The Vertebrae advertising platform bridges the gap between brands and creating fun and highly engaging virtual reality experiences. One of its most notable activations was done in partnership with Lionsgate to promote September’s supernatural horror movie, Blair Witch. Although the experience is primarily designed for mobile VR viewers such as Google Cardboard and Samsung Gear VR, there is an online version for web browsers. It places viewers in the middle of a darkened and spooky environment that changes as they look around.
Vertebrae founder and CEO, Vince Cacace, recently spoke with [a]listdaily about the challenges of creating a VR ad platform, and how experiences like Blair Witch will lead to even bigger ones down the road.
What is Vertebrae?
We’re a virtual reality advertising platform based in Santa Monica, California. We’re about 20 people, and our mission is to help creators monetize content in virtual reality and usher in a new form of intensely creative advertising. What we saw when we started the company was that, on the one side, creators and publishers need an effective monetization solution outside of a transactional model. On the other side, we realized that for some of the same reasons VR is transformative for storytelling, it has those same abilities for advertisers—in terms of creating ads that have a sense of depth, presence and emotional engagement—using them to monetize content in a fun way.
Vertebrae is the conduit and the pipeline. We’ve defined some of the first VR ad formats in concert with the IAB. We’re working with brands on the one side, and creators and publishers on the other, to help monetize the VR ecosystem as the audience grows and ad revenue becomes a meaningful income source.
With the rise of apps and 360-degree video ads, what direction do you think VR advertising will lean most heavily toward?
Some of the first ad formats that we defined with the IAB are 360 videos, [including] 3D objects, so that you can think of dynamic product placement into a virtual environment, then you can create little Easter eggs around those objects. Then they pop-out into a 360 video, and you can make those incentivized or rewarded. Then also there are branded rooms, which kind of look like a 360 image but with interactive things to do in the space.
From a scalable perspective—in terms of what people are starting to largely advertise—I think product placement will be a big one. 360 videos will be a big one, and I think some of the more bespoke campaigns we’ve worked on are going to be the future when the technology is better defined and worked through.
My thesis on what ads will work best in VR are ads that are an “on-rail” experience—meaning that you don’t want to have to teach users navigation or control within an ad because they’ll get frustrated. But you also want to make them interactive, so I think ads are going to a place where they’re gaze-based interactive on-rail experiences. Gaze-based interactive essentially means that the content is non-linear and that the user has to engage and interact with the environment for the story to continue to unfold. For instance, with what we did with Blair Witch, it’s interactive but a lot of times people don’t realize it, because the user looking one way will input some change to the scenery behind them. So, when they look back, things changed but they can’t see it. It worked really well for a horror concept. Then the jump scare at the end is triggered by you turning around for a final time. A more tangible example would be Taco Bell, where you’re on an alien planet, and you have to find a quesalupa before a monster attacks you. In that case, you have to look at the quesalupa for a mechanical arm to shoot out, pick it up, and bring it back to the spaceship.
How did you partner with Lionsgate to create the Blair Witch promotion?
They’re an advertiser that came to us and said, “We want to promote our new Blair Witch movie in the form of a VR ad. We’re looking for X most single digit million number of impressions on that campaign and a contextual core audience that can fit the bill.” So, we looked across our publisher network and worked with them to get the ad created. We did not produce the content, that was the Other World team, and they’re amazing on the production side. We try to be production agnostic when working with brands. Sometimes brands will be working with an agency, and the agency may want to do production, or (in the case of Lionsgate) they can say you can do the production yourself or work with an external partner. Our goal is to be a technology platform. Although we occasionally take on production projects, we try not to because they take away from platform resources.
Which has a greater influence on VR ad creation, video games or traditional ads?
I would say games. The reason being that games are naturally interactive, and there’s a whole industry that’s been going on for 200 years around ad units and formats in the 2D world. When you think about an immersive world, going beyond the 2D window of content, and being inside the content, you need to be able to interact with that environment. I think gaming lends nicer to that than some of the traditional ad world. We’re focused on creating ad units and formats that are true to the medium of VR versus regurgitating things from the past and plastering them into VR.
The Vertebrae platform is focused on mobile VR. Do you think it’s worthwhile to expand it to premium headsets?
In my opinion, not right now. Maybe with the emergence of PlayStation VR, we’ll see something different, but we’re focused on mobile for three reasons:
- There’s a much larger user base at this point in time.
- That user base is a wider demographic, whereas it’s hardcore gamers and early adopters, 18-34-year-old males, in the premium market. Mobile VR can have female, head of household, decision makers who got a Cardboard with their New York Times subscriptions.
- The nature of the content is more casual and therefore more conducive to advertising. If you think about buying an Xbox and then paying $50 per game, you don’t expect to see ads within them. Likewise, the same is largely true with Oculus and Vive, where you pay a lot of money for the console, then a lot of money for the individual experience.
How do you generate awareness for VR activations like Blair Witch?
I think what we’re seeing is that these advertisements are maximizing the distribution within themselves. It’s brands approaching us and saying, “Hey we’re looking for X number of impressions across these types of environments. What do you have in your network that fits the bill?”
From a brand justifying an ad spend in VR, where it gets really interesting, is that you don’t have to spend $3 million to build The Martian VR and spend almost a year building that out. People who are doing ads in VR can experiment with shorter forms of content to see what works and what doesn’t. Then we’re maximizing the distribution on the other end.
How have you seen mobile VR adoption grow over the past year?
It’s huge. The Gear VR has just grown in waves and waves, especially since they gave away with S7 purchases, and I’m hoping the same will be true with the new Pixel Phone [and Daydream Viewer]. Then, of course, Cardboard is free at every conference. So, it seems like you’re seeing the download rates, particularly for Cardboard apps, picking up in waves. I hope that Daydream sees the same kind of exponential growth that Gear VR has so that it becomes a meaningful platform in a short amount of time.
What is the most important factor in continuing to grow VR as an advertising platform?
It all comes down to the users. If the users aren’t there, the advertisers don’t really care. We’ve seen a tremendous amount of growth and investment this year, and we’re starting to have that moment where there’s so much investment and momentum that it’s starting to feel real. But the users need to catch up to that. I saw a statistic showing that six percent of people in the US have had a VR experience. For that to grow into a regular user base that’s coming back and engaging with the content is going to be crucial. We’re bullish on how soon that will happen, but it is a big open question. There’s a lot of investment and hype in the space right now, but we haven’t seen the consumer demand match up with that yet, and that’s partly because the technology is still coming out.