What Patrón's CMO learned from taking a chance on virtual reality

Would you pay $1 million for a 2-minute video seen by a few thousand people? Lee Applbaum thinks maybe you should.

There are a thousand reasons for advertisers not to bother with virtual reality yet, from the expense to lack of scale to good old-fashioned skepticism. But as with any new medium, a handful of brands are always eager to go first. This time, Patrón Spirits was one of them  

In 2014, Patrón and digital shop Firstborn began working on a virtual reality experience that would bring viewers into the brand’s Tequila distillery in Jalisco, Mexico — from the point of view of a curious bee. Shooting required a custom-built drone outfitted with seven GoPro cameras, and a lot of trial and error. To achieve the seamless transition from room to room, the team would have to combine live action and CGI — something that had never been done before, and that even people at Oculus Rift said was not yet possible.

But in May 2015, "The Art of the Patron" made its debut, and cemented Patrón’s (and Firstborn’s) reputation as a VR pioneer.

Campaign spoke to Patrón CMO Lee Applbaum about why he took a gamble on VR, what he learned from the experience and what advice he has for marketers thinking of taking the plunge.

How did the VR experience fit into your objectives for Patrón? Why do it?
For us, it all links back to our brand challenge. We have almost 70% share of the ultra-premium tequila market, nearly seven times the closest competitor. We have unparalleled brand awareness, brand affinity and loyalty numbers. We’re regarded as a very cool brand. The challenge is to make sure consumers understand that for all our swagger, there is substance to the brand as well.

Hacienda Patrón — the place where every drop of our tequila is made — is this really magical place where the brand story comes to life. We’re fond of saying if we could take every single bartender, buyer and consumer there, we would have 100% market share. Because we make our tequila at scale, but we use the same attention to detail that you would find in a small craft or boutique operation. VR provided the next closest thing to letting people visit us at the Hacienda.

VR is obviously not a way to reach consumers at scale yet. Who was your audience for this?
The trade is our first line. By that I mean bartenders, mixologists, servers, key influencers and buyers, the folks who are buying our product that ultimately gets into consumers’ hands. If a consumer walks up to the bartender and says, "I’ll have the Patrón," and the bartender says, "Oh yeah, that’s very popular, but you know it’s a mass-manufactured tequila," we’re dead at point of purchase.

It’s key for us to have those influencers go through this Oculus experience, take off those goggles and go, "Oh my God, this really is a handcrafted tequila." So when the consumer walks in and says, "I don’t drink Patrón because it’s not handcrafted," the bartender goes, "You know what? It actually is."

How have you been making the VR experience available?
Our sales people have VR units, as do my marketing colleagues and our partner agencies, which has allowed us to introduce it at consumer events, with bartenders and beverage buyers, in retail stores, at trade shows, in distributor meetings, at duty free shops in airports and in media offices. I don’t have a hard number how many people have experienced it. Whether it’s in the tens of thousands is hard to say. Thousands easily.

The next level down is an iOS app, which obviously is not immersive, but you can use the gyroscope on the iPad and the iPhone and still get a pretty robust experience. That allows one of our sales reps to walk into a bar without the big headset and just hand it to somebody and let them go through the experience. I would say thousands more have experienced that.

The third level down, which I would say is not at all VR but leverages the same platform, is what you see online, a drag-your-mouse approach that conveys the same information but in a less immersive way.

Do you bother to measure ROI on this, and if so, how?
It’s definitely difficult to measure true ROI. You get the anecdotal feedback. And we have a massive social media presence. So you’ll see people talking about it. "Wow, I just went through an Oculus experience." But how you then draw that to truly changing bartender and consumer behavior is very difficult.

The remit was that — whether it’s a consumer, a bartender or a key influencer — when they took those goggles off, they don’t just say "wow" because VR is so nascent. What I really need them to walk away with is, "Wow, I didn’t realize that you made tequila this way." Or "I have heard you talk about it, but I had no idea." If that objective was achieved, then the VR investment had the ROI we were looking for.

Any plans to do another one?
When we shot this with Firstborn, we shot it in 4K. The funny thing was you’d look at it on a 4K monitor and then run it through Oculus and the immediate reaction was, "Oh it looks so grainy and low-res." The video itself is higher resolution than the hardware can support right now. The good news is, fundamentally, our process has not changed. The experience has a shelf life of many, many years. I think the hardware has to catch up to it.

I think now with Oculus’ recent release, the technology supports not only a higher resolution video, but also your hands can now play into it. You can actually move while wearing the goggles and get closer to an object or further away from it. That’s the 2.0, and I can say without hesitation, that will be the next step for us.

I’m sold on VR for us if it continues to deliver the kind of results that we had intended.

What advice would you give other marketers who are considering jumping into VR?
Number one, be very thoughtful about who you partner with. I think there a lot of folks who suggest that they have a competency or even an expertise in this area. There are a lot of people doing it and not doing it very well. Firstborn is a great example of a partner who dared to dream but had the presence of mind to say to us as clients, "Here is what’s realistic." Together, we had this vision of CGI and live action coming together, which a year ago had not been done yet. Occulus told me it couldn’t be done yet. But I’m really, really proud of my team and Firstborn for delivering something truly innovative.

The second thing is expect to spend a lot of money. This is not something done on the cheap.  I think a brand would be naïve to think that they could do it for less than seven figures, especially if they expect there to be some widespread distribution on it.

The Virtual Reality Report

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