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In the last year, virtual reality devices, technologies, and solutions have made steady inroads into the popular market. What had once seemed like a niche field of theoretical potential for hardcore gamers has suddenly become relevant for users ranging from civic engineers to children. However, as a field in general, virtual reality remains several steps away from the preeminence enjoyed by mobile platforms. For software developers, this has several important ramifications on how to design and prioritize the marketing campaigns that accompany VR products. In this article, we draw attention to some of the negative trends in VR marketing and provide some solutions for how to optimize the release of said products.
Mobile-based technology has reached a level of ubiquity such that it no longer even seems necessary for marketers to push the question of why consumers should consider the given product. Instead, they can focus on showing what it is and how it is better than their competitors. The landscape for virtual reality, however, is completely different. Many in the industry, particularly those so close to the production that it is difficult to take a step back, believe that the sheer novelty and technological futurity of virtual reality will sell itself. As a result, many marketers, when releasing a new VR-based product, do not fully commit themselves to a complete marketing campaign. This means that they don’t begin with telling consumers why they should be interested in this product. Instead, they jump forward to flashy demonstrations of what the product does. For too many consumers, however, this fails to answer the preliminary questions facing them. As a result, the reaction is one of curiosity but not desire; questions but not answers. Both of which can certainly stimulate sales but fail to truly drive them.
The key to avoiding these marketing pitfalls is to make sure the marketing campaign does not succumb to the twin threats of overconfidence and myopia. Overconfidence is derived from the opinion that a given product will be so well-designed and appealing that development can be prioritized at the expense of marketing. As a result, the marketing campaign is purposely de-emphasized. The logic of this overconfidence claims that the quality of the product will result in viral sales. In reality, this falls short.
Myopia refers to when the development team and management are so focused on the product that they simply fail to allocate appropriate funds to the marketing campaign. This most often happens when the development team and management are predominantly composed of technical experts that lack formal experience or training in releasing products. In such scenarios, companies will only consider the marketing component once the product is nearly finalized. This is often too late to generate sufficient interest levels and is often at a point when the budget is already spread far too thin to support a sufficient marketing campaign.
Having highlighted the negative trends in the VR marketing sphere, it is necessary here to outline the best practices. Virtual reality itself is a very broad field. It encompasses both complex gaming solutions for full-room installations and simple photo-tours designed for cheap VR devices, such as Google Cardboard. Thus, to succeed it is necessary to implement a sound strategy, supported by clear lines of communication, that fits the given project.
First off, the development team must provide the management with a close estimation of the production cost of a potential project. This will allow management to calculate how much profit must be made in order for the project to be deemed a financial success.
From here, management must consult with both the development team and marketing team to devise how the project will produce profits. Simply, this means whether it will rely on a one-time payment, subscription fees, pay-to-play dynamics or advertisements to generate income. To make a decision in this matter, management should request from the marketing team information regarding the current market trends and request research concerning the specifics of the project. From the development team, management should understand how these payment methods can fit within the structure of the product without sacrificing immersion or appeal. Once these are known, a decision can be made regarding how much profit must be made, how much will feasibly materialize, and how it will arrive.
Once the income framework is decided upon, the management and marketing team should work together to quantify how many users are needed to meet the profit goals. This is turn allows an acquisition budget to be made. The purpose of an acquisition budget is to determine how much money should be spent on a marketing campaign to acquire each user. To explain this, imagine a company spends $1 million dollars to acquire $2 million users. It therefore costs the company $0.50 to acquire each customer. The rest goes toward production costs. What remains is profit. This, in turn, allows the marketing team to trace back from the target number of users to determine how much money should be spent on marketing to meet the profit goal.
Once the marketing team clearly knows how much money they have to spend, it is imperative that they refine their target demographics as much as possible. Due to the fact that virtual reality is a new field, marketers must reassess standard conceptions of how certain sections of society will use and purchase VR products. As such, it is important to analyze how different generational blocks of consumers are reacting to virtual reality.
Generation Z constitutes those born after 2000. They are the world’s newest generation. The oldest are in their teens and the youngest are still young children. They have spent their whole lives using technology and screens. They are fluent and capable. For them, virtual reality is not a radical new invention but simply the latest. Thus, if this the target generation, the marketing focus doesn’t need to rely on assuaging fears of nausea or explaining functionalities. This is the generation to whom virtual reality seems like the logical next thing and is a must-have. The key, however, will be to get their parents, who likely straddle the bridge of the Baby Boomers and Generation X, on board.
Both Generation X (mostly in their thirties and forties) and the Baby Boomers (mostly in their fifties and sixties) have some similarities when considered as a target demographic. Both came into digital use after their youth and therefore lack the tech-savvy nativity of their children and grandchildren. Being older, they have also witnessed many fads burn through and many false technological dawns offer nothing. For them, virtual reality could be just another of these. For others of these generations, new technology is a source of unavoidable stress that requires concerted effort and time to use. As a result, a marketing campaign must clearly show why VR is worth learning, how simple it is, and what it offers. Fortunately, the rewards are big. These two generations are the two wealthiest generations and, if captured, provide a lot of upsides.
Millennials, who straddle the gap between Generation Z and Generation X, represent a demographic that is fluent in technology, regularly consumes media digitally, but is also settled in a way of life. Additionally, on the whole, they have less liquid capital than generations before them and lack parental financial support like the generation after them. As a result, products geared toward them must balance affordability and appeal, while having both in abundance. A difficult balance for sure. That being said, like Generation Z, they are more predisposed to virtual gaming and require less emphasis toward why and instead can be drawn in by what and how. This allows marketing teams targeting this demographic to focus more on what makes their specific product unique as opposed to being forced to rely on broad strokes.
As the market for new technologies changes, software development companies must remain abreast of the recent trends. For some, this means modifying their typical marketing regimens, while for others it simply means restructuring lines of communication. As companies do this, it is vitally important that they continually devote resources into researching how specific demographics are reacting to virtual reality.
Virtual reality is a new field that is bringing new questions to the table. If a company is going to spend considerable cash developing a product, they must make that worthwhile by supporting it with a smart and informed marketing campaign.