VR advertisements: The next frontier for brand marketing

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  Quantumrun Foresight
• November 23, 2023

Insight summary

Virtual reality (VR) is revolutionizing the advertising landscape, offering immersive, interactive experiences that transcend traditional marketing mediums. Companies from luxury brands like Gucci to household names like IKEA are leveraging VR to engage consumers in new and impactful ways. According to GroupM's recent survey, 33% of consumers already own a VR/AR device, and 73% are open to VR advertisements if it reduces content costs. While the technology offers promising avenues—from transforming travel advertising to creating empathetic experiences—it also raises concerns about social isolation, data privacy, and power concentration in the tech industry. VR's disruptive potential in advertising is accompanied by both opportunities and ethical considerations.

VR advertisements context

Virtual reality advertising involves creating and delivering immersive advertising experiences through the use of VR technology in addition to traditional physical and digital ad channels. The VR ad takes place in a simulated three-dimensional (3D) world, allowing viewers to interact with the content without external distractions or interruptions. Unlike augmented reality (AR) ads, VR advertising does not involve mixing real-world elements with simulated ones. Instead, customers are transported to fully immersive virtual environments separate from their physical surroundings.

Since the mid-2010s, VR advertising has been utilized by luxury and forward-thinking brands to forge an emotional connection with customers and deliver visually stunning experiences, according to XR Today. One notable example is Gucci's VR video campaign for its 2017 Christmas and gift-giving promotion. The brand also released a VR film for its pre-fall 2017 collection.

Based on advertising agency GroupM's 2021-2022 Consumer Tech Preferences survey, approximately 33 percent of participants reported having an augmented or virtual reality (AR/VR) gadget. Moreover, 15 percent expressed an intention to purchase one in the next 12 months. The respondents also exhibited a strong inclination towards content experiences that involve advertising. The study revealed that 73 percent of respondents are willing to view advertisements regularly if it reduces the expenses associated with content consumption. As more audiences consume VR content, their readiness to consume ads presents significant possibilities for brands.

Disruptive impact

As VR technology improves, it can eliminate the need for window shopping. Furniture company IKEA adopted a VR try-before-you-buy campaign, enabling customers to use their phones to place the company's products in their living spaces. 

Current augmented reality phone apps offer early hints at a VR future. Makeup Genius, L'Oreal's virtual makeover AR app, allows customers to experiment with different hair colors and makeup styles using their phone's camera. Similarly, Gucci's app offered a camera filter that gave customers a glimpse of what their feet would look like in the brand's new line of Ace shoes. However, future versions of such apps will apply makeup and clothes onto photorealistic customer avatars.

Virtual reality can also benefit the travel and tourism sector. Traditional advertisements often fall short of capturing the true essence of a holiday destination. However, with VR, users can immerse themselves in breathtaking sunsets, visit iconic monuments, explore remote locations, and even converse with historical figures.

Meanwhile, organizations can use VR advertising to replicate real-life experiences and evoke empathy, making the ads more impactful. An example is a 20-minute VR experience developed by Stanford University, which examines the effects of racism and bias in healthcare settings, including microaggressions in the workplace. The audience response to the experience was overwhelmingly positive, with 94 percent of viewers stating that VR was an effective tool for conveying the message. Scotland has employed similar principles to create a road safety ad, leveraging VR to create an immersive experience that drives the message home.

Implications of VR advertisements

Wider implications of VR advertisements may include: 

• Blurred lines between reality and VR, leading to increased social isolation.


• New revenue streams for businesses, particularly in gaming and entertainment. However, it could also lead to a further concentration of power among a few large tech companies that dominate the VR market.


• More targeted political campaigning, with the potential for highly immersive and persuasive messaging. 


• Worsening social and economic inequalities if VR technology is not accessible to all.


• More innovation in VR technology, leading to new applications and use cases. However, it could also create new challenges around privacy and data security, particularly if VR technology collects sensitive user data.


• New job opportunities in VR content creation, digital marketing strategy, and design. 


• More inclusive and diverse advertising experiences, showcasing different cultures and perspectives. However, it could reinforce existing biases and stereotypes if not designed carefully.


• Increasing ethical concerns about excessive data collection by VR devices and platforms.

Questions to consider

• If you own a VR device, do you enjoy watching VR ads?


• How else can VR advertising change how people consume content?