In a gold rush, not all that glitters is gold. Only a handful of people will strike it lucky and unless you happen to be the one that staked where the mother-load is sitting it’s unlikely you will be driving your earnings home in a Rolls Royce. It’s not necessarily the first in the goldfields that end up making the money either (see: first-mover disadvantage).
Commercial gold rushes are very similar. There is bucket loads of excitement, a stampede to get into the business, a few people strike it rich and a lot of people end up bust. One day you can be doing well and the next day the gold pan comes up empty because the market changes so rapidly.
Virtual Reality, Augmented Reality and Mixed Reality is the latest manifestation of a technology gold rush. Right now, it’s the buzz word.
People are setting up huge funds and investing millions in startups surrounding the “Reality Technologies”. People believe that these technologies are going to change the world and it’s the place to make guaranteed money. But only half that last statement is right – these new technologies are going to change the world. But not everyone is going to make money.
There are several different factors that have a huge effect on the monetization models of the VR space.
One of the most important is that at least three of the world’s largest companies are sitting in the space and pouring cash reserves into creating VR/AR/MR platforms.
Facebook bought Oculus for 2 billion and with a user base of 1.6 billion you can be sure that however they ultimately introduce VR services to users is going to be pretty sophisticated. Google covered the bottom end of the hardware market with Cardboard, and has now released the more elegant Daydream. Google Earth is being used as a platform for VR content uploaded free of charge by subscribers.
Likewise, Microsoft have developed the amazing Hololens and can use their Windows 10 database to get traction for the downstream content created for the headset that is about to start flowing. Then you have companies such as Samsung jumping into the market with a mid-range smartphone capable set of viewing glasses.
Self-contained Head Mounted Devices (no computer or smartphone required) are being developed cheaper, with native platforms and content, and come with hot and cold running tea and a double overhead twin grease-nippled camshaft.
The entertainment giants are jumping in with entertainment manifestations for VR content and this end of the market is going to be dominated by the giants of the industry who already have the content channels built and operating.
The market is exploding/developing/expanding.
One by one, when you analyze the marketplace, you find the big ponds already have the big fish in them and competing in this space is already very difficult for smaller companies. Secondly, the areas that are left are highly risky with and in fluid markets and technologies that are changing almost by the week.
For example, companies who built a business in stitching 360-degree video footage are about to join the dinosaurs as new software takes all the fun (and the work) out of stitching.
Competition for work in this space is already intense and every company is looking at jumping on the opportunities in the space. This competition hasn’t been in place long enough or the marketplace mature enough to see the shake out that always occurs when gold fever strikes.
Think Dot Com, APP Development, Social Media, Video Hosting sites (YouTube lookalikes) and so on.
There is always a shake out. There are always casualties. There is always a realignment in the market as the technologies develop and market understanding develops and those who didn’t make the grade fall by the wayside.
So often in these explosions of technology the last thing on people’s minds when they have the 3am brainstorm, is the monetization model. That’s why you have hard-headed finance people who look at investment memoranda.
But even the hard-headed get carried away with the hype and throw good money after bad with uninhibited enthusiasm into ideas they think will dominate the experiential markets.
So, just how do you mine the gold in these exciting new markets?
Ask this question:
Why do gold miners buy shovels?
They buy shovels because they can get the gold bearing gravel out faster than using their hands and damaging their fingernails.
The value that the gold miner gets from using a shovel is that he gets richer faster and more certainly than by using another method.
To make money in the new gold-rush you need to create value not for your company – but for the company that is using VR/AR or MR.
You need to take the value proposition one step further if you want to maintain a business with any chance of longevity.
And Virtual and other ‘Realities’ are virtual shovels.
Using an Experiential Marketing Technology in a presentation is the next leap in human communication and connectivity to bring your business exposure, and revenue.
Rise above the crowd. Cut through the chatter.
Creating a marketing experience that people not only see and hear but actually feel and experience puts a lock-nut on the message you are trying to impart.
It provides a tool to companies to enhance messages that often struggle in the white noise of the marketplace.
According to SJ Insights the average number of advertisement and brand exposures per day per person has reached an incredible 5,000+.
Getting YOUR message noticed in that clutter is almost impossible and very expensive.
The new Experiential Marketing tools can provide the mechanism to make an impression on your customer that lasts and is noticed.
According to the latest research by Greenlight, in a study done with 1300 consumers, 91% of people reported overwhelmingly positive feelings towards VR.
71% of consumers ‘feel connected’ to a brand that sponsors VR.
So, if you need to connect with the consumer then creating experiential marketing campaigns lifts the response from the normally dismal fractions of percent’s into very profitable territory.
The key is creating the right experience.
Experiences range from the super exciting – roller-coasting around a virtual city with turns and drops impossible in real life – to sell cars; to the more sedate playing basketball games with fruit to sell lemons; and into wandering at leisure around virtual apartment to sell property.
The range of experiences is only limited by the imagination – worlds and universes can be created. Emotional footprints can be enhanced by bringing your client/customer into the place where he can feel things that few, simply visual/auditory advertisements can’t.
VR, AR and MR are the shovels for the gold-rush – they help you get to the gold of revenue and brand-awareness faster and in a more significant way than any other advertising medium.
The key is in using these amazing (but still nascent) technologies to showcase your business – while it is an entertainment vehicle it is also a commercial vehicle and it is in the commercial applications of these new technologies where the money is going to be made.
Gavin Crombie – Digital Frontier
And now a note from our sponsor:
Funnily enough, selling shovels to the miners is what puts the cornflakes in our bowls – we create commercially profitable experiences using all the tools available – HTC Vive, Google Cardboard, Oculus, Augmented Reality, Hololens – not to mention picks and shovels and the odd gold pan. and recently we became a global strategic partner to Idealens.
Check us out at: www.wearedigitalfrontier.com