Peder Sandqvist - DigitasLBi at CopenX, September 2016

Hi, everybody. Thank you all for showing up here today to enjoy some nice VR and hopefully enjoy my little journey into the world of VR and marketing and how we can marry these two things in a nice way. So my name is Peter and I work as head of VR and AR at the digital agency DigitasLBI. So Digitas is quite a big agency. We have offices all over the world and we basically help businesses transform and adapt to the digital age in different ways. I have a background as a 3D artist working in the VFX industry for almost 20 years. I started doing 3D work in 1993 and I've been doing it ever since. And it's quite exciting times now that VR and AR is kind of invading the world and finally my skills come to great use. So I've been kind of doing this while everybody were doing mobile and the web and sitting on the sidelines. But now that VR and AR is becoming a thing, these skills all of a sudden are very important. So at Digitas we also believe that VR and AR will transform a lot of things moving forward. Of course we believe that VR and AR is the next big platform. And we're not alone in that kind of thinking. We're seeing how all the big tech companies like Google, Samsung, HTC and others are investing in this area. And basically this is because we all believe the same thing, that VR and AR will transform how we live our lives in the future. And the biggest reason for this, we believe, is that something that happens in VR, you don't remember it, it's something you've seen. You remember it like something that happened to you. And this has kind of a profound effect on how these experiences actually affect our emotional senses. And as you know, marketing is all about making people feel. And with VR we have this unique platform to actually make people feel in different ways. Therefore we believe that VR and AR can be the ultimate form of digital communication, at least until we have some sort of thought transfer chips or something like that or similar. So we believe that using these technologies and using this kind of storytelling, we can connect with audiences in ways that we've never been able to do before. And in marketing, we feel that a lot of the things we do are about triggering people's dreams and kind of making people feel that their dreams can come true in different ways. And with VR, we see that we now have the possibility to kind of design and distribute dreams. Because what you experience when you're in VR or AR is very similar to a dream or a daydream. So this of course sounds great. So how do we now just create those dreams and distribute those dreams to people? That's where it starts getting a little bit challenging. And what we're seeing is that it's really difficult to produce VR content. So I have this slide. Don't take it too seriously. But you know, we think, you know, it's quite easy to think something. It's a little bit harder to write it down. Try to put it into a drawing, combine that, make a movie, create a web page, create apps, combine all of these things and create 3D content like Toy Story or something like that. And if you combine all of these things in a great way, you could create computer games. And that's kind of the pinnacle of production complexity we have right now. Because you have on top of having to create the story, storyboard the story, put it all together, make it all work, you need to make it all 3D, you need to make it interactive, you need to make it react to whatever the person is doing in that world. And of course with VR, you add the complexity of how do we make people feel a certain way in this world and how do we make people interact with this world in a way that feels natural to them. So we see VR production complexity as being through the roof. And this is kind of also the reason why today we're seeing a lot of, especially agencies, talk a lot about VR, but we're not seeing so much work actually being done. Because it's easy to have ideas, but it's way harder to realize them in virtual reality. So we were thinking a few years ago about how would we approach this? How can we kind of break through this problem of production complexity and also being at a state where we know nothing about VR? We need to learn about this medium as we create stuff. So we just decided to create stuff. And we started doing that about three years ago. And as you can see here, I have the proper training, 12 years of doing Lego every day. It's quite interesting because creating stuff in Lego when I was younger, I was creating worlds and with my imagination, I would step into these worlds. And what we can do with VR and AR right now is exactly the same thing, but we can do it on a completely different scale. So I think it's quite interesting to see that what I was doing in the 80s, we can now do for real and let people into these worlds that we create. So I made this small video to show how we work in our VR lab at Digitas. And enjoy. So this whole journey actually started around three years ago. Which I usually say is around 300 years ago in VR time since everything kind of develops so quickly right now. And we were backers of the original Oculus Rift Kickstarter project. And we had these Oculus Rifts laying around the office. We were doing the usual thing of downloading roller coasters and putting people into the roller coaster and watching them fall down for about six months. And then we felt that we've done enough of that. And as we were working with Volvo at that time, we felt that it would be quite interesting to see if we could use this technology to actually create an experience around their cars. So what you're seeing here is one of the first kind of spherical renderings we made. And we just put that on a sphere. And we put ourselves in the middle of the sphere and we're looking around and it's horrible, but it's still interesting. Image quality of the original Rift, no proper stereoscopic effect, nothing like that. But it was still quite intriguing. So we started thinking about how we can make this into a premium VR experience to actually help launch a new car. And it turns out that was quite difficult. So this is three years ago and all the software were kind of alpha versions. We were working with the Oculus HD prototype that was kind of breaking down every two days. There were no proper software to use. And we had no idea what we were doing. We just felt that combining 3D and this car in some way could create an interesting experience. So we kind of locked ourselves into the basement for four months. We started flying the shuttle to Los Angeles to meet up with Oculus and Palmer and the team there. They were about 20 people at the time, which is quite different compared to today when they're owned by Facebook. And we just felt that we could create something with these technologies, but we didn't know how and what we would make. But over time we came up with an experience to showcase the all-new Volvo XC90. And it looked a little bit like this. So we created this world where the new car is actually being built around you as you sit inside the car. So it starts with nothing and it builds up around you piece by piece. And the feeling of being in this transformation was quite unique. You felt like you were in the middle of a Transformers movie playing out slow-mo or something like that. But we could also here have the opportunity to actually have people experience the car in a setting that is quite different from a crowded showroom or a crowded car show. We could actually let people experience the car in the landscape in which it was created. So we would teleport people to the beautiful nature of Sweden and you could kind of experience the car in a completely different way. We're doing a lot of things here and not showing the whole thing, but this was quite interesting. The next question, of course, was how do we put this VR experience in front of a lot of people? And we didn't have any gear VRs or anything at that time. The cardboard was two years away. And we only had the Oculus DK2 to play around with. So it turns out we needed to get a lot of stuff. So we got a lot of stuff. So I think we bought thousands of kilos of computer equipment so that we could actually set up and show this experience at events. So we started thinking what would the perfect event to use this technology be? And we found out that car shows are kind of crowded and there's cars and people just everywhere at these car shows. So it's not a very pleasant place to be. And all the car brands go there. They bring their complete lineup of 30 cars. They put them on display and they give you free drinks and hope for attention. So it's kind of a rough environment to try to stand out as a car brand. So what Volvo did at the Paris Motor Show was quite daring. They actually put one car in their whole show area. So they bought the biggest space at the Paris Motor Show and they put one car there. Of course, this was unprecedented. People had never seen anything like this before. And the results were quite astounding. So what happened was that this one car and the Volvo show area was crowded constantly. And you had a constant flow of people. And it was really, really hard to experience the new car without having people trying to climb over you, somebody crawling under the car, two people sitting in the luggage compartment and stuff like that. So it was quite crowded and quite hard to get a sense of how this car actually feels in reality. The interesting thing with VR was that, of course, we could then put four more cars on display. So in total, Volvo actually had five XC90s, even though four of them were virtual. And a big difference as well is that in that room you could experience that car in total tranquility. And we even had air conditioning units and so on. So you get the perfect Swedish summer temperature and stuff like that. So it was a really refreshing experience to go into this room where you would feel safe and you could actually experience the car like magic. The results, of course, were quite interesting. We had a two hour line for this experience for a total of 17 days at the Paris Motor Show, as word spread around the show floor. And after that, the experience has been touring the world ever since. And I actually saw it for the final time this spring in Stockholm at the Eurovision Song Contest, where Volvo were showing it for, I think, the final time since it's 250 VR years old now. I think it's time to retire it. But it toured the world with Volvo Ocean Race, all the major car shows ever since. And it's been a huge success in terms of winning awards and stuff like that and recognition for our team. So we're very happy that Volvo had the courage to actually do this. At that time, not a lot of brands were doing VR, and Volvo felt that they could actually pull this off. And they had a lot of trust in us, and we did it together. So it's an interesting story how you can use VR to actually display products in a new way. This summer, we worked with the Chinese startup OnePlus. They are selling a very, very nice Android phone. I'd say if I wasn't an Apple fanboy, I would probably have the OnePlus phone. And they have very loyal fans. So whenever they present a new phone, they end up with a lot of people wanting to buy that phone. And since they're a small startup company, they can't do enough production beforehand, so they always end up with very, very prolonged delivery times. So in the past, they've had an invite system where people need an invite to buy the phone for the first three months or something like that to kind of keep demand at good levels. This year, when launching the OnePlus 3, OnePlus wanted to get rid of the invite system, but they wanted to create another system to let people buy the phone. And we decided with them to make it a fun VR challenge to actually buy the phone. So what OnePlus did was they actually launched and sold the phone in VR. Of course, this didn't help. Still too much people wanted to buy the OnePlus 3. And a few weeks ago, they had to stop sales in Europe and Hong Kong because they can't make enough phones. But let me show you a short case video. How do you get advertising skeptical tech enthusiasts excited about the new smartphone from the global technology startup, OnePlus? You push the technological boundaries of both the product and the way you market it. So for the launch of the new OnePlus 3, we pushed accessible VR technology to the outer limits. We created the Loop, a never-ending immersive experience that takes place on a space station 450 kilometers above the Earth's surface. Inside the Loop, you could explore the key features of the OnePlus 3 and even order one in the virtual world and then have it delivered to the real one. With stereoscopic CGI, 360-degree film and 4D sound, we merged a melange of 10-second long animations into a seamlessly looping VR universe where our audience wanted to spend their time. Built entirely out of lightweight looping animations, we overcame video size barriers and compressed the entire experience into an easily downloadable app. In the first 24 hours of the launch, 58,000 people downloaded the Loop, and they spent an average of 16 and a half minutes immersed in our OnePlus universe. In the first hour, 10% of users bought the phone in VR. In six hours, conversion grew to 30%. The Loop. A VR experience from OnePlus. It's about time. What's quite interesting here is that we could actually see people step into the virtual world and actually buy a product right in there. And I think we'll be seeing a lot of interesting V-commerce applications moving forward. If you think that in-app purchases today is problematic, I think you're in for it with in-VR purchasing from here on. OnePlus is a three-year-old company, and it was quite exciting to work with them. We're also working with older companies than that. We've been working with Husqvarna for a long time, though not since they were founded in 1689. But they're quite an interesting company. Husqvarna is a power tools company. They create power tools for outdoor environments, such as lawn movers, different power tools, and so on. They are a company that is over 200 years old, but they're still innovating. Husqvarna is innovating in robotic lawn movers. I don't know if you've seen the auto movers, but they were the first lawn mover brand to actually launch a robotic lawn mover about 20 years ago. And together with Husqvarna, we wanted to explore how we could use VR to actually open up doors to new consumer categories for them and also build a platform to create experiences that can enhance the use of their products into the future. Husqvarna is part of something called the World Logging Championship. This is where loggers compete in different categories. Where they strip trees from limbs. They do all sorts of stuff. One of the most popular categories of logging is called limbing. Have a look here. So this is actually a sport. There's pros, apparently. And every two years, the World Logging Championship happens. And this is kind of the flagship category in that. And we felt that it would be quite interesting to put this experience into the hands of people that would never ever have that kind of experience otherwise. And of course, it's very dangerous handling a chainsaw like that. And for example, at the World Logging Championship, the audience tend to drink a lot of beer. And beer and chainsaws is not a very good combination. But what if with VR, we could recreate that experience and combine beer and chainsaws in an exciting way? So we started experimenting a little bit with this in our labs. So here's a video from April this year. And here's my colleague Martin. And we're kind of exploring how we could use VR to replicate this experience and put it into the hands of a lot of people. So we decided together with Husqvarna to actually make this into a game. And two weeks ago, we launched Limberjack. And Limberjack has now been available on Steam. Since about two weeks back. And we're seeing some tremendous engagement with this new platform for Husqvarna. We're seeing a lot of virtual limbers coming live out there. And me and my colleague Martin, we were the previous world record holders. And we actually had the best time we had was 12.1 seconds. And we were kind of wondering how long it would take until some logger, gamer out there would beat us. It took three days. And he is now at 11.6. And we spent four hours yesterday trying to beat him, but we couldn't. So it's quite interesting to see people out there playing this game, sharing content. We can see here that Aerego is very, very happy because he's writing, Joe's score took some beating. I now hold the golden chainsaw. And we actually made it so in the game, so that the person that is on top of the global scoreboard always has the golden chainsaw. So people out there are now competing to hold that golden chainsaw. And of course, there's opportunities in that moving forward as a platform to do charities, to do other type of engaging experiences inside of this world. We also made this stupid little game that if you get pissed off and throw your chainsaw into the lake, you'll get a marking telling you how long you threw the chainsaw. But don't tell Husqvarna that they don't know about this yet. So and we spent days throwing chainsaws and my record was 65 meters. This guy, second day, threw the chainsaw 188 meters. So I have a feeling that my arm will be quite sore after this upcoming weekend. And of course, we're seeing a lot of interesting engagement in terms of comments and so on on Steam. We're seeing mostly positive reviews. Some of the users on Steam don't like marketing experiences on Steam. We've seen that with the IKEA VR experience that people are like, get that marketing out of Steam. But most people seem to be happy that it's a free experience. They don't need to pay 25 euros. They can just download this on behalf of Husqvarna and have a fun login competition at home at any time. As for PR, of course, it's an interesting way for Husqvarna to position themselves as the most innovative brand in their category. We're seeing a lot of coverage in channels in which Husqvarna don't normally get coverage, such as Adweek, but also in the tech press. So we're seeing publications like The Verge and Gadget, et cetera, to give Husqvarna coverage that they would never otherwise get. And VR then is an interesting way to reach into new channels and actually engage with new audiences. And we're seeing here how you can do that with VR in quite interesting ways. Husqvarna, of course, has also built their own virtual chainsaw. So we have integrated the Vive controller into a mock-up chainsaw. So at their events around the world, they can now invite their fans to try out Limbing wherever they go. So they now have a number of kits like this that fly over the world for dealer events, VIP events, sales events, things like that. And we think that is quite interesting as well, using this VR platform as a way to make people experience the Husqvarna brand in a way they've never done before. So I don't know about timing, but I'm about to conclude quite soon. I want to just end the presentation with a few of our key takeaways from now working with the VR in the marketing business for about three years. We believe that moving forward, consumers, people will expect great branded VR content. It might not always work, but we'll see a demand from consumers to actually see this kind of communication that they can immerse themselves within. But even though you can do VR, we don't want brands to do VR just for the sake of doing VR stuff. So I think it's really important for brands and agencies to be quite aware and only try to use these technologies and communication methods where it actually makes sense. Also, brands need to invest in quality because people really love good VR, but it's really horrible with bad VR. Having somebody stand in line for an hour to try out your great VR experience and then feeling sick in 20 seconds is not the best way to promote your brand. So keep that in mind. I think it's time for brands to start investing in a long-term VR and AR strategy. We saw a number of years ago when social media started to grow into something big that it took a while for brands to actually adopt this new way of communication. And we're seeing the same thing in VR right now, but give it a few years and I think a lot of brands will actually have a long-term strategy how to invest in this area. I think it's quite important at this point that you dare to experiment. There's so much that is unknown in this business, both in terms of technology, but foremost in terms of how we actually affect people and how you actually create experiences that trigger different emotions and how we create interactions with these virtual worlds. So I think any brand that moves into this area needs to have a lot of courage and dare to experiment with a lot of different things. And I just want to summarize this. We believe that VR and AR has a very bright future and our position is that we just want to work with anybody that enjoys VR as much as we do and start creating the future together. Thank you. Perfect. Thank you. And we're really great to see things like these brands. In your opinion, we've seen buying experience. I know all Audi doing the same, trying to sell their cars in virtual reality. We've seen it before in Second Life. You can buy stuff and you could buy stuff in Second Life. We know where Second Life is today. In your opinion, is it about buying the buying experience or telling the story? I think it's both. I think if you can tell a great story, it's so much easier to make somebody want to buy something that you want to sell. So I think it's a combination of both in terms of these like car configurators and stuff like that. Of course, we are experimenting heavily with as well, but I can show anything here. I think we're seeing how people are more emotionally than they're so emotionally engaged that it's easier to reach a buying decision when you have a very immersive experience. But of course, it can swing the other way. If you create a bad experience, you will scare people away. It's quite binary. You need to do really good stuff in order to have the kind of effect that you want. But can all kind of brands do VR experience? I'm sure there is brands. It's hard to say. I would say any brand can do a VR experience because there is always an infinite number of stories to tell. And I think that's the way it is. I would say any brand can do a VR experience because there is always an infinite number of stories to tell. And I think it can be applied in different ways that make sense in different places for sure. All right. Yeah. Thank you, Peter. Thank you.