Facebook Launches Initial Test of Ads in the VR Environment

Facebook sees VR as the next stage in social connection, providing more immersive, engaging ways for users to connect, collaborate and engage in an entirely simulated environment. 

But in order to fuel the growth of VR, Facebook also needs a clear strategy for monetization. Building this new platform takes significant investment, and Facebook needs to factor that in – which is why, even at this early stage, Facebook is already exploring ads in VR worlds, and is now moving into live testing of such, in a limited capacity.

Good ol’ Jasper’s Market – always makes an appearance in Facebook’s ad mock-ups.

As you can see here, Facebook’s VR arm Oculus is now testing new in-stream VR ads which users can interact within in the headset.

As explained by Oculus:

“Our primary focus at Facebook Reality Labs (FRL) is to bring more people into VR, advance the consumer experience, and make progress on our longer-term augmented reality initiatives. We’re also exploring new ways for developers to generate revenue – this is a key part of ensuring we’re creating a self-sustaining platform that can support a variety of business models that unlock new types of content and audiences. It also helps us continue to make innovative AR/VR hardware more accessible to more people.”

Much like Facebook’s main app, the facilitation of ads reduces the cost to consumers, because Facebook makes its money from their usage, as opposed to charging a subscription fee. For Oculus, users will still, of course, need to purchase a VR headset, and those don’t look like they’ll be coming for free anytime soon (the current Oculus Quest 2 headset costs $299). But by building an ads ecosystem at this early stage, Oculus can help to reduce the costs, in various ways, in order to facilitate broader adoption of the technology.

Which is also a key note for advertisers. It may not seem like a big deal yet, but VR sales have seen a massive jump in recent months, with around 2 million Quest 2 headsets sold in Q1 this year alone. Projections are that Facebook has already sold around 5 million units of the device, which was only launched in October last year, while Facebook’s ‘Other Revenue’, which primarily consists of sales of its Oculus headsets, rose 146% YoY, according to its most recent update.

Facebook Q1

The COVID-19 lockdowns, which severely limited entertainment and social options around the world, pushed people to find new ideas, and VR emerged as a helpful distraction for many. And given this, there may already be significant appeal in advertising in VR – and that will only become more relevant, and more valuable, as time goes on, and adoption continues to pick up steam.

Right now, however, this is only a limited test, with Facebook looking to gather feedback from developers and the community and iterate from there.

“We’ll provide more details on when ads may become more broadly available across the Oculus Platform and in the Oculus mobile app, as well as guidance for businesses and developers interested in advertising on Oculus.”

Still, it’s an interesting area to watch, and while some will balk at the idea of ads infiltrating everything, even virtual worlds, the principles here are solid, and it makes sense for Facebook to build ads into the early stages of development.

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