-weight app that provides a clear value exchange for the user," said Forsblom. "A user interacts with an ad by twisting, tilting, rotating or otherwise playing with it." Motion Ads also support high-premium programmatic mobile advertising, making them easy to implement and scale.
The ads are clever and intuitive. One might ask users to tilt their phones to fill a virtual coffee cup with coffee. In another scenario, users might be instructed to shake their phones to blend a raspberry milkshake, for example. The ads then point the user to a nearby food spot where they can swipe a digital barcode to redeem the product they just created or a coupon.
Mobile ads that gamify content and encourage interaction are shown to have higher engagement rates. Adtile's Motion Ads have an average 30 percent engagement rate, 23 seconds of participation time and over 6 percent click-through rates—some of the highest rates in the online and mobile advertising industry.
Consumers are not a trapped audience. For mobile ads to grab people's attention, they need to fulfill a purpose and engage consumers in creative and entertaining ways. Interestingly enough, the necessary technology is already sitting inside our smartphones, waiting to be tapped.
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