Driven By Video And Mobile, US Digital Ad Revenue Exceeded $100B In 2018

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Digital advertising revenues reached a historic high of $107.5 billion in the US last year, according to the Interactive Advertising Bureau (IAB) and PwC US. This growth is attributed to the direct brand economy, brand storytelling through video and a narrowing gap between mobile usage and mobile advertising spend.

IAB presented its 2018 Internet Advertising Revenue Report on Tuesday, pointing out that full-year digital revenues grew 22 percent YoY and surpassed $100 billion for the first time. Digital usage is up 20 percent YoY, IAB observed, even though the digital audience only grew one percent YoY.

Among all formats, digital video experienced the highest growth in advertising revenue, jumping 37 percent YoY to $16.3 billion. Digital video on mobile devices reached $10.2 billion in 2018, an increase of 65 percent. In fact, more than half—63 percent—of digital video ad revenue was on mobile devices.

Mobile ad revenue accounted for 65 percent of 2018 internet ad revenues, growing 40 percent YoY to $69.9 billion. The gap between mobile time spent and mobile ad revenue closed from 14 percent in 2017 to eight percent in 2018.

“Mobile revenues continue to benefit from advancements in single-click eCommerce, creative ad formats and placements on social media sites,” said IAB in the report.

Social media revenue rose to $28.9 billion in 2018, an increase of 31 percent from $22.1 billion in the previous year. The company defines “social media” as advertising delivered on social platforms including social networking, social gaming websites and apps across desktop, laptop, smartphones and tablets.

“Consumers, especially Gen Z, are adopting social stories at warp speed, while, at this rate, we approach a future where social stories may surpass social feeds in becoming the prevalent way consumers engage with advertisements on social media,” says IAB.

IAB does not break down social media ad revenue by platform but notes that the 2018 report includes Snapchat for the first time.

“Social media sites tend to foster consumer interaction and during a time when capturing the attention of the consumer is so critical, it is no coincidence we are seeing social media drive revenue,” says the report. “Ripe with various formats primed to take advantage of future technologies, revenue derived from advertisements on social media sites is expected to continue to grow in the future.”

Overall, marketers are pouring more budgets into the internet than any other platform. Print media, however, was the only category to experience a drop in advertising market share. Newspaper ad revenue dropped 6.9 percent while magazines dropped 2.1 percent.

Digital audio advertising revenue grew 22.9 percent in 2018 and reached $2.3 billion compared to $1.8 billion the previous year. IAB will release a dedicated digital audio report later this year.

Nielsen: OOH News Audiences Tend To Be Affluent, Well-Educated

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During election time, out of home (OOH) news viewers tend to be in their 30s, affluent and educated, according to a new study by Nielsen. These audiences stay informed on the go and often catch the news when they are not alone.

“Affluent and Educated” explores the news viewing habits of US adults that speak English, Spanish or both. The report is a compilation and comparison of data obtained through a number of recent surveys among the general population and Hispanic viewers.

“For marketers, these findings offer the unique opportunity to market to a set of consumers that is well informed, open to receiving marketing messages, and often hard to reach,” says Nielsen.

Nielsen found that among the general population, viewers who watch news outside of their homes average 38 years old and a household income of $73,000. Nearly half of the general population in this group said they had a college or graduate degree. Hispanic respondents were slightly younger, averaging 33, and reported an average household income of $54,000. Forty percent reported a college or graduate degree.

Overall, OOH news viewers were evenly split between male and females over the age of 18. Young Hispanic viewers between the ages of 18-24 skewed female at 70 percent.

Linear TV is the most popular method of catching up on news of the day outside of one’s own home. Among the general population, the most popular place to do so is at someone else’s home, followed by a restaurant or bar, at work and at a gym/fitness center. Among the Hispanic group, respondents preferred a restaurant or bar over someone else’s home.

Just over a third (38 percent) of the general population reported watching the news at work in the previous week and 17 percent said they watched on the move, such as in a taxi. Almost a quarter (22 percent) stayed up to date while in a hotel room and 13 percent did so at the airport.

A November survey found that viewers who watched news outside of their homes and on cable networks did so to watch political news more than any other category. This was true among both the general population and Hispanic groups. Both groups watched politics, general news, sports news, international updates and financial news at similar rates within the previous week.

“In today’s 24/7 news landscape, consumers have a plethora of programming and platforms to choose from,” Nielsen says alongside its findings. “Even amid the debates about ways to parse fact from fiction, Americans continue to watch the news to stay up-to-date in an era of mass information and accessibility.”

Verizon’s Yahoo-Centric NewFronts Presentation Leans On Tech, Original Content

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Verizon Media hosted its 2019 NewFronts presentation for advertisers on Tuesday that leaned heavily on original content, Yahoo platforms and emerging technology, especially AR/VR and 5G.

Verizon is taking full advantage of its 2017 $4.48 billion Yahoo acquisition with a new slate of programming across several platforms.

“We’re more focused than ever on ​transforming powerful intentions into real connections, performance and quality through data insights and content, deepening the connection between brands and consumers,” said K. Guru Gowrappan, Verizon Media CEO.

Stories, Shopping And Sound Bytes

Yahoo Play currently has over 20 original series on its platform and over 10 series in development including Room of Doom and Beat the Street: Los Angeles.

A new 5G-enabled series called Hypezilla is coming to the Yahoo Play app that features weekly products and consumer technology. Augmented reality integration allows users to preview featured items and make purchases inside the app. Hypezilla will be produced by Verizon Media’s ​RYOT 5G Studio in Los Angeles, the first 5G-enabled content studio in Hollywood.

Yahoo Finance will debut a new series called My Three Cents, on which host Jen Rogers will interview influencers, athletes and celebrities about money. This summer, Yahoo Finance will launch three new podcasts—Ballots and Dollars, The Art of the Exit and Illegal Tender.

Verizon Media expanded its DSP audio inventory through a ​global integration with private audio marketplace AdsWizz. The platform draws audio inventory from Pandora, iHeartRadio and other publishers. This integration is an extension of Verizon Media’s programmatic audio inventory that launched in 2018, which allows users to buy, manage, and measure audio inventory alongside display, video and native programmatic campaigns.

Actress and activist Julianne Moore presented advertisers with a documentary called 5B, which tells the story of the first AIDS/HIV care unit in the US. Verizon Media will distribute and support the film’s world premiere, citing investment in “prolific storytelling that impacts communities around the world.”

Fantasy Football And ‘Experiential Reality’

New York Jets quarterback ​Sam Darnold and Yahoo Sports Fantasy Football expert Liz Loza took the stage to announce that for the first time, Yahoo Sports is extending NFL streaming rights to the Yahoo Fantasy Football app.

Mobile and tablet users will be able to watch all local and primetime 2019-2020 season games free and unauthenticated in the Yahoo Fantasy Football app, the Yahoo Sports app and other Verizon and NFL media properties.

For journalists, Verizon introduced a new Yahoo News XR Partner program that grants access to the RYOT 5G studio and the company’s 5G Labs. The company has already partnered with USA Today​, ​Reuters, The Associated Press, TIME and ​NowThis to produce interactive news content for viewers.

“Through the Yahoo News XR Partner Program, we want to accelerate the development of extended reality content from our trusted news partners and offer our audiences the best-in-class next-generation journalism,” said Alex Wallace, general manager of news, entertainment and studios at Verizon Media​.

Partners will also be given access to “new forms” of XR media inventory for advertisers, some of which were demonstrated at Cannes Lions 2018. The company also recently announced programmatic VR offerings and mobile AR ads.

Spotify Targets Auto Advertisers With Oracle Data Cloud Partnership

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Spotify has announced a collaborating with Oracle Data Cloud that will offer custom audience building tools for auto advertisers. Recent data suggests that Spotify users purchase new vehicles at a higher rate than non-listeners.

Auto advertisers can now build custom audiences of potential car buyers across the US using Oracle Data Cloud’s solutions alongside Spotify’s streaming intelligence tools. The collaboration is designed to reach desired listeners at the appropriate segment and stage of the car buying cycle, then measure how those audiences purchased a vehicle.

Ford has already begun utilizing the service, Spotify says, using niche Polk Audiences powered by Oracle from IHS Markit’s automotive dataset.

Spotify cites recent data from Polk Measurement at IHS Markit, indicating that Spotify users purchased new vehicles at a 26 percent higher rate than the national average of car buyers in 2018. In addition, the study found that Spotify users purchased 38 percent more Entry/Economy/Compact vehicles and 24 percent more luxury SUVs than the national average.

“Oracle Data Cloud can help auto advertisers identify and reach the ideal audiences on Spotify,” said Patrick Thomas, Oracle Data Cloud’s head of partner management for consumer platforms in the announcement.

“Beyond audiences, Oracle Data Cloud also helps auto advertisers close the loop by measuring the result of their campaigns back to sales using Polk Measurement from IHS Markit, so they can analyze and improve their campaigns and get even more Spotify listeners on the road again.”

The Spotify-Oracle Data Cloud collaboration won’t be limited to automotive categories. Audience and measurement tools are available for brands across a variety of verticals including retail and CPG.

Spotify is emphasizing the importance of data-driven advertising by offering new tools aimed at a myriad of potential industries.

Earlier this month, Spotify Ad Studio unveiled a new set of streaming conversion metrics that reveal how listeners responded after listening to an ad. The addition was made in response to labels and artist teams who requested more insights into how a campaign impacted consumers.

New metrics available inside Spotify Ad Studio include how many listeners listened to the artist after hearing the ad, whether the ad performed better with existing listeners or new ones, songs saved to playlists and more.

Spotify ended 2018 with 96 million paying subscribers globally, a 25 million increase year over year. For the fourth quarter, Spotify posted its first-ever quarterly operating profit of €94 million ($105.5 million) and closed out 2018 with €5.26 billion ($119 billion) in revenue, up 28.6 percent from 2017.

Q1 Spend Trends In Latest Digital Marketing Spending Report

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Paid search spending slowed for the fifth straight quarter ending Q1 2019, while organic and social traffic held steady, according to Merkle. Google and Amazon’s investments in Shopping Ads paid off, Facebook saw an unusual decline and DuckDuckGo shows organic promise on mobile.

Marketing agency Merkle released its digital marketing report for the first quarter of 2019, using samples of its own clients operating in the North American region.

Shopping Ads Rise To The Occasion

Google spend growth slowed to 16 percent year over year (YoY), showing a decline in cost per click (CPC) but growing in terms of clicks themselves. Clicks have grown since the second quarter of 2018, driven by Google Shopping. Merkle’s clients spent 40 percent more YoY on Google Shopping ads in the first quarter.

Client spending on Showcase Shopping Ads grew from three percent of Shopping clicks in Q1 2018 to eight percent in Q1 2019 for participating advertisers. Google Shopping Ads appear to be cannibalizing its own text ad revenue, the agency observed, as the tech giant prioritizes shopping placement. Text ad spending declined 12 percent YoY.

Paid search spend declined three percent YoY across Bing and Yahoo. In March, Yahoo began drawing exclusively from Bing’s ad inventory. The report notes that the Search Network, with which Google served ads on Yahoo, accounted for only six percent of Google Shopping traffic, indicating a “relatively minor” impact going forward. Bing, however, may see a boost in second-quarter traffic as a result of the transition.

Marketers are pouring more money into becoming a Sponsored Brand or to highlight Sponsored Products on Amazon, Merkle noted. Sponsored Products accounted for 85 percent of all Amazon spend, while spending on Sponsored Brands (formerly Headline Search Ads) was “roughly steady” in Q1.

Google Is King Of Organic Reach . . . For Now

In terms of organic reach, Google continues to dominate visit share, but DuckDuckGo is showing a lot of promise. The search engine saw visits increase 54 percent overall and 78 percent on mobile—not an easy feat considering that Google is the default search browser on most mobile devices.

Paid social spend growth continues to outpace that of traditional display advertising, growing 24 percent YoY compared to 12 percent for display advertising.

Instagram saw the largest visit growth at 114 percent and saw a 44 percent increase in ad spend during the first quarter. Excluding Instagram revenue, Facebook spend growth dipped into negative territory for the first time since Merkle began generating its quarterly reports.

Website visits attributed to social media accounted for over four percent of all site traffic in Q1 and five percent of all mobile visits, both new highs for this report.

Instagram and Facebook topped paid social investments for the quarter among a larger group of advertisers, but Pinterest budgets proved “meaningful” relative to what brands spend on Facebook.

“The pool of brands that are active on Pinterest is significantly smaller than that of Facebook or Instagram, as the use cases of the platform are typically isolated to retailers and because Pinterest campaign management tools are still coming together,” noted Merkle in the report. “However, for those brands that are active on Pinterest, the median advertiser spent more on Pinterest than on Facebook proper in Q1 2019, and garnered significantly more impressions at a lower CPM.”

Mobile App Fraud Increases YoY As Marketers Pour Ad Dollars Into The Platform

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Mobile app fraud continues to rise as advertisers pour billions of ad spend into the platform. Marketing measurement provider DoubleVerify found that from 2017 to 2018, fraud has been rampant in the form of sophisticated invalid traffic impressions and applications.

DoubleVerify identifies and screens common types of mobile app fraud that includes background ad activity, hidden ads, app misrepresentation aka spoofing and measurement manipulation.

All those scans revealed that fraudsters have kept themselves incredibly busy over the last few years. DoubleVerify’s Fraud Lab found that the total number of fraudulent apps has increased by 159 percent from 2017 to 2018, according to figures made available to AList.

Mobile app sophisticated invalid traffic (SIVT) impressions have doubled year-on-year since 2017, DoubleVerify added.

Just over half—57 percent—of fraudulent mobile apps are categorized as “Games” and “Tools & Utilities,” the company found, adding that its fraud tool detected 1.6x more fraudulent apps in 2018 than in the previous year.

“With ad spend increasingly concentrated in mobile – and particularly mobile app, fraudsters are redoubling their efforts to take advantage,” said Roy Rosenfeld, head of DoubleVerify’s Fraud Lab in a prepared statement. “It’s critical that brands understand these risks, in order to allocate spend accordingly and install appropriate safeguards for their digital investments.”

BuzzfeedNews released the findings of a similar mobile app fraud investigation on Thursday, in which several popular Android apps use invasive permissions and dubious code to commit ad fraud. Apps that ranged from children’s reading programs to flashlights and remote controls were found to commit ad fraud while collecting huge amounts of user data.

According to a 2017 report by Singular, 63 percent of marketers don’t use any mobile fraud prevention techniques at all, becoming easy prey for even the most easily preventable attacks.

US marketers will spend an estimated $87 billion on mobile advertising in 2019, according to eMarker, which will account for more than two-thirds of overall US digital ad spend. Outpacing TV for the first time in 2018, mobile ad spend is expected to reach $201 billion in spend globally by 2021.

That being said, it’s no wonder that marketers and fraudsters alike have honed in on mobile. A recent report by Scalarr suggests that marketers will lose nearly $13 billion to mobile app install fraud in 2019. This estimated loss is a significant increase from $7.3 billion in 2018.

In November, the IAB Technology Laboratory released app-ads.txt, a mobile extension of its fraud prevention tool, for beta testing and commentary. Earlier in 2018, The Trustworthy Accountability Group (TAG) added a requirement that all publishers implement the ads.txt standard if they want to become TAG Certified Against Ad Fraud.

Breaker Seeks Artists, Audiences To Partake In Blockchain Entertainment

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Blockchain entertainment company Breaker has spent the last several years building a platform “by artists for artists” and is ready to seek an audience. Formerly SingularDTV, the company rebranded in January and is currently in beta with a library of 210 films, 46 music albums and new content being uploaded on a daily basis.

Attracting talent and distributors hasn’t posed a problem thanks to the platform’s transparency and real-time payments. Traditionally, artists would upload their works on a platform and wait patiently for their royalties. On Breaker, artists are paid immediately each time a purchase is made, using blockchain.

The marketing team helped gain exposure for Breaker by attending tentpole events like Cannes Film Festival and hosting blockchain entertainment panels at SXSW. In addition, the company has taken festival marketing a step further by creating one of their own.

The inaugural Screenbreaker festival, held in partnership with Screen International, will commence in NYC April 26-27, followed by Los Angeles and Hong Kong later this year.

Thus far, Breaker has penned deals with independent film distributors FilmRise (My Friend Dahmer), Oscilloscope Laboratories (Combat Obscura), Dread via Epic Pictures Releasing (Book of Monsters), Vertical Entertainment (Gotti) and Comedy Dynamics (Jim Gaffigan: Noble Ape). The company is also in the process of negotiating deals with A24 (Hereditary) and others.

“Since our launch on Jan 31, we have had over 6,000 downloads which we consider a win given that we are in beta [and] only have a desktop app,” Breaker’s senior vice president of marketing Kerry Fitzmaurice told AList, adding that a decentralized app will launch by year’s end.

As Breaker comes out of beta, the marketing team will continue to identify its audience beyond the creators and distributors themselves.

“As a brand, we’re designed to actually appeal to both [creators and consumers],” Fitzmaurice commented. “Since we are in beta, our approach to consumer engagement is to test and learn.”

Fitzmaurice places a high emphasis on transparency and Breaker promises never to sell data to third parties. That being said, the marketing team doesn’t have the luxury of boycotting data-hungry sites like Facebook just yet.

“Since we are a new brand in an overcrowded space we need to tell our story where there are people to listen,” said Fitzmaurice. “So, we are leveraging the ad units and suite of tools offered by Facebook and Google so that we can find and reach our people. We are also looking into expanding our relationship with more like-minded brands like [open source browser] Brave.

“Obviously, we will move the bulk of our media spend to mobile and increase spend,” added Fitzmaurice. “While we are in beta, we are being thoughtful about our spend because we want to test and learn what is work, what messages are resonating, who our audience is and what they want.”

Blockchain entertainment may become the way of the future, but that doesn’t make marketing Breaker any easier. Innovative or not, Breaker found that consumers are more interested in the content itself.

“Through market research, we know that entertainment consumers don’t necessarily care about the ability to use crypto [currency] or that our backend is built on blockchain,” said Fitzmaurice, noting that 40 percent of users have paid using cryptocurrency. “We hope our secondary message of championing artists with transparent real-time accounting, sharing key data and protecting IP resonates with artists—but our number one message is that we have rich independent content on the platform that you won’t necessarily find easily anywhere else.”

That’s not to say that consumers aren’t being entertained by the idea of blockchain. Breaker released a documentary called Trust Machine: the Story of Blockchain that is designed to educate and inspire. The film was directed by documentary filmmaker Alex Web (Downloaded, Deep Web) and narrated by actress and activist Rosario Dawson (Daredevil).

“I think that our documentary is resonating because people are curious about blockchain and this film helps our audience understand why our proposition matters,” Fitzmaurice observed. “The entertainment industry was not designed with the artist in mind. Trust Machine is our tool to educate people across film, entertainment and even test how we go to market. The film has been extremely well received, which tells us there is a tremendous thirst for information on blockchain technology.”

The global blockchain technology market is expected to reach $7.59 billion by 2024, according to Grand View Research, Inc. The technology is being explored for a myriad of uses from non-profit organizations and banking to fighting programmatic advertising fraud.

Puma AR App Hypes LQD Cell Sneakers With Camera Effects, Games

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Puma is promoting its new LQD Cell Open Air sneaker in augmented reality (AR) with a mobile app that scans the shoe and unlocks games as well as photo and video effects.

Limited-edition LQD Cell (pronounced “liquid cell”) sneakers launched April 4 with a silhouette covered in QR codes.

Consumers can download a special mobile app and scan the shoe inside a Puma store to unlock AR effects, such as one that makes the shoe appear to be on fire or see a 3D exploded model to see what’s inside.

Contrary to what one would expect of a shoe covered in QR codes, the AR app recognizes the shoe through machine learning instead of scanning the codes themselves.

Users can also scan the silhouette to unlock “LQDASH,” an augmented reality running game. The game challenges a user’s agility for the chance to win a pair of LQD Cell shoes. Owning the shoes is not required to play.

Additional AR filters will be released this year, such as turning the shoes invisible, or a camera filter made to look like a surveillance feed will arrive alongside future shoe releases.

Puma’s AR app does not host an ecommerce feature, requiring consumers to seek out the real shoes elsewhere.

The global athletic footwear market size is expected to reach $95.14 billion by 2025, according to Grand View Research. Limited-edition kicks tap into consumer’s fear of missing out (FOMO) but also make it more difficult to experience them before it’s too late.

Marketers are making this process easier by using mobile augmented reality apps and other emerging tech to reach consumers who thrive on sneaker culture.

“The sneaker aficionado space right now is interesting and exciting,” Allison Giorgio, Puma’s vice president of brand marketing told AList in a 2018 interview. “We’re trying to figure out how do we move at the speed of culture that signals trends, innovate faster and release products quicker. Our mission is to be the fastest sport’s brand in the world, and we take that to heart from a development and marketing side.”

Puma is using a mix of emerging technology and influencer marketing to capture a young, digitally-savvy demographic. The brand’s partnership with singer and actress Selena Gomez resulted in more than 7.5 million interaction, helping Puma become one of the top-mentioned brands on Instagram in 2018.

In December, Adidas launched a Snapchat lens that allowed users to virtually try on its Ultraboost 19 running shoe before its release date.

Through its SNKRS Stash app, Nike uses exclusive geo-located experiences to offer digital “shock drops” where users can purchase the shoes in Berlin, Chicago, New York and Los Angeles. Nike used the app to allow virtual try-ons of its Momofuku sneakers before they dropped in 2017.

ANA, IAB Form ‘Privacy for America’ Coalition, Propose National Data Laws

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Privacy for America is a new coalition founded by trade organizations 4A’s, ANA, IAB and NAI intended to create strict privacy protections for US consumers. The coalition seeks national law that protects consumers, creates a new division of the FTC and strictly punishes companies that breach or misuse personal data.

In the coming weeks, the coalition will meet with members of Congress, the FTC, Department of Commerce, the White House and others to present a national law based on Privacy for America’s paradigm.

If Privacy for America has its way, a new national law would make personal data less vulnerable to breach or misuse. Should it approved through government channels, the coalition’s paradigm would set forth clear, enforceable and nationwide consumer privacy protections for the first time in the US.

“Americans must not be forced to choose between protecting their privacy and enjoying the many benefits they have all come to expect from the advertising-supported Internet, mobile and other media,” said Bob Liodice, CEO of ANA in a statement.

“And they deserve to expect and have the same tough privacy protections no matter where they live in the US.”

The proposed paradigm would impose significant restrictions on data use for advertising. For example, it would ban certain types of data from being collected and used for advertising, limit the purposes for which advertising data may be used and allowing consumers to identify their preferences regarding what advertising they do or do not wish to receive.

Strong data security protection would be required and enforced to guard against data breaches. Privacy for America wants to create a new Federal Trade Commission (FTC) Data Protection Bureau that would strengthen the FTC’s ability to oversee consumer privacy and enforcement.

“Companies should adhere to well-defined policies that distinguish between legal data practices that benefit consumers, and illegal ones that make their personal information vulnerable,” said Randall Rothenberg, CEO of IAB.

“Companies that don’t follow the protections should be held accountable with strict penalties. Supply chain safety should be as mandatory in the digital media and advertising industry as it is in the auto or food industry.”

The paradigm also includes the prohibition of specific data practices including discrimination and sharing with third parties without enforceable contracts.

“The Privacy for America coalition’s approach will ensure responsible data practices and accountability, particularly throughout the advertising industry, which will restore consumer trust in the ecosystem,” said Leigh Freund, president and CEO of NAI.

Privacy for America is being advised by data privacy experts including Stuart Ingis, co-Chair of Venable LLP’s eCommerce, Privacy, and Cybersecurity Group and Jessica Rich, former director of the FTC’s Bureau of Consumer Protection.

In a poll commissioned by Privacy for America, 92 percent of registered voters said it was important for Congress to pass new legislation to protect consumer data and 65 percent of voters said that new legislation is very important. When asked how such privacy laws should be passed, 63 percent believed the most effective route would be through the federal government, compared to 17 percent that said individual states would pass their own.

Branded AR/VR Success Greatly Hindered By Discoverability

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Immersive augmented reality (AR) or virtual reality (VR) content can deepen consumers’ connections with brands but discoverability, ease of use and successful execution remain a challenge, says Magid.

According to Magid’s new “Immersive Tech Ancillary Content Study,” not all AR/VR experiences are treated the same. Consumers turn to VR for emotional experiences, for example, while AR is better suited to everyday integration.

Magid conducted six, two-hour focus groups—three in NYC and three in LA. Participants consisted of a mix of men and women between the ages of 18-45, and half of each group owned a VR device. All participants had downloaded or used an AR app on their phone in the previous six months and were open to future experiences.

Each of the groups was shown a number of branded VR and AR content that was considered ancillary—that is, designed to enhance one’s view of an existing product. Experiences included

Oxygen’s Forensic Detective: Inside the Crime Scene AR, Coco VR, the Jurassic World Alive AR game, Rampage: AR Unleashed, The Walking Dead: Our World and more.

Magid found that even AR/VR tech-savvy consumers were often confused as to how they should interact with an experience. In addition, discovery remains a problem for brands—many consumers, including existing fans, were unaware of that such experiences were available. That being said, those who are less familiar with the source material are less likely to be made aware of the content at all.

An exception to this, Magid pointed out, is ancillary content that generates organic buzz such as the Resident Evil 7 demo. Unless a brand’s AR/VR content is similarly buzz-worthy, the technology is less than ideal as a gateway—especially since consumers have to be intrigued enough to download an app or put on a headset.

Debby Ruth, vice president of global media and entertainment at Magid told AList that the success of a branded AR/VR experience depends on how well it aligns with a marketer’s goal.

“Early on, I think I lot of brands [used AR/VR] because it was very new and innovative and they got a lot a press coverage,” said Ruth. “Now that the shine has worn off, you have to be very deliberate, just like any other marketing tactic. Some of the best [AR/VR] executions are integrated into experiential marketing. You’re there where people are. There are a lot of alcohol brands that want to send a mood and take you to Scotland or show you why their brand is more special.”

The study found that consumers tend to have an emotional connection with VR, since it serves as an escape from the world around them. Disney/Pixar’s Coco VR was praised by Magid for its ability to draw users into the film’s unique world while offering a unique perspective.

When asked to associate emotions/descriptive words with VR content, respondents chose “immersive,” “exciting,” “realistic,” “curious,” “relaxing,” “escape” and “fantasy.”

AR content, on the other hand, overlays an experience over a user’s real environment and therefore does not offer an escape. For this reason, the medium was viewed as less of an entertainment tool by respondents. Descriptive words chosen to describe AR content were noticeably less emotional. They included “practical,” “interactive,” “analytical,” “curious,” “excited,” “frustrating” and “lifelike.”

To avoid frustrating consumers, Magid said an AR experience should allow consumers to interact with or enhance their reality in new ways and feel rewarded and/or benefited in some way.

Ruth advises brands to consider what a consumer will get out of an AR/VR experience.

“If it’s something that’s just clever and cute, then consumers [won’t be interested],” she said. “If it’s something that’s either fun or engaging by nature or useful, then that is something completely different.”

Oxygen’s Forensic Detective: Inside the Crime Scene AR experience was an example of this principle. The app puts users in the role of a crime scene investigator, who must move around his/her environment in search of clues. Consumers are motivated to complete the task by finding the criminal.

When Oxygen’s AR experience was launched, it was during a significant time of rebranding for the network, Ruth observed.

“That experience did a good job of meeting that goal of making Oxygen aligned with true crime.”

As AR content becomes more commonplace, Magid warns against a half-baked integration.

“If the source material is especially rich, the ancillary idea can be great,” said Magid, “but the execution can bring down the perception of the brand.”

In conclusion, AR/VR has the ability to engage existing fans and become a gateway for new ones. However, immersive tech requires you to “market the marketing.”