Fast Forward: What Marketers Need to Know about the Facebook Connect Event
By: Richard Yao
Tags: Virtual Reality, Augmented Reality, Innovation, Technology, Marketing

Fast Forward: What Marketers Need to Know about the Facebook Connect Event

Facebook outlines its roadmap for AR and VR developments

Editor’s note: This is an abridged edition of our Fast Forward newsletter, a fast read for you and an easy forward to your clients. If you wish to receive the full version a day earlier in your inbox, please contact Josh Mallalieu (josh@ipglab.com) to get on our mailing list.

Facebook has always wanted to be a platform company. Mark Zuckerberg is acutely aware that his company’s ad-based business model is always at the whims of the platform owners, most recently demonstrated by a blog post the company published last month decrying Apple’s decision to tighten privacy settings in iOS 14 could cut its Audience Network revenue in half. This deep-seated goal explains why the company has always had the ambition to establish itself as a platform company in the post-mobile world.

The impending paradigm shift in computing interface, from mobile to AR and VR, is one that Facebook is deeply concerned about in its latest public event. Formerly known as the Oculus Connect event, hosted by the Facebook-owned VR subsidiary, the event has been renamed Facebook Connect and is now presented by Facebook Reality Labs, a new subsidiary of Facebook that merges Oculus with its internal team working on AR-related projects.

Compared to the Apple event on Tuesday, which ran a concise 60 minutes, Facebook Connect was over-ambitious and future-forward, laying out its roadmap for its transition towards an AR/VR future in great detail but with few convictions. Over a 100-minute event, Facebook announced a wide-ranging variety of developing projects, upcoming features, and one consumer-ready product — an updated Oculus Quest VR headset. The Verge has a rundown of all the announcements if you’d like to check them out. Here, we’ll focus on the big picture and what it means for brand marketers.

Oclus Quest 2

VR: Doubling Down on Gaming Won’t Solve Adoption Hurdles

The VR industry has been stuck in development limbo for a few years; even the stay-at-home orders didn’t do much to spur consumer interest in VR headsets. Facebook likes to tout that its Oculus Quest headsets have been sold out at many retailers, but the fact that it has so far shied away from announcing an exact sales number has led many to speculate that sales have not been that impressive, and that the sellouts are merely a result of insufficient inventory.

Nevertheless, the lack of consumer interest hasn’t deterred Facebook from its commitment to selling Oculus headsets. The new Oculus Quest 2 is lighter, faster, more comfortable to wear, and most of all, cheaper. Starting at $299, it is the most affordable cordless VR headset and arguably the best one available on the market. The problem, however, is that hardware quality has not been the main holdback for VR adoption for at least two years. Instead, it is the lack of content, especially non-gaming content, that is preventing VR from being considered by consumers outside of gamers and tech enthusiasts.

Given this, it is rather disappointing to see that Facebook is still unsure of how to solve this VR content issue. It attempted to position VR as a socialization channel by integrating its Messenger platform into Oculus Quest’s UI and rehashing the grand promises of Facebook Horizon (which still remains in invite-only beta testing). It argued for the need for “full presence” in this age of Zoom meetings, but the VR solution it proposed seemed a bit far from being deployed at scale. Similarly, Facebook also tried to position Oculus Quest as an essential productivity tool for the future of work with a new “Infinite Office” mode, but only going so far as to reimagine laptop displays as floating touch screens in VR without actualizing the real benefits of working in a simulated environment.

Predictably, Facebook fell right back into the reliable VR game route as the main selling point of Oculus Quest 2, devoting a significant amount of airtime to showcasing a dazzling array of upcoming VR games, including titles from popular franchises such as Assassin’s Creed, Jurassic Park, and Star Wars. While the games do look exciting, and the lower price of Oculus Quest 2 does make it more accessible, Facebook still faces a tough holiday season this year to compete in the gaming hardware market against new-gen consoles from both Playstation and Xbox.

While gaming has been a tried-and-true revenue generator for VR, it inherently limits possible use cases and caps VR headsets’ true potential as the next computing platform. Only by working out how to actualize non-gaming use cases and implementing them correctly can Facebook make a better sales pitch for Oculus and push VR into the mainstream consumer market. Unfortunately, this event showed little evidence that it has found the right ways to do so.

Spark AR platform

AR: Taking a Leap from Instagram to AR Glasses

Compared to its vision in steering VR development, Facebook fared better in terms of AR. Although one could argue that by focusing on VR for the past few years, the reality is that Facebook is cognizant of the rapid development in consumer-facing AR and has been talking about building its own AR glasses for years.

Today, Instagram serves as the primary channel for Facebook’s AR initiatives, which means that the majority of the “1.2 million AR effects” that Facebook claims creators have made with its Spark AR framework are selfie lens and filters. Sure, introducing those AR effects into Messenger and Facebook Portals will help increase their reach, but at the end of the day, they are only the first step toward applications of mobile AR that don’t provide much utility or functional value. Compared to Snap’s AR announcements a couple of months ago, or Apple’s at WWDC, which included things like multi-user AR and occlusion, Facebook didn’t announce any comparable technical advancements for its own Spark AR platform.

Encouragingly, Facebook did expand its AR use cases beyond camera filters. It announced it will bring its existing AR try-on features from Instagram to the newly-launched Facebook Shops to help sellers better show off their products and engage with online shoppers. Beyond that, Facebook is also working with museums and cultural institutions such as the Smithsonian and the Palace of Versailles to capture their collections in 3D and making them available in virtual tours.

As Facebook continues to expand on its mobile AR initiative, it is also actively working to build its own AR hardware. In fact, Mark Zuckerberg kicked off the event with the debut of Project Aria, a pair of camera-equipped smart glasses that Facebook employees will wear in public to gather “ego-centric” location and content data for Facebook’s AR projects. Facebook emphasized that Project Aria is not meant to be a consumer-facing product nor a prototype, but rather a research device to help it advance its location dataset needed to build its AR glasses.

Project Aria

To that end, Facebook also announced it is looking to release a first pair of consumer “smart glasses” next year as a branded Ray-Ban product. Details about what this device will do remain unclear, but Facebook clarified with The Verge that “the device will not be classified as an AR device, and it will not have an integrated display of any kind.” Regardless, it will serve as a necessary stepping stone to Facebook’s eventual AR glasses, where information snippets and 3D virtual objects are placed contextually in the user’s surrounding environments. In addition, by partnering with Luxottica, a leader in premium eyewear, it will ensure its glasses will be fashionable and comfortable to wear for everyone.

Even without a consumer-ready hardware product, Facebook does seem to have a comparatively solid plan to extend its AR user experiences beyond mobile and leap onto AR wearables to establish itself as an AR platform owner. However, given existing public use cases of AR glasses, it does call into question whether Facebook has enough brand trust to convince consumers that their AR glasses won’t infringe on their and others’ privacy. The fact that the well-received Facebook Portal failed to gain market share is perhaps a testament to the idea that Facebook’s reputation is hurting its chances of entering new markets. To their credit, Facebook was self-aware enough to repeatedly underscore the precautions it is taking to ensure transparent data collection, clear controls, and inclusion of all people of all backgrounds, especially non-users who’d be affected. But trust is not easily gained by guidelines; it has to be earned through concrete actions. So far, Facebook’s past track record has shown little to inspire confidence that it could get things right this time. Nevertheless, hope springs eternal.

What Brand Marketers Should Do

Regardless of whether Facebook can successfully push VR into the mainstream or establish itself as a major AR platform owner, one thing is clear from this Facebook event, as well as the Apple event on Tuesday — the personal computing paradigm is shifting and major tech owners are all readying their next move. While there is no tangible immediate impact on brand marketing and advertising at the moment, smart brands know it is always better to stay ahead of the curve.

With an eye on the fast-approaching post-mobile era, now is the time for brands to start exploring AR-enabled brand experiences, virtual events held in games and other immersive environments, and, perhaps the most important and difficult of all, figuring out how to surface your products and services contextually to your target audience, via the best platform, at the right time, and in the right place. An AR/VR strategy should be made today to guide your brand into the post-mobile era of brand-consumer interactions, where contextual relevance and immersive experiences will be key to delivering value and building customer relationships.

If you’d like to learn more about Facebook’s latest announcements and what they mean for your brand, or just want to chat about how to prepare for a post-mobile future, the Lab is here to help. You can start a conservation by reaching out to our group director, Josh Mallalieu (josh@ipglab.com).