How AR & VR are driving marketing for the auto industry

Virtual Reality (VR) and Augmented Reality (AR) have now caught the attention of the auto industry, leading to changes in business plan, assembling, showcasing and even the vehicle purchasing experience.

“The auto business is exploring different avenues of AR and VR to fine tune the whole market and supply chain, research and analytics as well as marketing promotional activities. High-security guidelines, advancing client requirements, and cut-throat industry competitions have made it necessary for automobiles to explore different avenues regarding AR and VR innovations,” says Preksha Soni, Manager – Client Servicing, TheSmallBigIdea.

Virtual Ride

Mitesh Kothari, Co-founder and CCO, White Rivers Media, points out that AR/VR has gone through remarkable developments in such a short time, enthusing, “We are seeing brands like Skoda and Volkswagen create VR simulators that present a 360-degree 3D view of their cars. The Audi VR experience is working on creating virtual showrooms where one can see their models with all the possible customizations and even experience pre-recorded test drives.”

“Though the gaming industry was the first to use the potential of AR/VR, other fields are redefining the scope of the technology. E-commerce, Real Estate, Tourism, Retail and even Healthcare industries are finding new ways to provide immersive experiences to their customers using AR/VR tools,” he adds.

Nupur Shah – AVP and Digital Lead, West and South, PHD India (an OMG company), agrees, saying, “Augmented reality-based experiential marketing has been really taking off and a lot of businesses see the value in embracing this unique approach because of its ability to communicate with the audience in a way that feels truly engaging. Following its popularity in the gaming circles, other industries are also betting on newer technologies like AR/VR and Auto is definitely one of them.”

Shah observes that by its very nature, AR/VR is suitably poised to lead this new innovation wave in a world that is headed towards all things digital, saying, “The need for augmented reality-based experiences is very high and since it involves stimulating the basic human senses, it will be fascinating to see how close we can get to replicating that immersive feeling of interacting with a car, in a simulated environment.”

According to Akshae Golekar, Founder & CEO, Optiminastic Media, the automobile industry is the fourth largest industry in the world, and this industry (as well as real estate) are aggressively pursuing AR/VR. “In the space, they already exist, but since Meta was announced in terms of mixed reality and experience reality, which is MR and XR, the interest has increased towards AR and VR, which are the primary elements of web3, and thus brands are leveraging such advertising to create consumer experiences.”

The automobile industry wants its consumers to experience these expensive products first, he adds.

Shah also believes that luxury cars/segments have a bit of an edge over the others since the consumers are drawn towards experimenting with newer technologies and are early adopters in that sense. While there are certain advantages luxury brands have over the others, according to Shah, “I think the customized AR/VR experience is something all automotive brands can make use of since it provides the customers with an immersive experience, ultimately making the purchasing journey for them easier and making things more personal.”

As for Kothari, it’s not just in experiential marketing as the technologies are also used in designing and visualizing the product right while it is being created. With the introduction of 5G globally, the use of AR/VR in the automotive industry is likely to grow even more, he says.

Motor-verse and NFTs

Interestingly, the auto industry is also eyeing the metaverse and NFTs.

As Gaurav Gupta, Chief Commercial Officer – MG Motor India, about the NFT ride and he says with pride: “We’re the first company in the auto segment in India to venture into the NFT space. With Season 2 of our Taal, a national cross-platform talent hunt, having just launched we’ll be working with indie music artists to help them create their own NFTs, which they can sell. The platform is ready, we will be inviting the winning artists to perform on MGverse.”

Noting that music is core to the brand, with the company having enmeshed itself heavily in curated playlists for consumers, its own brand anthems, and other initiatives, Gupta says MG Motors is leveraging emerging technologies to further that association for consumers.

“Another unique element we’ve introduced is that all our showrooms across the country have a huge display screen, which is centrally connected, on which we can have live performances, which our over 100,000 customers around the country can also tune into,” adds Gupta, stating that as MG Motors’ learnings from these new platforms expand, the company will look further at investing in these emerging technologies to better engage with its clientele.

“In the automotive industry, many masstige brands have also been exploring new launches via campaigns that leverage the power of AR/VR/Metaverse to engage with the audience. The use of such technology is still very much in its infancy but in the near future, it will certainly be democratized and made easily accessible to the masses,” says Shah.

Experts agree that through the use of VR, advertisers can increase the number of consumers experiencing their products by eliminating the logistical costs involved in such experiences. However, therein lies the rub, as the technology, while becoming cheaper as it grown more scalable, still requires significant investment as of now.

Budgets Braking?

Soni says, of late, the tech world began to open the advantages behind consolidating AR/VR with AI. Matching the two has the ability to drive advancement, new client encounters, and better approaches for interfacing with our reality. But without high-quality data and research, she cautions that the advancements won’t succeed.

“Another hurdle is the implementation cost that one has to incur to be able to access these AR/VR technologies. A six-figure cost is a bare minimum which ironically is a bigger cost given the marketing budgets for promotions. Leaders battled to track down ways of dedicating currently scant monetary and HR to the execution of AR. It requires investment to prepare or potentially enlist laborers to work complex frameworks, making leaders exhausted of redirecting time and ability from what as of now works or different plans are already in action,” she points out.

Even essential switch VR headset costs are higher than normal embellishments of cell phones and very good quality gadgets going from $2,000. So, AR/VR gadgets are enormously costly for present-day clients. Also, user experience and friendly interface are other hindrances to the wide adoption of these technologies.

Krutin Shah, Co-Founder and COO, Phyvital Inc, adds, “Like any other technology, this one also comes with its own challenges. The most difficult one is the validation from health experts, as AR/VR headsets may cause eye strain and headaches with prolonged use. Further, the limited availability of constant high-speed internet across borders and high development costs are some barriers that the technology might have to overcome. The complexity and cost of VR also affect its widespread adoption, which is crucial for advertisers and marketers.”

PHD’s Nupur Shah has another point, saying, “One major impediment that I foresee is the connection or attribution to lower funnel metrics. Since the technology is still in its nascent stage, it is going to be tricky to determine how we can bring in actual sales bookings if the launch of a new car is done via the Metaverse.”

“However, as more and more people start adopting and accepting these mediums as the new normal in the future, we will definitely see the lower funnel metrics kick in as well,” she concludes.

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