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How is XR Technology Changing the Landscape of Advertising?

MAGESJune 19 , 2020
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Extended Reality or XR includes all areas of computer-generated technology that bring together the physical and virtual worlds, thereby creating a unique experience for its users. What use does it have in the field of advertising? How is it changing the way consumers interact with ads?

The letter ‘X’ is a variable that can be expanded and extended to include all realms including Mixed Reality, Virtual Reality, Augmented Reality and Cinematic Reality. The use of an umbrella term cements the fact that in the future, these Realities will be THE reality we will be living in.

Medical and manufacturing industries take up the top tiers of businesses that use XR technology. In terms of consumer oriented XR applications, undoubtedly, gaming and TV take the top spot closely followed by retail and tourism.

XR advertising is changing the landscape of several industries slowly.

A notable development in the XR technology domain is the well-executed XR ad experiences.

XR advertising is an exciting affair for many brands looking to reach out to more consumers, providing utility in an enhanced way. Customers can now virtually interact with their products to get a feel of it before they actually make a purchase.

The potential for the use of extended reality (XR) was tapped into in 2019. This will give digital marketers a large platform to harness this happening technology. And with 5G coming into the picture, there is a better scope of creating these immersive experiences.

Advantages of using XR for advertising

Several companies have tested XR advertising out. According to one study from Ericsson ConsumerLab, the number one reason why people gravitated towards XR was shopping. Consumers were able to look at items that appeared real in size and form.

This doesn’t just apply to retail brands. Automobile companies and aviation industries are moving more towards XR technology for advertising.

Cathay Pacific used the 360° video technology. This technology allowed viewers to see the video from every angle. All they had to do was swipe or move the phone or tablet around.

This enabled potential customers to travel with the airline in a simulated environment. The campaign worked as a brand awareness technique for Cathay Pacific.

This led to an increase in brand awareness by 29%, brand consideration by 25%, and also an increased preference for the airline by 12%.

The campaign led to a higher than average click-through-rate (CTR) rate. The average for the travel industry is around 0.33%.

This is mainly because when a user feels like he or she is present in the environment, even though a simulated one, the effect is more tangible, and the message conveyed by the brand becomes more impactful.

Disadvantages of using XR for advertising

Like with every other innovation, there are slight downsides to XR too.

The amount of data it deals with is large and diverse. This spread of data makes the platform vulnerable and prone to cyber-attacks.

Additionally, the cost of implementing this new and exciting technology is very high. This becomes a barrier to enter XR advertising for many companies.

Moreover, because XR experiences are so immersive, people will need nothing short of the best quality of content. Any subpar XR advertisement would be criticized much higher than a poor traditional TV advertisement.

Because with a TV, customers have the option of switching channels. With an XR experience, they are stuck in the zone of technology and have nowhere else to turn.

Brands entering the world of XR technology advertising should be focusing on generating ONLY great content.

Google rightly mentions on its VR advertising page, “the subject matter should truly take advantage of the medium—transport people to a place, immerse them in a world, and compel them to explore.”

Final Thoughts

As long as brands need to grow their reach, engagement and build long-lasting emotional connections to inspire people to buy from them, they’d need to be constantly adapting to newer technologies. Learning and using XR technology is definitely a case in point.

Because greater immersion experiences will mean greater customer engagement and eventually, conversion. It is also being hailed as one of the best ways of building brand awareness and affinity.

Therefore, advertisers will always need to innovate and come up with exceptional content to advertise in an XR environment. This includes all formats including –

  • Display
  • Video, and
  • Games

In fact, it is predicted to see an estimated market size of more than $200 billion by 2022! A dramatic change in advertising the digital way indeed.

This points to the increasing demand for professionals who have the required expertise in XR technology – which also means, if you’re looking to make it big as an XR professional you’d have “advertising” as an optional field to work in.

But where do you get the expertise? In a professional, no-nonsense and affordable way?

This is what we do. At MAGES, we provide skill-based, practical select-media vocations that prepare our students for the kind of future they want in the real world. Check out our various programmes here!

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