Facebook will begin testing delivery of targeted VR advertisements in its Oculus Quest headsets, starting with Blaston, a VR shooter developed by Resolution Games. A Facebook representative told Upload VR the ad system will target ads based on first-party data from users' Facebook accounts and some device data. Per an image in Facebook’s blog post, these ads are apparently embedded within VR experiences, not unlike ads in traditional video games.
The addition of targeted ads could help Facebook monetize VR and loosen Oculus’ dependence on Facebook’s more profitable ventures. Despite dominating the consumer VR market, Oculus has yet to truly monetize its growing platform. Facebook historically has used the revenues generated from its more profitable segments to prop up its VR business, a practice that’s drawn the ire of critics like HTC’s VP Dan O’Brien, who accused Facebook of creating “artificially subsidized price points” in the consumer VR space. For context, Facebook’s hardware sales (including Oculus) made up just 3% of Facebook’s total revenues in Q1 2021. Facebook believes integrating ads into VR could help make the business a “self-sustaining platform.”
Facebook’s recent rapid acquisition of VR software developers could enhance its ability to develop its own VR experiences with seamless ad integrations. Since the start of June, Facebook has acquired BigBox VR and Unit 2 Games, further bolstering its portfolio of VR developers. Facebook can lean on these developers to create VR experiences with “unobtrusive” ads built directly into games or other VR worlds.