For the first time, SXSW launched a new track focused on VR/AR this year in Austin. The now 30-year-old festival had at least 100 sessions, lounges, events and exhibitions dedicated to VR/AR. These experiences ranged from brand activations, such as McDonald's immersive Happy Meal VR experience, to numerous panels discussing VR/AR's impact on storytelling, travel, music, sports and fashion. Replete with VR/AR experiences, SXSW and events like it play a large role in bringing VR/AR to the mass market. In this post, I lay out the top 5 things I learned about VR/AR at SXSW.

1. Consumer brands will be the biggest drivers of VR/AR mass market awareness

VR/AR has been surrounded by so much hype in the last two years. With the imminent launch of major VR headsets, the buzz has grown even more in the last few months. While VR/AR is a hot topic in many industry circles, and gamers are eager to get their hands on it, the majority of consumers have little awareness of VR (and presumably, much less of AR). In a survey conducted by Greenlight VR in October 2015, 68% of U.S. consumers said they know a little about or have never heard of VR. This number has probably gone down since then, especially as consumer-facing brands have embraced (and are racing toward) VR/AR as the next medium for consumer engagement. At SXSW, I tried the VR experience at the McDonald's lounge. With the Vive headset on, I was transported to inside a Happy Meal box and was given a palette of patterns and colors, tools (including a laser pointer) and the creative freedom to design my Happy Meal box. My masterpiece was then sent to me as a GIF, ready to share with my social network. Activations such as this get people excited and encourage word of mouth. With experiences done well, marketing dollars and association with popular consumer brands will continue to help drive the mass market awareness the industry needs.

(Click here to view graphic)

2. Location-based or out-of-home entertainment experiences will be the second

With many of the major headsets launching with steep prices and low levels of consumer awareness, location-based entertainment (LBE) can help bring VR experiences to consumers. LBEs, in this context, include theme parks and pop-up installations. A number of VR theme parks have been announced or are already in development, including The Void in Salt Lake City and a VR arcade in Los Angeles. Samsung and Six Flags recently partnered to put the Gear VR headset on the first VR roller coaster. While SXSW is an event and not so much an LBE, there were dozens of pop-up installations that gave many attendees their first taste of VR/AR. For example, in the photo below at VNTANA's augmented reality installation, my colleague is projected in real time as a hologram as she controls the hologram of the new DJI Phantom 4 Drone.

(Click here to view photo)

3. 360-degree videos are cool, but more will be needed to take the industry beyond this phase of sampling

360-degree videos are now available to the masses via Facebook, YouTube and other platforms. When I skim through the comments on a Facebook 360-degree video, or show somebody a 360-degree video for the first time, the response is almost always that of fascination and wonder. The first 360-degree videos released (such as this one from Discovery) and the brand activations and LBEs mentioned above, all provide the mass market with opportunities to "sample" VR. These are usually one-off experiences that wow the audience and that drive awareness. But, awareness alone will not lead to purchase. Consumers need a reason to purchase VR headsets and experiences for themselves, and to keep coming back to them. Consumers will need to have an emotional connection or a clear understanding of the value proposition. In addition to affordability, accessibility and comfort, this will require ongoing development and experimentation of storytelling techniques in 360, and, more importantly in my opinion, development of more and better interactive experiences in VR/AR—whether for entertainment, communication or productivity.

4. VR/AR is the new frontier for advertising

At SXSW, you didn't have to look very hard to find VR/AR experiences. Many were brought to you by brands, including McDonald's, Gillette, Dell and Samsung. Gillette partnered with DiscoverVR to take users on a virtual ride through the mountains, while Samsung (promoting its new Six Flags experience) allowed users to experience Six Flags' popular Tatsu roller-coaster ride in the Samsung Studio. Many of the VR experiences available to consumers today on YouTube or VR app stores are productions paid for by brand advertisers. VR advertising currently uses models similar to online video (pre-rolls, product placement and branded content or native advertising), but there are key differences in the consumer experiences and in tracking. With online ads, brands struggle with viewability and ad-blocking concerns. In VR, eye-tracking technology can tell us where a user is looking and for how long. While VR provides a more immersive and experiential means of marketing, this same immersive nature increases the risk of highly disruptive or intrusive advertising that can turn consumers off to a brand. Today's AR advertising consists of superimposing digital information on real-world items that you point your phone's camera to (the QR code is an example of an AR application). Due to practical limitations, this has not garnered wide popularity. However, the future of AR could have broad applications for advertisers as it enables brands to augment all their marketing channels, especially the physical (brick-and-mortar, print, billboards, etc.), with additional content, improving engagement and measurability.

5. In the future, display will no longer be limited to screens

In the last 50 years, our interaction with all things digital has been via 2D screens, the screens on our TVs, computers and, most recently, mobile phones and watches. VR/AR eliminates the need for these rectangular screens and enables us to work with digital information and functions in the real world (or for the closed VR experience, in a 360-degree virtual world). With AR, imagine watching a sporting event live in person and being able to pull up player stats, not on your phone, but in your field of vision as you watch the player in action. Face time and Skype sessions will also be transformed, with holographic projections of your meeting attendees or loved ones from your smart device. VNTANA's technology on display at SXSW, mentioned above, demonstrates the early stages of this type of exchange.

Extra: Scenes from MDM's SXSW Event

During this year's SXSW, MDM joined Siemer & Associates, Delta, BridgeBank and Draper Venture Network to host our annual digital media event, the SXSW Social Hour, at Austin's Péché. It was a great event—a full house with attendees including media and tech executives and members of the VC community. The first photo below shows the line outside the entrance shortly after the event started, and the second is of the MDM team in the crowd.