1. February 2017 | Patrick Milling-Smith / Here Be Dragons & Rori DuBoff 1
Virtual Reality
for Brands
by Patrick Milling-Smith & Rori DuBoff
February 2017

2. February 2017 | Patrick Milling-Smith / Here Be Dragons & Rori DuBoff 2
Introduction
It is easy to get overwhelmed by virtual reality (VR), especially if you consider the
phenomenal growth expected over the next few years, with revenues from both software
and hardware projected to increase 20x from around $1.8 billion in 2016 to over $37 billion
in 2020.1 If you combine VR with augmented and mixed reality technologies, total
worldwide revenues are expected to grow at a compound annual growth rate (CAGR) of
181.3% in the same period, reaching more than $162 billion by 2020.2 Goldman Sachs has
predicted that the AR/VR industry’s revenue will eclipse TV’s by 2025.3
Today it seems that almost every week sees the launch of a new device, platform or company,
promising to deliver more break-through technology. In the past year alone, technology
heavyweights like Samsung, Sony, HTC, Google and Facebook Oculus launched VR devices.
Just last month, Microsoft announced a range of Windows 10 headsets with partners Lenovo,
Dell, Acer, and HP.
However, it’s important to think of virtual reality as more than just the hardware, more than head
mounted displays or goggles, more than consoles and 360 cameras or hand controllers. If we
limit our understanding of VR to only the shiny new products for sale, then we fail to recognize
the true potential of this evolving media for the long-term.
Virtual reality, like every medium before it, will not grow based on the technology alone, but
through a mix of compelling and accessible content that is designed squarely around the
fundamental nature of the human condition. More than simply an engaging experience, VR has
the potential to surpass all user expectations by feeling emotionally and physically
transformative.
The unique power of VR is unlike anything we have seen before due to the intensity of its user
experience and impact. Whether through 360º live action video, game engine or computer-
generated imagery (CGI), VR has the ability to transform every day moments into life altering
experiences that transcend our conventions of space and time. By creating the illusion of 3D
depth from 2D images (via stereoscopic display), VR transports people into an immersive 360º
world that saturates the mind, body and senses. Such is the power of this sensation that people

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feel they are physically present within the experience, living it first-hand rather than simply
viewing it on a screen.
“VR eliminates the need for external frames. For the first time, the medium is no longer outside
us, but within us. The paint is human experience and the canvas is our consciousness. The idea
of an externalized medium ceases to exist” -- Chris Milk, co-founder, Here Be Dragons
In an age where we are often physically present in one space yet emotionally engaged in
another — documenting life rather than truly experiencing it — VR delivers unparalleled ‘in the
moment’ presence. Furthermore, as a genuinely first-person medium, VR has the unique
potential to create memories. We remember best from our own experiences by doing and trying,
rather than merely reading, listening or watching. And it is our memories that form the overriding
driver of our brand affinities and purchasing decisions.
Such power to create memories is a key point in Byron Sharp’s book How Brands Grow, when
he states: “the dominant way that advertising works is by refreshing and building memory
structures. These structures improve the chance of a brand being recalled and/or noticed in
buying situations; which in turn increases the chance of a brand being bought. So, to influence
behavior, advertising must work with people’s memories.” Thus, VR, unlike any other medium,
has the power to create memories that induce deep brand affinity and inspire action.
The profound impact of VR is proven by the UN & Here Be Dragons’ work “Clouds Over Sidra”
about the plight of a young Syrian refugee. This VR experience inspired one in six members of
the public who viewed it to donate money, twice the average for the UN and UNICEF4 and over
15x the average response rate to direct marketing. The message is clear - Making people feel
often makes them act.
Although we are just at the beginning of the VR evolution, we can already see the amazing
potential of this medium to transform the ways we communicate, experience and share the
stories of our lives. What was once improbable and unimaginable in traditional media can now
be achieved with VR.
Although estimates for mass-market VR adoption have varied, the overall consensus across the
industry is that the market will be huge. Now is the time for creatives and marketers to be bold

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and challenge all preceding conventions and paradigms. Those that lead the way early will be
disproportionately rewarded as virtual reality continues its march on the mainstream.
In 1996 the Centre for Creative Leadership published research that went on to underpin the
capability building programs of many of the world’s biggest companies. It showed that business
executives believed they learnt best from on the job experiences and discussions with their
peers as opposed to formal study or training. In that spirit, we both wanted to share the lessons
our successes and failures have taught us with other practitioners or those considering VR.
5 Points for Virtual Reality
1. Reinvent, don’t Retrofit
When beginning a VR project, the most fundamental question to ask is what are you trying to
achieve through VR that you cannot achieve through any other medium? Why will the
experience be meaningful and relevant for your intended audience? VR provides the opportunity
to connect and engage with audiences in a fresh new way, so it is important to try new things
versus replicating the same. Since VR is radically different to other formats, you should use its
unique capabilities to build experiences that can only be achieved within a visceral, 360º
immersive space, rather than for a flat screen.
For example - a traditional TV commercial or worse, a 2D web banner, bluntly transposed into a
3D environment won’t work. When your audience is committing to fully engage with a more
immersive experience, their expectations need to be met with a ‘ground-up’ reimagining of the
campaign for the VR experience. Doing otherwise will ruin the overall experience by breaking
the sense of “presence” (the degree to which a person feels truly submerged within a virtual
environment).
For brands, VR need not be considered in an independent silo, but as an extension to the
overall marketing strategy. Consumer insights regarding media consumption and social
behavior, or demographic and attitudinal data should be applied as rigorously to VR as other

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marketing communications channels, as this research can powerfully inform the successful
development of this evolving medium.
2. Step outside the screen. Create for 3D spaces, not 2D frames
Creating in VR often means thinking like an architect because spatial visualization and physical
orientation set the narrative construct. In addition, VR tends to alter one’s perception of space
and time due to the limited field of view within a headset, so everything seems to be more
immediate within VR versus viewing ‘flat’ video.
With so much multi-sensory information to absorb, the experience needs to be deliberately
orchestrated to help the user easily navigate their surroundings. Every element in the 360º
environment, including sound, action, light and color should be used to help guide the users’
attention.
Rather than composing shots as a filmmaker would, by curating frames for the viewer, VR
creators need to think in terms of space, alongside traditional elements such as story, aesthetic
and performance. Instead of a traditional shot list, a VR project often starts with a list of
environments that the user will experience, along with actions for those environments.
Audio is a significant component for crafting VR experiences as headsets limit spatial
awareness and the ears are forced to do much more work. Binaural sound, in which tiny delays
between the sound in the right and left ears trick the brain into assigning direction and distance,
can help create a true sense of presence.
For more physical VR experiences, particularly within gaming, haptic components such as hand
controllers, gloves, and full bodysuits allow users to feel tactile sensations synchronized with the
VR experience. Haptic technologies, although not yet mainstream, can create truly intensified
levels of engagement by providing an added dimension of reality to VR experiences.

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3. Develop storyworlds, not just storylines
Since VR is often told in the first-person point of view, the narrative needs to be constructed
such that it enables one to feel that they are living the story, and not just watching a story from
the outside.
The narrative in VR should not just be conceived of as a linear story (storylines), but also as
iterative experiences that are linked together through common space and themes (storyworlds).
The traditional linear narrative can be broken down and reconstructed as something spherical
and cyclical to invite user exploration and discovery versus static viewing.
Balancing the narrative between action and atmosphere helps to engage a user without holding
their hand too much. Two people rarely experience VR in the same way. 'Over-directing'
people's attention can make them feel trapped or bored. Creators who try to exude total control
over the narrative will end up creating barriers to engagement, and thus fail to use the medium
successfully. Overall, the subtler the clues, the more intuitive the guiding of attention feels, the
more accomplishment the user feels in their environment.
There are numerous learnings to apply from the gaming industry for VR, especially as it pertains
to fluidity of user experience and seamless navigational interfaces. Game designers establish
the space in which players feel free to explore, creating their own adventure and outcomes
versus following a preordained path.
An important difference to note between gaming-based VR and non-gaming VR is in regards to
user expectations and behaviors. Whereas a hard-core gamer may desire to spend hours and
hours battling through immersive VR worlds competing to win, the average VR user probably
has less patience and time to commit. Brands developing VR experiences may want to think
about starting with a time frame that is no more than two or five minutes, with the potential for
episodic programming through an ongoing content series. Non-gaming content experiences in
VR still should strive to be fully immersive, however base-level interactions should not require a
massive learning curve or intensive sweaty-inducing game-playing sessions.

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4. Get up close and personal. Make the camera a character
VR puts everything into someone's intimate space. A close up isn't just a close up view of
someone's face. Often, you are literally standing so close to them you could feel their breath. It's
a powerful tool that works quite differently than its cousin in rectangular filmmaking.
It’s important to shoot for both clarity and stability, because one always has to consider that the
camera is a human being. You would not (generally) yell in a human's face, nor would you whip
them around with quick pans or twisting crane shots. Always consider that the camera is your
eventual audience. To design the most immersive and approachable experience you need to
think about how the user will experience your work, particularly in terms of personal proximity.
When taking someone through an experience, you need to give them time to explore and take
in their surrounding environment. Cutting from scene to scene quickly undoes the story because
in reality a viewer would never be thrown from circumstance to circumstance in such an
aggressive way. Giving the user’s senses a chance to calibrate and become a part of the
experience is fundamental to establishing presence in virtual space.
Exhilarating experiences (flying, looking down from breathtaking heights) certainly have their
place in VR, but movement is something that must be done very carefully, otherwise users can
become nauseous. One poor experience could keep people from putting on a headset in the
future. Movement should mostly be done gradually, and it works best when going forward,
backward, up or down. Rotations and pans can disorient the viewer. Fast movement is not out-
of-the-question, but there would need to be a logical reason for it and it would need to be well
placed.
At the same time, movement is a terrific tool for storytelling, as in Chris Milk’s VR experience
“The Evolution of Verse,” in which the viewer floats upward above a lake and into a magical
tunnel. As VR rig configurations improve, there will be more opportunities to incorporate
movement successfully, and improved headsets will reduce the risk of making viewers
nauseous.

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5. Transcend the now
The amazing potential of VR is its ability to transport the user to an entirely separate world
removed from their immediate surroundings. In real life our attention span is scattered across a
wide range of media, whether we are speaking on the phone while walking or watching TV while
sending emails. In contrast to such multi-tasking and multi-screening behavior, VR absorbs
100% of a user’s attention because they physically have something blocking their eyes from real
world distractions. The audience has chosen, and sought out, this total immersion and
engagement.
In fact, people using VR become so singularly absorbed in the experience, that their emotions
and senses become even more heightened than they might normally be in the physical world.
Virtual experiences can feel so vivid that it often feels like a magnifying glass lens is intensifying
everything - from the sun’s glare on water, the dripping sweat or crinkles of a forehead, or the
shaking vibrations of a creaking table. You see, feel and experience these things even more
acutely in VR because you have no peripheral view beyond what is immediately surrounding
you.
Since VR worlds have no real world boundaries to limit the imagination or experience, creators
can literally “shoot for the stars” when it relates to developing ideas. From inside a human body
to far away galaxies, to past, present or future, anything is possible as long as you have the
talent and resources to create it.
For brands, artists, companies and consumers, this opens up a whole new way of thinking
about content. Instead of distributing via 2D media, or layering content into our existing 3D
space, you can transport people to entirely new worlds of reality.
The potential to evoke emotions (i.e. awe, wonderment and empathy), enrich people’s lives
(learning, adventure, social connection) and empower or impact thinking is transformational
through these cognitively rich experiences.

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Audience Distribution & Engagement
Equally important to creating amazing VR content is making sure that the VR content is
distributed and discoverable on a mass scale. However, for most, VR is not yet an accessible
medium. Despite massive press coverage over the past year, many people remain confused –
they do not fully understand what VR encompasses or why and how they should use the
medium in their daily lives. Such confusion is understandable considering the many different
devices and incompatible platforms being marketed.
Price has also been a prohibitive factor, particularly for high-end devices like the Oculus Rift or
HTC Vive. The cost for these head mounted displays, along with the computers to operate such
high-powered devices, is still relatively high. Fewer than 2 million high-end headsets were sold
in 2016, with an estimated breakdown of approximately 243,000 Oculus headsets, 420,000 HTC
Vive headsets, and 745,000 Sony headsets sold.5 Such high-end VR devices (PC + console)
are projected to reach over 20 million by 2020, and this figure may increase if Sony is able to
fully capitalize on their already installed PlayStation VR base of more than 50 million.6
The real driver growth in VR for now and the next few years will most likely not be from high-end
devices, but from mobile VR. Lower-priced devices, including Google Cardboard, Daydream,
and Samsung Gear VR accounted for 98% of all units sold in 2016.7 According to Samsung,
approximately five million Gear headsets were shipped globally by end of 2016.
By 2020, sales of smartphone VR headsets (mobile VR) are expected to surge fivefold, rising to
over 60 million (totaling approx. 90 million if you include all headsets) 8 Most of these devices do
not provide the level of total true immersion and agency that a fully navigable VR experience in
HTC Vive offers, but the population that can be reached is sizably larger and experiences can
still be transformative for the user.

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Figure 1: VR device projections: Global forecast (unit shipment in millions)
Source: Greenlight Insights & Road to VR; 2016 Virtual Reality Industry Report
The number of devices sold is not the only indicator of VR usage, because we expect significant
usage through location-based VR at events, roadshows, pop-up installations, showrooms,
theaters and other multi-media venues. This month, IMAX launched its first VR theater in Los
Angeles and over the next three years IMAX is planning to open a total of twenty-five VR
theaters around the world. In China, there are already 3,000 VR Internet arcades that have
laucnhed.9 A wide variety of brands such as Pepsi, AT&T, Audi, Honda, MasterCard, GE, Nike
and Adidas have created these location-based VR experiences to connect with their audiences
in powerful new ways.
Quite possibly the most mainstream channel for distributing VR content will be the Web, either
through 360º video browsers like You Tube or through WebVR, an emerging medium for 3D
content. We expect that over the next few years, VR content and experiences will start weaving
their way into our daily lives in a much broader range of occasions.
In 2014 there were around 200,000 users of VR and in 2018 there will be about 170 million
users – that is an 85,000% increase according to Credit Suisse and Kzero Worldwide research.
As the market continues to develop, brands will need to make strategic decisions about which
devices, platforms and places are the right fit for their objectives. A common challenge is
achieving a balance between maximizing audience reach and levels of immersion /user
engagement.

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Outlined in the chart below is an overview of the various VR devices, platforms and places that
brands can consider when then developing, distributing and activating VR experiences.
Figure 2: VR Distribution & Activation: Device, Platforms, Places
Creating multiple paths of engagement, along with a range of cross-platform experiences united
by a common narrative thread, will likely serve marketers best. Amplifying VR experiences
across social networks and within real world communities (via location-based VR) will help
extend brand visibility, reach and engagement.
Industry & Media Applications
The gaming world has helped pave the way for the VR industry, representing approximately
42% of a software market worth $331 million in 2106. However, over the next few years, as the
VR software market is expected to grow to more than $19 billion by 2020, game-based VR will
only represent 27% of total consumer and business revenue.10
Growth will be in categories beyond gaming, including industries such as entertainment and
healthcare, journalism and manufacturing, education, retail, real estate and many others. There
DEVICES PLATFORMS PLACES
Reach-----
<------Immersion
 Mobile phone with VR
viewer (i.e. Cardboard)
 Mobile phone with VR
system (i.e. Daydream,
Samsung Gear)
 Gaming Consoles (i.e.
Sony, Xbox)
 PC-based HMDs (i.e.
Oculus Rift, HTC Vive)
 Internet video providers (e.g. YouTube,
Netflix, Amazon)
 Social networks (e.g. Facebook,
Snapchat)
 Search Engines
 App stores (e.g. Google Play, iTunes)
 WebVR browsers (e.g. Carmel, Mozilla)
 Content viewing apps (e.g. With.in,
NYTVR, Discovery, Samsung)
 Software ecosystems (e.g. Valve
Steam, Oculus, Daydream, Samsung,
Microsoft Windows 10)
 Ad Networks (e.g. Immersv, VirtualSky)
 Social VR (e.g. Altspace)
 Events & roadshows
 In-store / retail, showrooms
 Pop-up venues (e.g. malls, out
of home)
 Museums, educational venues
 Multi-media theaters + gaming
destinations (e.g. VR arcades,
IMAX theaters, the VOID)
 Private spaces (homes,
offices)

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is a range of opportunities available for brands, from developing original or sponsored VR
experiences to creating new business models for consumer engagement.
As VR requires significant investment to produce, brand sponsored and ad-supported
experiences can help offset some of the costs, while enabling brands to take advantage of the
power of this new medium. Research has shown that consumers are often willing to view ads in
exchange for free access to content, versus paid. According to an IBB Consulting survey, 42%
of consumers would watch virtual reality ads in exchange for free content and 38% would watch
ads as long as they are “cool and relevant”. 11
However, unlike other mediums that may be more permissive of intrusive advertising, we
strongly believe that advertising in VR must be native to the experience. It is absolutely crucial
that brands recognize VR is a user-centric medium, whereby users are not just sporadically
viewing experiences, but consciously choosing to inhabit and participate in an immersive
experience.
Branded media and advertising in VR is still in its very nascent stages, but outlined in the chart
below are eight different potential brand VR applications, all of which are still evolving and just
being initially explored.
Figure 3: VR Brand Media Applications
BRAND APPLICATION DESCRIPTION
1. ORIGINAL CONTENT
EXPERIENCES
Unique content developed natively for VR, in order to entertain, educate, inform or provide
some other form of value to the user. Content could be episodic or subscription-based.
2. SPONSORED BRAND
EXPERIENCES
Aligning a brand with VR content and experiences through promotion, partnership and/or
bundling. Sponsorship can be digital or physical through location-based VR such as
events, road shows, in-store, showrooms, arcades, pop-ups, cinemas and more.
3. PRODUCT PLACEMENT Incorporating branded products within a story or experience, with varying levels of
integration that may or may not be intrinsic to the core VR experience
4. BRAND ADS VR ad sponsored content (e.g. 360º video) appearing at the beginning, middle or end of a
VR experience. Whereas some VR content has a purchase price, ad-sponsored content is
often provided free to the user if they agree to view/interact with the ad content.
5. PRODUCT
VISUALIZATIONS
Life-like simulations that allow users to virtually experience/trial product features and
services; from test driving a new car, to exploring an open sale house, to previewing seats
for upcoming shows, to lab training new medical devices.

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6. CONTEXTUAL LINKS VR hot links, such as words, images or objects that can be activated (via visual gaze,
touch, audio voice-over) to provide enhanced content or information.
7. SOCIAL VR Branded VR environments, agents or dialogue developed with the purpose of building
branded virtual communities.
8. COMMERCE
INTEGRATION
(VCOMMERCE)
Linkages to transactional opportunities to purchase products or services connected to the
VR experience. AI-powered bots that support customer service and foster conversion.
A great example of original VR branded content is GE’s The Possible12, a five-part documentary
series, which lets people experience the most life-changing innovations of our time. Users can
come face-to-face with the world’s most advanced robots, explore space and ride a hover
board, and access science not yet shared with the public. Beyond just talking about innovation,
GE is using VR to demonstrate its potential and application in the real world, thus truly bringing
to life the idea of ‘Imagination at Work’.
Sponsored brand VR activations, such as Samsung’s Night Before13 holiday experience,
demonstrate the power of VR to stimulate people in real world environments. From conception,
VR was an integral component of Samsung’s 2016 “Gift of Galaxy” holiday campaign. At select
venues in New York City and Los Angeles, participants had the opportunity to take a magical
sleigh ride with Santa and his helpers across a blend of virtual and physical worlds. The
experience was also amplified across a range of integrated touch points including: Samsung
mobile VR, 360º video on YouTube and other video platforms, social channels such as
Facebook and Twitter, and out-of-home in select locations across the USA.
Across all industries, from retail to automotive, healthcare, travel, design, journalism, education
and real estate, we see that numerous brands are already using VR to better engage
consumers, as well as sell product and guide business transformation.
To continue fueling brand investment in VR, it is critical that we apply standards for
measurement and success. The role of data analytics is crucial for guiding successful VR
strategies. Traditional brand metrics such as awareness, affinity, purchase intent and
loyalty/advocacy remain relevant performance indicators. However, much richer dimensions can
be captured in virtual environments, not previously available in 2D spaces. For instance, heat-
mapping tools can track and visualize user interactions within virtual environments, showing how

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people interact with content from a multitude of dimensions, such as proximity, duration, and
intensity.
Conclusion / Future VR
The future for VR is not easy to predict since we are in the early stages of this undeniably
powerful new medium. After all, who would have expected back in the mid 1990s that
Facebook, Snapchat or Uber would be invented? We all know that technology can lead to
massive progress, but the path towards that is often filled with bumps in the road, surprises and
failures. The best most successful outcomes in VR are things we might not have even imagined
yet.
The expectation is that devices over time will continue to become less expensive, more
accessible and less bulky, easier to use (wireless, lighter and overall more ergonomically
designed). The activation energy required to engage with VR (i.e. put on the headsets) should
eventually become less of a usage obstacle.
In parallel, VR experiences will also become more immersive with higher fidelity through greater
field of view and foveated imaging, facial and body tracking, as well as haptic feedback. Beyond
gaze-controlled interaction, we will see a shift from eye as a controller to the full body as a
controller, which enables more responsive and immersive VR experiences.
Social VR will also be a massive area of growth, as we shift from isolated experiences to virtual
communities that live in real parallel time with our physical worlds. We will develop identities
within VR through virtual avatars that allow for true sense of embodiment, meaning that the
person breathing, talking and moving in VR will feel uncannily like the self.
As VR develops, and especially as technologies such as artificial intelligence further power
experiences, we are likely to see business transformations across multiple industries. Related
technologies such as augmented and mixed reality will also progress, potentially merging with
VR in certain situations, as with products like Intel’s Project Alloy.

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A positive sign of any nascent technology’s readiness for mainstream adoption is often a
unification of its industry standards. The Global Virtual Reality Association (GVRA) was recently
established by Facebook, Alphabet Google, Sony, Samsung, HTC and Acer, with a goal to
promote development and adoption of VR globally. Issues such as privacy and data tracking,
as well as ethical practices in these new virtual worlds, all need to be discussed and agreed
upon by society at large.
Ultimately, as price becomes less of an issue and user adoption increases, the deciding factor
for the success of VR will be the content and experiences. If we want people to take the time to
engage and stay engaged in VR, we need to create experiences that go beyond the average and
achieve the amazing – evoking awe, wonderment and other meaningful responses. The
transportive magic of VR is that it lets people be or do something that they can’t experience in
real life.
Connecting with users in such a direct and immersive media obliges brands to elevate their
efforts, striving for purpose-driven and user-centric experiences, versus overtly commercial
messaging. For, if there is one thing we know it’s that superficial content leads to superficial
responses. It is through deeper and more meaningful experiences that brands can create more
memorable connections that drive action.
ENDNOTES
1 SuperData, Jan 2017
2 IDC, Worldwide Semiannual Augmented and Virtual Reality Spending Guide, Aug 2016
3 Goldman Sachs Global Investment Research, Virtual & Augmented Reality: Understanding the Race
for the Next Computing Platform, Jan 2016
4 UN & Here Be Dragons (formerly VRSE), Clouds Over Sidra, Jan 2015
5 SuperData, Jan 2017
6 SuperData, Jan 2017 / Greenlight Insights & Road to VR, Nov 2016
7 HyperGrid Business / SuperData, Nov 2016
8 Greenlight Insights & Road to VR, Nov 2016
9 Niko Partners; China VR Games Market, Dec 2016
10 Super Data, Jan 2017
11 Interactive Broadband Consulting Group (IBB), April 2016
12 GE & Here Be Dragons, The Possible, Jan 2017
13 Samsung & Here Be Dragons, Night Before VR Holiday experience, Dec 2016