Facebook's virtual reality advertising plans have hit a stumbling block after its first advertiser pulled out.
The company announced on 16 June it would be testing ads in Oculus game Blaston, from Resolution Games. But following a user backlash, Blaston was pulled from the testing programme. The original announcement from Facebook did state there would be "a couple of other developers that will be rolling out over the coming weeks", but these remain unpublicised.
The ads are part of Facebook exploring new ways for developers to generate revenue, a key plank in attempts to create a self-sustaining platform that can support a variety of business models that unlock new types of content and audiences.
Some paying gamers were hesitant for advertising to enter Oculus virtual reality, while others seemed understanding about the need to explore viable revenue streams.
Taking to Twitter, Blaston (@BlastonGame) said: "After listening to player feedback, we realise that Blaston isn't the best fit for this type of advertising test. Therefore, we no longer plan to implement the test.
"To make it clear, we realise that Blaston isn't the best fit for this type of advertising test. As an alternative, we are looking to see if it is feasible to move this small, temporary test to our free game, Bait! sometime in the future."
Ad industry leaders told Campaign that advertising on Oculus held potential, but still had obstacles to overcome.
According to Anna Vogt, chief strategy officer at TBWA/London, the ads in Blaston resulted in customers feeling that their experience wasn't being put first.
"Imagine a Venn diagram," she said. "In one circle you have the spirit of the game, in the other the purpose of the brand. If the two overlap to form a mutually beneficial experience, then in-game advertising can both enhance the user experience and the connection between the player and the brand. But to get to that perfect intersection, you need to be choiceful about the partnerships and ruthless about putting the customer experience first.
"When Reporters without Borders created an in-game library in Minecraft to which they uploaded all of the world's banned books, that made sense from a content, game and brand perspective. Facebook advertising in Blaston, judging by player reviews, was less of an organic encounter. When gamers pay to play, it's vital for brands to remember that they don't just represent themselves but always operate in the name of a good time."
Following the test, Facebook planned to provide more details on when ads may become more broadly available across the Oculus Platform and in the Oculus mobile app. Nicole Guo, gaming SME for APAC, from Xaxis, was excited to hear about how Oculus planned to revolutionise ads within gaming experiences, but said some gamers were hesitant, despite Oculus stating that information processed and stored locally on headsets would not be used to target ads.
She said: "The refinement done on a privacy-first [basis] will very likely address many gaming enthusiasts' concerns about ads appearance during their play. The possibilities are endless, and it'll be interesting to see how brands can innovate and engage gamers in these immersive spaces."
Antonio Dale Forte, IAB UK's gaming group lead echoed Guo's optimism and said VR is an ideal environment due to its immersive nature. Forte told Campaign: "As a marketing channel, in-game's big strength is the level of engagement and immersion it can achieve, so Facebook's news that it will be testing in-headset VR ads on Oculus systems is a really exciting development. Our latest research shows that 63% of gamers are accepting of the advertising value exchange, but it's essential that advertisers contextually enter into the environment and respect gameplay, rather than needlessly interrupting or taking the player out of the experience. It's therefore very encouraging to see Facebook reasserting that it will 'build for people first' within Oculus, particularly given the immersive nature of VR."
Facebook maintains that ads are most effective when they're high quality and relevant, and has said that Oculus ads will follow its advertising principles, the first of which is "build for people first". Users would also be able to manage the ads they see, using controls to hide specific ads or hide ads from an advertiser completely.
Verizon Media reaches more than 92 million gamers across Xbox, in-game advertising and other gaming environments across EMEA alone.
Josh Partridge, managing director UK and co-head of EMEA at Verizon Media, said: "The boom in online gaming and diversification of these audiences has presented new and unique ways for brands to reach people within gaming environments at scale.
"At Verizon Media, our own research around consumer appetite for these kinds of experiences found that 69% of UK consumers are excited about VR and AR, with 66% also saying they now expect their digital experiences and interactions with brands to be seamless, innovative and enhance their real-world.
"The nature of gaming is interactive, and brands need to find ways to be in the experience that set themselves apart and effectively engage with these audiences, that also really add value, or risk disrupting them more than pop-ups on web pages did.
"With 5G connectivity just around the corner, multiplayer and community-based gaming is set to explode further as console-level gameplay and graphics will be available on-the-go as well at home. So understanding gaming – and creating great XR experiences – is really an essential skill to have for brands that want to engage with this huge and growing audience."
Commenting after Blaston was pulled from the trail, Facebook offered this comment: "We offer a variety of tools and support for developers so they can choose to use what's best for their business in the long run – and we support them in what they choose. Ultimately, opening up new revenue streams for devs will help us to unlock new types of content on the Oculus platform and offer products at consumer-friendly prices. Ads within apps are just one of the things we're exploring to help with this."