Virtual reality: should brands be first to the punch or is it better to wait and (virtually) see?

There has been a lot of talk and hype about virtual reality in recent times. And just in the past month we’ve had a few sets of cardboard virtual reality goggles sent to the office from PR companies, which shows it’s very much in the public consciousness. One brand, which jumped onto the VR trend early in a marketing capacity, is Contiki. We had a chat to Contiki’s global CEO Casper Urhammer to find out more about the travel brand’s use of it. PLUS: with the amount of research and development going into virtual reality, is it better to wait?

Contiki has been luring travellers by giving them the ability to truly envision a travel adventure with the use of the technology. 

Earlier in the year Contiki’s global video director Ben Gattegno ventured out to the U.S. to shoot a number of iconic destinations in 360-degree video. The minute-long video features a Contiki trip manager introducing the ‘traveller’s’ trip and then snippets of the Grand Canyon, Yosemite National Park, Times Square New York, Las Vegas and the Golden Gate Bridge, San Francisco. Another video has since been shot in Italy, called ‘Cliff Diving’.

Contiki NZ owns two pairs which it keeps in its Auckland office and recently partnered with Samsung to loan more headsets when needed to immerse prospective travellers in a virtual reality experience.

“The use of virtual reality is intended as a way of giving our travellers a sneak peak into what it would be like being on a Contiki tour,” says Urhammer, who was in New Zealand recently discussing Contiki’s use of the technology at lectures at AUT and Auckland University. “We want to give people an opportunity to escape reality for a moment. Give people a little bit of holiday.”

Contiki global CEO Casper Urhammer

He says the purpose other than giving people a sneak peak is also a way for Contiki to connect with its 18-35-year-old demographic, which live and breathe digital. “And that’s where they are and we need to talk to them in a format that is engaging and on par with how they expect to be communicated with from a trend-setting, cool youth brand.”

Contiki got onto virtual reality a couple of months ago, he says, but had been considering using the technology for a while. “We were sitting here in Geneva and I had the presidents and managing directors of the regions [for Contiki]here for a marketing meeting and we were having a little bit of a brainstorming session. And we watched a music video where a guy orders a package online and he gets this crazy headset that takes him on a virtual reality journey. So we thought, what if we can recreate this for our travelling tenders to show how great it would be on a Contiki.”

He says if he was to give his prediction on the future of travel shows and travel technology over the next two or three years we would see a lot more of virtual reality. “I’m glad we got a chance to be first movers. I expect a lot more from this in the travel industry. I’m just glad we got a chance to jump on it as the first ones.”

Urhammer with students at Auckland University

Though Contiki’s use of virtual reality has been met with wide interest, it’s hard to measure whether it’s increased the number of people travelling with Contiki so far, he says.

“Well, it’s really hard for us to track because we don’t know if who buys the trip has tried it. But our sales are just through the roof right now. We are up so many percentages that we can hardly believe it. We have to look at the numbers on a daily basis.”

It’s about having a good product and strong marketing, he says. “But it certainly has an impact. I’d like to say that VR makes a difference but I cannot prove it, but it’s part of the bigger picture.”

He says Contiki will continue to use the technology. “It’s a given when you see that a youth brand can use it to their advantage and we’ll benefit from that. We will keep producing content … I would love to see one [a video]in Japan and some in Eastern Europe and some in Latin America. All these various places that we go to, we’ll aim to film content and give people a little sneak peak.”

We have experience, we know how to use it well, he says. “We know which strategies work. We were one of the early movers on content led marketing as well and socially driven marketing. We need to do what GoPro and YouTube are doing. We are the GoPro and YouTube of the travel industry. If we want to keep innovating in this space we have to keep doing what we’re doing. We have strong digital and marketing teams so we are well positioned to take the lead on these things.”

But with so much research and development going into the product, is it worth getting on-board early? That’s not to say it’s not worth it for Contiki. It seems a clever move for a brand targeting technologically-savvy youth, to virtually take them to an amazing destination at the time of their lives where travel is near the top of the list. But, there’s an old saying that it’s better to be second at something. As then you see how others do it and learn from what works well and what doesn’t.

According to Adweek virtual reality is creating a lot of excitement but it’s not bringing in the dollars at this stage. Top brands like Mountain Dew, Volvo and Jim Beam have dabbled with it in recent months to generate excitement, but production costs are high.

72andSunny’s director of production Tom Dunlap says: “You’re now considering producing in a 360-degree environment, so it increases your post-production costs exponentially,” he says. “I would venture to say that it’s more expensive than television commercials.”

Mike Rubenstein, vp of integrated solutions at Hill Holliday, who has done VR work for Merrell, agreed that it is difficult to justify the steep cost, especially as headsets like Samsung Gear retail for $200 and others aren’t even available to consumers.

“It’s a bit of a gamble, and you are making something of an investment in the creation of this content, which is not second nature to most on the agency or the production side,” he said. “You kind of need to go all-in at this point to make it worthwhile.”

Then there’s the fact that Facebook purchased virtual reality technology Oculus Rift for $2 billion last year, and with the amount of money Facebook it has behind it (over $200 billion) it can afford to do some pretty amazing things. Facebook wants to change communication altogether, not just revolutionise the gaming world.

It’s already setting up the framework for VR on its platform, with its recent introduction of 360-degree video capability, which it’s added to its newsfeeds. And while it’s announcement for 360-degree video didn’t mention Oculus Rift, we’d imagine soon enough it’ll be commonplace to watch these videos on a virtual reality headset when the technology becomes more widespread.

Publishers that are using the 360-degree video on Facebook so far are Star Wars, Discovery, GoPro, LeBron James & Uninterrupted, NBC’s Saturday Night Live, and VICE.

As Facebook’s announcement said: “In the future, imagine watching 360 videos of a friend’s vacation to a small village in France or a festival in Brazil — you’ll be able to look around and experience it as if you were there. Along with updates from your friends and family, you will also be able to discover amazing new content on Facebook from media companies, organisations, and individual creators … It’s early days, but we’re excited about the possibilities for 360 video and hope it helps people explore the world in new, immersive ways.”

As Cramer mentions, Facebook is looking at virtual reality technology as the future of communication. “Imagine walking around your Facebook feed, virtually interacting with pictures, videos, and connections as if you were part of the stories and conversations.”

According to Vanity Fair Facebook will begin shipping the Oculus Rift to customers early next year, it will cost around US$1,500 for the device and the computer you need to run it. Though there is the cheaper Oculus $299 facemask out which can be used with Samsung cell phones and can be purchased from stores like Noel Leeming.

Sony and Microsoft are also preparing to release their own headsets in the next year.

So, while the technology is predicted to be huge, and these massive companies are investing billions into the technology, it does seems it’ll be a while before it hits the mainstream, at least in its purest form where it’s a fully immersive experience rather than the amazing-but-not-quite-there feel of the cheaper head sets.

In the meantime though, anyone (or brand) can have a go with Google’s simplistic unpatented version, Google Cardboard, which brands have been making the most of. It combines mobile phones and the act of folding to create inexpensive virtual reality goggles.

Kellogg’s and shopper marketing and digital activation agency Geometry Global NZ have taken inspiration from this technology and, in what it says is a first for the New Zealand grocery market, turned a box of Nutri-Grain into a virtual reality experience

Kellogg’s says purchasing an online cardboard VR Goggle viewer can cost up to $30 (and there are plenty of different designs available via Google). But this one is all included on the limited-edition box and ready to be created with a pair of scissors, a butter knife and some tape (while the Nutri-Grain headsets aren’t Google Cardboard, Kellogg’s says its team have been in contact with Google during the development phase to produce the Nutri-Grain versions). 

Users who download the Bolt app on iOS or Android, scan the QR code on the front of the box and stick their phone in the cardboard headset get three VR experiences: wing suit flying, mountain biking and long boarding. 

So, though this technology is creating a lot of hype, it would seem it’s not hugely lucrative as a marketing tool at this stage. There’s still a way to go before it hits the mainstream, is affordable and is fully embraced by brands and consumers alike. But with BI Intelligence forecasting that the virtual reality market will be worth US$2.8 billion (NZ $3.8 billion) by 2020 and social media juggernauts like Facebook getting behind the technology, we expect to see some amazing things eventually. Watch this space.

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