Tony Parisi is the Head of AR/VR Ad Strategy at Unity Technologies, and he’s committing to taking an ethical approach to advertising. Much of the advertising at Unity is done within the context of a mobile game, and so there is less pressure to fingerprint and profile individual users. I talked to Parisi about how he draws the line of what to track and what not to track, and he said that currently they’re tracking very little of individual users and rather focus on embedding ads within the context of a game. In free-to-play games, players are gated with ads that they have to watch in order to get back to their game, which means that they have an extraordinarily high completion rate of their ad units.
I also talked to Parisi about his efforts in augmented reality advertising, and how a lot of advertising agencies are being asked to define their AR strategy now that AR Kit and AR Core are being deployed on millions of phones and tablets. There is more and more of a market to explore what’s possible with AR ads, and he shares some of the highlights and types of AR ads that are working well. There’s more and more ways that immersive storytelling are starting to be integrated within the advertising space, and battery draining intensity of AR is less of concern with these short-form experiences that are also limited to around 5 MB in size. It’s still relatively new medium and communications modality, and so Parisi is spending a lot of time networking and educating advertising agencies in New York City.
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Rough Transcript
[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to the Voices of VR Podcast. So continuing on in my series of looking at XR ethics and privacy, today's conversation is with Tony Parisi. He's the head of AR VR ad strategy at Unity Technologies. So this is a conversation that happened at the green light VR strategy conference. And I always love to go to that conference just because there's a lot of really great people to run into and chat. And it's not a huge conference, so it's a good chance that you're going to be able to have some really great conversations. And so Tony, somebody who I've talked to a number of times over the years, and he's somebody who comes from the open web. So around three years ago, I guess he decided to make the jump from the open web and move into working more directly with unity and working with their ad strategy there. So he talks a little bit more about that context of why he made that decision and why he thinks that that's going to be the best thing that he can do to be able to support the creation of these immersive experiences. And, you know, there's certain aspects of advertising that I think that there's a number of ways that you can go in terms of like surveillance capitalism and doing all sorts of tracking of user data. And that's something that I think generally people say that's a bad direction to continue to go on, especially when it comes to immersive technologies. And so Tony is somebody who recognizes that and he wants to see if there's another option to be able to do maybe a little bit more contextually aware advertising. So it's within the context of a game. And if you can characterize the elements of that game and be able to serve out ads in that specific way, then maybe there's ways to be able to get out your message in a way that is directed more towards the context that you're in, rather than for you as an individual, more of the content in the context that you're playing within the context of that game. So that's at least part of the strategy I think for unity and they serve like over a billion ads a day or so So there's there's quite a huge market and really bootstrapped by Mobile gaming and unity being a big part of that and the ad strategies being a big part of how they're really growing as a company So we'll be covering that and a lot more about actually AR advertising, AR storytelling, and what's it take to create a good AR ad. That's a whole other aspect to this conversation as well. But I wanted to include it here just because there's this element of, is there a way to do advertising that doesn't necessarily go down this dark path? So that's what we'll be covering on today's episode of the Wasteless VR Podcast. So this interview with Tony happened on Wednesday, October 16th, 2019 at the Greenlight XR Strategy Conference in San Francisco, California. So with that, let's go ahead and dive right in.
[00:02:40.061] Tony Parisi: I'm Tony Parisi, head of VR and AR ad strategy at Unity Technologies. Unity is the platform that most people use to build their VR and AR. What a lot of people don't know is that we also have a global advertising platform that reaches 1.7 billion people every month, and I've spent the last couple of years working on introducing augmented reality into that advertising platform. to help brands engage with their customers, their potential customers, in new and exciting ways. It's been a really wonderful journey, and I'm learning a lot every day. And I'm learning about the ad business. That's something I didn't know about a couple years ago. So that is what I do at Unity these days.
[00:03:16.625] Kent Bye: Great. And so we've talked a number of times over the years, but I'm just curious if you could give me a bit more context as to your background and your journey into immersive technologies.
[00:03:27.438] Tony Parisi: So I've been working in immersive tech for the better part of 25 years. Originally created something called VRML, which was the first way to put 3D on the internet back when people didn't have broadband and JavaScript was just getting started. It was a bit early, most people didn't even have a computer that could do this that well. Powered by a lot of visions, visions maybe for the metaverse, you know, how we could communicate socially with 3D computing. Also, even back then I was thinking about marketing and advertising use cases, because my point of view on this has always been that 3D and real-time 3D is a media type. And you can do anything with a media type. You can tell a story, you can play a game, whether it's print, whether it's visuals, you know, 2D visuals, 2D animation, or real-time 3D. So I was always excited about that stuff, and through the course of that two-plus decades, I've spent some time working in social gaming and non-gaming applications, all kind of with a lens on bringing real-time 3D to more people. And so that ultimately led to me joining Unity three years ago when Unity's business started expanding beyond the game business. Because here's a company that's got the predominant real-time 3D engine that was forged in the video gaming industry, but when VR started to hit big, Unity discovered that there were all these other use cases for it and customers were coming to us from every industry, automotive, medical, architecture, to use this technology to be better at their jobs, to improve safety, to communicate in different ways, to look at designs together. And that brought me to Unity because, again, my expertise is much more about real-time 3D and non-game use cases, and Unity was looking for someone who had a feel for that to look at some of these other industries. And so the last three years have been amazing because the things I've been working on, on and off for the last 20 years, are kind of coming together. The compute power is cheap enough. We have all these amazing devices in our pockets. VR headsets are getting cheaper all the time. Mixed reality hardware is really invading in the enterprise especially. And so we're just seeing so much uptake now and it's coming from all directions, even though I think any of us who've been in the industry the last few years have seen fits and starts, the hype around VR and all that. But I think we're coming around, we're seeing new devices like the Quest, and we're seeing use cases in every industry, and entertainment, marketing, the stuff I'm working on now, these more industrial use cases, and it's just a really exciting time. I'm probably more enervated and energized than I have been. in a while about this, and that of course has been punctuated by periods of being jaded from time to time, but right now it seems pretty exciting. I feel like we've gone a little bit past the VR hype bubble correcting, and we're seeing a lot of industriousness and innovation in that area still, and I think it's a great time to be working in this field.
[00:06:20.113] Kent Bye: Yeah, like three years ago, I remember that the Oculus Connect, it must have been three, where you had a demo that was up on stage that was with WebVR. And then very soon after that, you had maybe going to start a whole WebVR company and then pivoted into doing Unity. And I also think back to Silicon Valley Virtual Reality Conference back on May 19th and 20th, 2014, where I saw during the 60-second pitches, there was Vlad Vesovich saying, we're at Mozilla, and we're doing VR on the open web, before web VR had actually been formalized into the spec. And then I remember talking to you at that conference as well, talking about the open web. And so you're coming from this background of, VRML, making the specifications for how you could have spatial computing on the web. And then now, with the last three years, moving from, I guess, the open web into the more closed platform, but needing to find a business model. So I'm just curious to hear your evolution of the moment that you decided to pivot from all this work in the open standards and trying to live into this open web vision, but why you felt it was important for you to go into Unity. And Vlod also ended up at Unity as well. So there seems to be some movement towards people who had that vision, but now are trying to create the infrastructure.
[00:07:36.625] Tony Parisi: Yeah, not only Vlad, who of course created WebGL, is working at Unity, but Martin Best is running product management for a lot of our products. He was also at Mozilla for many, many years. I can't speak for them, but I can tell you how I feel about this and what brought me to Unity. I really saw an opportunity here to continue the mission that I feel like I've been on this whole time around democratizing creating 3D content and distributing it. And one can argue pro and con about web versus in-app, and there are all kinds of nuances and subtleties to that. I'm happy to, you know, sort of get into it with you today. Again, we tend to go there in every one of our conversations. But for me, this was a logical next step in working with a company that was trying to bring more 3D creators online all the time for more and more use cases. Because, again, real-time 3D is the media type. And that is what is going to change the face of computing in the next decade and for the rest of time to come. And so I wanted to be where that action was and where I felt like it could make the most difference. And knowing that there are some web stalwarts like myself and Vlad and Martin on the case, you can imagine that this is never far from our minds in terms of how we can bring that to even more people. There are technological reasons for any lack of leaning in at this point from Unity's part. There are business reasons in terms of why we haven't been maybe more aggressive on some things on, you know, web and VR so far. But, I mean, a lot of those are just sort of accidents of business. This is not a position that is for or against. It's much more about We enable creators to succeed, create great stuff, reach the most people. The last little while of that journey for Unity, which actually started as a web plug-in, by the way, Unity started as a web plug-in, worked for desktop games and web, and then moved to consoles. Then mobile started taking off. Unity's rise can be really closely tracked to the rise of mobile. We have been there helping the mobile industry succeed for a long time. And so that's where a lot of the emphasis has been, because that's where the creators can make money. There are business models there that make sense. Meantime, the world is now converging with what we do. And that equation is probably changing again because there are all different kinds of distribution methods that need to be considered. There are use cases where people want to do this on web for various industries. And I can just run down a use case in probably every one of the industries we've talked about, maybe gaming being the exception because there is a known tangible business model where game developers on mobile, for example, either get paid for their title or they present ads and they make money through showing advertising. which is the business I'm in now at Unity. But when you look at the whole picture of real-time 3D, those distribution endpoints are going to be legion, and Unity's mission is to power that for everybody and make everyone successful there. So in the long haul, you know, if we have this conversation again in a few years, you can imagine those dynamics will change.
[00:10:33.948] Kent Bye: Yeah, so I'm curious to hear a little bit more of what's been happening with ads, immersive ads, both in VR and AR, and what you've been seeing.
[00:10:42.414] Tony Parisi: So, long-time listeners have probably heard me talk about our experiment in VR and advertising a couple of years ago. We did a pilot, it was a really interesting ad unit, which was a piece of 3D content you entered from a VR title, and namely the Samsung Internet Browser, so that actually had some reach. We wanted to reach some people with advertising content. It was a trailer for the fifth Saw movie, Jigsaw, a horror movie. And if you know the Saw franchise, the Saw franchise is all about getting people into these situations they have to escape by cruelly killing their friends and all that stuff, and that's exactly what the ad unit did. It performed very well in terms of getting people engaged. We actually studied their emotional reactions afterwards and all the things you might expect about VR. compared to especially like a linear video trailer for a horror movie, pretty much played out in terms of people reacting more, sweating more, smiling more after the thrill, after the scare was over, then there was a smile. And so those things were great, but when you look at VR as an advertising platform, the singular problem right now is the scale. The distribution advertisers need to reach a lot of people. They need to reach them where they are. So VR is a marketing technology. Very interesting. There's a lot of cool activations happening. I don't know if you saw the DreamWorks how to train your dragon VR experience, but the mill built this for DreamWorks. They put it in Walmart parking lots. People sat in positron chairs and took a dragon ride. and then came out and went into the Walmart and bought merch for How to Train Your Dragon. It can be a very effective marketing tool, but you have to go where the people are. So we regrouped from that advertising pilot experience and thoughts more about what we could do with AR. And at that time we were thinking about it, ARKit had just come out and then ARCoreFast followed that a few months later from Google. And now we were looking at a mobile supply of AR-enabled devices where we could potentially deliver augmented reality brand experiences to ultimately a few billion people once this technology proliferates. And so I began working with the ads team and that's when I switched to the ads team. It was the beginning of 2018 to build what was our first AR ad unit product. And we've done some pilots against that over the last year plus. We were in beta in 2018. And 2020, going forward, we're going to start turning that on in more applications. It has to start small because the thing about AR is you need to turn the camera on. And so when I talk about those 1.7 billion game players playing Unity games, those games don't all have the camera on. So now you're in a position where are you going to ask for permission to use the consumer's camera to show them an ad? That is a potential point of friction. So we've been working through some of those kind of issues as we deployed. To the point where we've even realized what we should be doing is delivering a 3D ad unit that potentially, optionally turns the camera on. We call that responsive AR. That's our term for it and we launched that this year. So that our ad units now are 3D. You can interact with content in 3D. Let's say it's a product you're exploring. Notably Fossil Watch. We worked with Fossil, which is a smart watch maker. You could explore the features of that watch, spin it around, change styles, tap on the face and see the smartwatch features before you ever were asked to turn the camera on to then try it on on your wrist. That is a big game changer, we think, because then you're reducing friction for people to interact with the content. If they never turn the camera on, they still get a brand experience and get to experience that product. If they do turn the camera on, it's even better. We can now get the data and the metrics behind who would turn the camera on or not, in terms of percentages of conversion to turn that camera on. And so that gives us a much fertile ground to play in as we're exploring what works in this world. The thing about this, this is very much a journey where we're learning on every one of these we do. We partner directly with the brands or their agencies that serve them. to understand what they're trying to do, how they're trying to reach the customer, what's faithful to the brand. And then we learn from that each time. So this is very new stuff. And we're particularly in an interesting place because we're a network that delivers into multiple applications. It's our gaming customers. We don't own the titles. We don't have first touch. We don't actually have user information. We're actually a safe place from a user privacy standpoint. But we reach lots of those people, but it gives us challenges on like, you know Some advertisers might want to target that user know what they're doing. Well, we don't really do that and we're kind of okay with that and When we explain to advertisers what the other benefits are with advertising with unity people are focused on the phone They're looking at their phone. They're playing their game. They get to the end of the game level They see a full screen experience for 30 seconds when they're done. They go back to the game and they don't tap out of that thing. Our completion rates on video are really high because people want to get back to the game. And you know, it's a time for a few hours a day where they're having fun. So it's just a really great environment for advertisers to reach into, even with just straight up video. But again, because we have these other engaging interactive formats, we can kind of do both. We can reach a lot of people with video, and then if people are turning the camera on, if people have devices that can do the AR, they can have a deeper brand experience. It's been a really educational journey so far.
[00:15:55.004] Kent Bye: Yeah, I never really even thought about the permissions issue. But I guess a follow-up question to that is, usually when you download an app, let's say it's a game, and it's an AR game, and you give permission to that game to use the camera, if you have an ad as an ad that's coming in, does that ad need to ask for permission? Or are you leveraging off of the app's permission that has already been granted that permission for that app context?
[00:16:19.950] Tony Parisi: That is an excellent question. If it's a camera-first game and the camera permission has already been granted, you're not going to be asked by the operating system to do it again. You're not going to get that iOS prompt or the Android prompt to grant camera permission. But at the beginning of the ad unit, we have a little signage in the front, so people are quite aware that they're going to be using the camera to power the ad experience. Of course, the camera's not taking a picture of them. It's none of that. It's using the camera to do ARKit and ARCore functionality. It's doing the tracking that's needed to do AR well. So there's a little bit of content in the front, it's like a screen, right, that precedes the ad. But that's not the same as granting camera permission, so that is a lot less friction. But we need to do that too, because we want people to be thoroughly aware that this is a camera experience that they're entering into. Now the good news is, I think over time we're seeing this because of platforms like Snap and Facebook and other applications that are large market applications with some force like Amazon, Ikea for shopping. The camera is becoming more of an everyday part of the experience to do this kind of AR. And so the general attitudes have definitely shifted, and they're generally positive, but we just have to be super thoughtful about this, right? And so we put this extra layer of permission in front, and again, it's simply just, it's, you know, a screen you tap before you see the ad thing, but it's not granting the camera permission from the operating system if it's already been done. So we started there, we started actually delivering the first ad units in AR-first titles, which at the time, a little over a year ago, that was a small amount, but that's actually growing now too. We're seeing more and more AR-first games, and not just from the big folks like Niantic. So I think over time, those points of friction will also be reduced.
[00:18:09.707] Kent Bye: Yeah, well, I haven't been keeping too up to speed of what's happening in the AR scene with both iPhone and Pixel. I know that the Pixel 4 just got announced and it was announced that they're not having VR support, so no Daydream support for the Pixel 4, which I think people saw the writing on the wall. At Oculus Connect 6, John Carmack essentially gave a eulogy for the Gear VR, saying that we might as well give a eulogy for the Gear VR because it's something that is not going to be updated now that they have both the Quest and the Go. But I guess the lesson for me was to see that the phone-based VR was that if people use their phone as their primary If you're going to put it into something that's going to potentially like occlude all the different notifications or drain the battery, which is probably the biggest issue, you're going to be needing to have your battery as your lifeline and if you're doing applications that are very battery-intensive, then, to me, it felt like seeing the contrast to the Go and the Quest is, like, well, people wanted those self-contained units where they didn't necessarily have to have these immersive experiences that had to trade off between, you know, their primary communications device with the world. Now, do you sense that there's a similar dynamic that may be happening in AR just because it is so power-intensive? Or are you seeing indications that may be more positive than what we saw with the mobile VR? Hill.
[00:19:32.838] Tony Parisi: Well, the thing about, at least when it comes to our ad experiences, the thing is, they're 30-second experiences. Now, interestingly, people are replaying them. Something I'm going to be talking about here at XRS Week at my 4 o'clock talk is that we've made ad units now that people replay, which is pretty fun.
[00:19:51.348] Kent Bye: Like, just after they watch it, they watch it again and again?
[00:19:53.329] Tony Parisi: Yeah, but they're not watching something. It's an interactive experience. They're playing something. In this case, it was a campaign with Miller Lite for St. Patrick's Day, and you're dunking a leprechaun into a vat of gold coins. It was a dunking game. But the camera's on. Well, you can do it without the camera on. It's so much more fun with the camera on, because that little guy is in your space. There's something about that. It might seem gimmicky, but there's something much more engaging about playing that game when he's on your tabletop or in your room. So, you're having an interactive, what we call a playable brand experience, but it's one that's got the camera on. And so, people are replaying that. But still, it's short-form content. That is not going to drain your battery too much compared to full-game content. But that could be a challenge for more long-form marketing experiences. There's other short-form stuff that's pretty cool in this realm, like what Tactic did with Treasury Wines, the wine labels, Living Wine labels. I don't know if you've seen that or not. They've brought labels of their wines to life you point at the label with the Treasury app Which has got millions of downloads now, by the way I can't have not a liberty say exactly how much but tactic told me I could share that it's been a lot Tactics the company that powers that they have a unity based system that helps build packaging activated AR so you pointed a label and stuff comes to life and So that experience lasts a few minutes, but it's still not the length of a full-length game, but it's doing amazing stuff that's bringing packaging to life and Sales have increased of the wine because of that. It's kind of amazing. And they just launched one with Jack Daniels. You point at the Jack Daniels label, it's a standard label too. They didn't need to put a QR code on it or anything like that because the brand was actually okay with having a branded app. You needed the app to get it. I think in this case, Jack actually wanted users to have their app, get some connection there. But they didn't have to change the label printing or anything special for AR He pointed the standard label and a diorama tour of the distillery comes to life Well a voiceover from that dude that southern sounding smooth voice, dude If you've ever heard a JD commercial on TV or on the radio, it's very comforting wonderful experience where you're getting this pop-up diorama that shows you the distillation process, gives you a bit of history on the distillery, and that's fabulous. And so we're getting to these brand experiences that you play for minutes, but they're still not full-length game experiences. So in my world, I don't think it's as much of a concern. I don't know about the broader picture of AR app usage but I'm just going to believe that we'll see a dance over the next couple years of this driving the need for more powerful phones and then the manufacturers are going to be happy because then it's upgrade time for the phones and just getting a better battery life, you know, smarter hardware that doesn't drain the battery as much. I don't feel like we're going to run into a wall on these things the way we did with the Gear VR. because those Samsung phones weren't designed for VR. And then we stuck them in a thing and made it work, you know, not designed for VR. RIP Gear VR, I think you know my opinion on this, three plus years running, probably four years ago now when I wrote that article, it's like we need a standalone, we need something we can put in our backpack. I was never a huge believer in the drop-in to a headset with your primary device for not just battery life, and those are very practical reasons, but ergonomic reasons too. I was just like, can I just have that phone as a controller to the headset I really want? Well, we're here now. We finally got around to that. It was an evolutionary step. It was scaffolding toward what we've gotten to now with standalones like Quest and HTC Cosmos. So I think we're designing these systems now to meet the consumer needs a little better. That was a bold experiment. I'm amazed at how much Samsung leaned into that for so long and that partnership with Oculus. We needed it. I mean, as an industry, I felt like we needed it. That was a great place to bridge people. But I believe that mostly was the stepping stone to get to where we are now with Quest.
[00:23:44.446] Kent Bye: So what makes a good AR ad?
[00:23:49.010] Tony Parisi: Okay, so there's, you know, we had VR for PR. There's the potential with clients these days to do AR for PR if we're not careful. Here's an interesting thing, then I'll answer your question. The dynamic we're finding is that it feels like a lot of the agencies and brands believe they need an AR strategy. If you look back, mobile six, seven years ago was the same. It was like, need a mobile strategy. Then quickly the discussion turns into they don't really know what they want yet. They know they need to get into this. So we work so closely with people in this area to talk through what they're trying to do exactly. Do you have a product that you would like to display in a way that people might want to see it in a real world context? Great use case for AR and we're seeing again Amazon and Ikea and all these folks kind of pioneering how that could work. That is a great use case. Are you thinking about how you can bring your brand to life with the real world and integrate it with the real world? Because that's what matters here, right? And are you thinking about it in a way that can work in multiple places? You think about an AR ad, an ad has to happen wherever and whatever the user is doing, the consumer is doing. So in social, that's one set of activities. When you're playing a game, you could be on the train, you could be at home in bed, you could be out in nature. So if you build an ad unit that requires you putting a thingy on top of another thingy, like a tabletop, that might not be the right moment when you're in the game, because you're in the wrong place. So we think about that a lot. And in fact, back to the Miller Lite campaign, those ad units could run pretty much anywhere. But we also worked with 8th Wall and Trigger to build a web AR experience, because Miller Lite wanted a pub crawl on St. Patrick's Day too, where you point at the coaster and that leprechaun comes to life. So we used image recognition, and we could have tried to do app-based stuff. We didn't want to do app-based, so we did web-based, worked with 8th Wall, Genie did the image recognition, 8th Wall did the tracking. And that's a case where that doesn't make any sense in an ad unit. It was based on going to a specific place at a specific time, St. Patrick's Day, right? So we combined all of these things into kind of a more 360 campaign that made sense for that brand to tell the story, to get the engagement where and how they wanted it. So, you have to think about those things and, you know, how does your story fit into the real world? How can it fit in short form? Obviously, the uses can't be gratuitous. Where AR is really great is that you've got 3D content there, so the production value can be stunning. And, again, if it's interoperating with the real world, whether it's, you know, maybe it's entertainment IP, it could be a dancing character you're just seeing in the space. You know, that could be a brand ambassador dancing character. Really depends on what the story is. And then all that, plus it's got to fit in a short form like, say, 30 seconds.
[00:26:31.367] Kent Bye: Yeah, and I know that looking to the storytelling and what people have been doing in storytelling, I know that there's a lot of things with dioramas. I know when I went to Magic Leap LeapCon, they had a whole guided tour of a place, so it gave me a spatial sense of going on a tour somewhere. It kind of gave me a If I was going to go to New Zealand, it was like, oh, here's the spots to see. But also thinking about facial filters, like either on Snap or on Instagram, where you're actually capturing your sense of identity, which then you have that viral sharing aspect. But that's also built within the context of those apps, which is all about sending and recording media. But if you're playing a game, there might be a little bit of a context switch where you would have to take a selfie or do something with your identity to be able to capture something. So I'm not sure if that's happening yet in terms of playing with identity and avatar embodiment. But then I also think about doing volumetric capture of characters, either motion capture or volumetric capture, to be able to have actual characters that are in a tabletop scene playing out some sort of psychodrama or some sort. So maybe you could talk about if those genres are starting to come up within advertising.
[00:27:41.779] Tony Parisi: So, let's talk about... First of all, I love dioramas. We can digress on dioramas and go deep for an hour on that. I don't know if you've read Three Stigmata of Palmer Eldritch. It's Philip K. Dick. Okay, I'm pretty sure I get that. It's one of the novels, I'm pretty sure it's that one, where people would take a substance and look at a diorama and it would come to life. It was VR, but with chemicals. So I always think about these when I think about AR and VR kind of diorama things. VR pieces like Gloomy Eyes where you're in this, you know, it's a doll scale, but you're in the world. You feel sort of God-size, right? You're leaning in. And I've seen some wonderful AR diorama pieces like The Dial. I don't know if you saw The Dial, where it brings a story to life from multiple viewpoints, multiple phones. I'm just fascinated by that area in general. I don't know how quite that connects up with the other piece we were just talking about, but maybe we can link the two in a bit. But when it comes to selfies and personalized content, that's an interesting area. At the moment, Unity Ads isn't doing that with AR. We're not doing front-facing. There's a few reasons for that. One of them is when you start getting into AR front-facing, putting lenses on yourself, putting headgear on, the virality becomes interesting because, again, Unity doesn't own that user relationship. We're not a social network. So it would really be on the game publisher if they had a social component and wanted to then do a share there. So we're being very careful about that and really kind of examining where front-facing could be best in an ad context. There's also a certain amount of sensitivity around brand safety on the part of some advertisers whenever you start getting into social and brand ambassadors, it can be tricky. You know, influencers, influencer marketing, because the influencers have their audiences and you have to get the right fit with that brand story. Same with just on social, where it becomes a user-generated content thing that potentially is a nightmare for some brands. We don't have any of that, thankfully. And once you get into front-facing, you need to start tackling some of those issues. You also mentioned volumetric capture. I'm a fiend for volumetric capture. I'm a huge supporter. I'm an advisor to the Lightframe company. That's the pop-up that's partnered with Microsoft in New York now. Arcturus, who makes some pipeline tools for making that all more interactive and easier to publish and produce. I did see that 8th Wall just showed off that they can stream that stuff now. So if you can do that, you can do some really interesting marketing on the web with captured people, full performances of captured people. We'd love to see some of that in ad units. Right now, that content's a bit fat. It's a bit big. And for us, we're similar to Snap or Facebook. We try to keep it around 5 meg. We don't have as hard and fast guidelines. is those platforms who are trying to reach lots of people on lots of low-end devices. We're targeting the newer ARKit, ARCore devices that can handle a 5-megad payload. And we've relaxed those restrictions sometimes, but volumetric content's still a little too big to pack into an ad unit. But if you can do streaming web type experiences with that, that's super exciting. And I just love it. I just think that if we can make that technology cheap and fast enough to be able to capture people in performances, expressive performances, art, dance, brand spokespeople telling you a story. I think that is going to be a really interesting area for advertising in the next three or four years. And you know, maybe that all gets accelerated by faster pipes, you know, 5G and edge computing and all these other technologies that everyone's excited about that are converging with spatial computing. So yeah, and I don't know how to tie that back into dioramas. I guess you could put little people and capture people in little dioramas. But to me, I guess it brings me back to a pretty childlike state, right? Playing with toys, G.I. Joes, whatever.
[00:31:22.148] Kent Bye: Well, I know that a lot of the immersive industry has been in LA and San Francisco, a lot of stuff in Seattle. And there's been communities in New York City, certainly a lot of research. They just have the R Lab that's starting up there, a big incubation space. And I'm glad to see that there's a lot of investment from the city to have actual big investments to be able to help bootstrap a lot of this immersive research and industry. But maybe you could talk a bit about the larger context that has drawn you to New York City and what you're finding in terms of reaching out to these new markets for immersive technologies.
[00:31:54.527] Tony Parisi: Yeah, this is great. I'm glad for the opportunity to talk about New York. I'm super excited. I've been spending the fall there. Unity's brand ad business, as you can imagine, there's a lot of action for that in New York. That's where the biggest ad agencies are. That's where a lot of the leading edge creative agencies are. Unity itself has a small brand ad sales office there, the occasional remote worker. We don't have a big presence there at the moment. And one of the reasons I'm in New York besides to kind of help elevate our brand ad business is to look at what's going on in the ground in the XR community there. And there's a lot. I've been popping in and out for the last year and a half or so, going to the R Lab after it opened up, going to meetups that, you know, Ori from Superventures is hosting, and now he's launched the Accelerator, as you mentioned, Superventures XR Accelerator there. There's a community there. There's a lot going on. They're building all kinds of applications. Some of it's brand and retail and, you know, sort of marketing focused. Some of it is the broad swath. We're seeing medical applications. We're seeing enterprise use cases. And it is, I think, a sleeper. I think it's a sleeper when it comes to XR, and I think it's going to be the next hotbed. That's what I believe. So it's another reason I want to spend more time there. I mean, it just so happens, life circumstances. My son just started in college in Boston, so being there, I could be closer to him. But that's just a piece of the whole pastiche for me, which is just getting to New York and seeing what's going on, seeing all the people using Unity to make really cool stuff. So all that plus, you know, there's something about New York where it's like, it's real. People who are there, they can't screw around for too long. They can't really get away with that. They have to find a business. They have to get work done. A little more so than say some of the high flying stuff that happens in Silicon Valley where there's a lot more speculation. There's a lot more big bets placed on crazy tech. New York's a little more rooted, grounded, so seeing XR activity there makes me feel like this gets more real. Now, this is hardly scientific, so it's a gut feel, but to me that just speaks to this further progression of immersive technology into the mainstream.
[00:34:05.946] Kent Bye: Yeah, and there seems to be a bit of a learning curve, I think, for people getting in. How are you helping onboard them into this? How does one start to go from zero to start to jump in and start to have an actual AR strategy?
[00:34:21.342] Tony Parisi: Yeah, so that's been interesting. Unity actually did a study. We commissioned a market survey. We surveyed like 1,000 marketers. Again, there was this prevailing sentiment. I don't have the numbers off the top of my head. I could reach into my phone and dig them up, but I'll try and just give you a more qualitative sense. There's this prevailing sentiment that brands and their agencies were feeling like they need an AR strategy. The perception is there are technological hurdles. It's too hard. The content creation cost can be too expensive and certainly when you look at what it takes to build a VR experience, that is very production intensive. You're building entire worlds, you're building longer form stuff. It can be a lot less painful in production budgets and other aspects of this when it comes to doing a little ad unit like we're talking about. But we're starting there. It's like this perception that it's too hard, it's too expensive, and it won't reach enough people. And so this is what we're working on now, is a certain education process. And specific to Unity and advertising with us, we also have the very interesting challenge that a lot of brand advertisers think that if they're going to advertise in gaming, How do I put this? I'm just going to be unkind about it. If they're advertising in gaming, they're reaching the sweaty dude in his mom's basement playing Halo when they don't realize that gaming means everybody. Demographics skew a little bit female. Age range is everybody. Median household incomes are high. It's a great place to advertise. That is my day-to-day life when I'm talking to the ad world, the difficulty, the expense, the ROI, the reach, and it is changing. Now that being said, that's just around creating AR ads. We're still in a place where immersive content creation is not easy. Unity is doing its part with great tools, but even then there's a broad swath of creators who you pop them in front of the Unity editor and they can be lost if they've never had an experience in a 3D development environment before. And then you can tell them, yeah, here's this language, C sharp, which maybe looks like something you've written code in before, but it's not quite that. So we're taking that to heart and looking at that too and trying to figure out in many, many ways, whether it's easier workflows or more skins on the editing experience or whatever it might be. To make that easier for more creators because it is still it's you know where we come from it's been a professional game development tool That by dint of us being so great at supporting all the XR platforms all these other industries started coming to us and what we've had to do industry by industry is Like an automotive and an architecture and everywhere else's figure out, you know, how many of those people are creators? How many of them are design reviewers? How many of them are you know end users of these? Experiences and how can we better serve that because even though the technology is 99% the same those dynamics I just talked about are completely different for the auto industry than they are from the game industry than they are from the creative industry So that's a wild journey too. And so in New York, I'm spending my time with more marketing content creators and there are a couple of classes of them. There are the experts at this, there are the triggers, there are the Digitas, Isobar, Rewind, The Mill, Tool. There's a, you know, they're in New York, LA, but I'm saying. Those types, they are cutting-edge content creation shops. Mastering Unity is a badge of honor. They can do stuff nobody else can. For every one of them, there's thousands of creators within marketing agencies and interactive agencies who'd like to be doing more in this world, and they need better tools to do that.
[00:37:42.419] Kent Bye: Great. So, for you, what are some of the either biggest open questions you're trying to answer or open problems you're trying to solve?
[00:37:50.112] Tony Parisi: Right now, helping marketers create immersive content and tell these stories at scale and across the board. Again, in these blended campaigns that may have components of AR ads, they may be AR ads that run with us, but also run with Spark and Snap. They may be activations that are powered by ETH while they're on web. They may start with a QR code. You may start with a print ad you're looking at. Really understanding that 360 picture of where AR can provide the most value. Number one, that's an ongoing learning exercise. We'll just keep honing, refining. Beyond that, the things I'm thinking about start to range a little farther. Where does this take advertising? So AR ad units is a starting point. I don't think we believe that in five years this will be the way marketing content, the way brands reach consumers is simple little AR ad units on the phone. There's going to be something new, right? Because you know where this is going, right? Are we going to smart glasses or more immersive hardware? So I'm starting to think about that and what that path might look like, which is interesting. That's kind of North Star for me, keeping me going. That's where I'm headed while we're learning this and how to put it into practice today. Because if you just tried to build that all today for platforms that don't exist, it doesn't make any sense. Even if you had control of the platform, you could do one killer marketing activation that was the, this is the way every brand's going to tell stories someday, but it only works in one place. Can't just go there, right? Should be thinking about that long term. But what matters now is practically understanding how to apply this, learning together, learning what storytelling for brands means now, but then kind of future casting a little bit and thinking about where could it go in a few years and how do we get there. So that's my thought process these days on that.
[00:39:32.157] Kent Bye: Yeah, I know over the years we've talked about advertising and I guess I've had such a hesitation or skepticism around it just because of seeing, I guess, the ethical lapses of something like surveillance capitalism of just a lot of the data aggregation and data collection of really trying to create these psychographic profiles that are, in some sense, eroding our privacy. And as we move into these immersive technologies, I guess I've been a little scared of having these huge repositories of implicit information or eye-tracking data or biometric data and all this stuff that would be a goldmine for advertisers to see that you're actually paying attention, you're actually engaged. But there's all these trade-offs for privacy. And I know that there's a lot of different companies with a lot of different strategies. And we have Google and Facebook that have been in more of the surveillance capitalism mode, and then Microsoft and Apple, who are in some ways, Microsoft being more of the enterprise approach, and then Apple saying, we're going to architect for privacy first. So we have, even within these major players, different strategies. I'm very happy to see a lot of the privacy first architectures from Magic Leap. to see the upstarts trying to think about this. But I guess there's concerns that I have as this moves forward that there may be more of a branded experience, but there may be, I guess, pressures to want to get more context, more information, more engagement, more targeting for those users. And where does that ethical threshold line get drawn in terms of, Making sure you're on the right side of these ethical challenges when it comes to privacy versus Opening up the spigot to be able to highly target people. So how does unity navigate that?
[00:41:14.135] Tony Parisi: Well, thankfully, thankfully, there's a couple things. First of all, Unity's, even though we're an up-and-comer, you know, we've been around for a long time and we're growing and we're kicking butt, right? The company's doing really well. We rely on our partners a lot for this and it's the platform providers and the bigger actors here who really are going to set that. Unity's been real good when all this GDPR stuff came out. I mean, I gotta say that we got ahead of that. We were on it as fast as we could with this stuff, and we had to retool in our ad platform. There's a lot that had to happen. And we're pretty good at that. And so we're in a comfortable position where, like, we're not on the front lines on those issues. And we have the luxury of being kind of thoughtful about it and leaning on some of these other partners. As they set these things, as they set these protections up, and say what you will about any of them individually, I think we're going to continue to see this play out over the next several years. And on a human level, I'm of course as concerned as a lot of people would be about how these things play out over time as we get more technologies that could be exploited for the kind of things you're talking about. pretty confident Unity is going to continue to be thoughtful and kind of neutral about this stuff. We're not, we're certainly not going to be an aggressive player in anything that would get near that boundary that you were citing, thankfully. I mean it's a relief to, and I can, you know, talk about that comfortably because we always try to do our level best and most of that's out of our hands and we just continue to support the platforms and you know, hope for the best and try to do the right thing and listen to everybody and follow in all the guidelines and, you know, thank goodness. Otherwise I wouldn't, probably would just have ducked the answer to your question because it's honestly, it's very, it's very sensitive territory and it is an interesting time right now in that realm. So, you know, we've got these nice little mobile ads that reach people when they're playing games. And again, we're not collecting user data, so.
[00:43:18.093] Kent Bye: Yeah, I was happy to hear from the W3C that there was a whole tag, so a technical architecture group looking at privacy and they put forth a whole set of ethical design principles with privacy being a big part of the future architecture of all the standards that are coming out. So it feels like that with this time period we're in, we're crossing these ethical thresholds and having us step back and try to articulate what those ethical design principles are. And that's a lot of what I've been trying to focus on is trying to help to formalize what some of those ethical principles might be, because I feel like that's a bit of a need within the community to have those design principles so that you can start to evaluate these different trade-offs. Because all of these are just engineering trade-offs where it's not like a clear line. It's trying to nuance and find through your own intuition, but also your own moral intuition, And if you go too far, then either there's regulatory impact or there's a, hopefully at some point, just a commercial backlash that people feel like that there's too much of that going on. So there seems like a recalibration phase that's happening within the entire technology sphere, but because virtual and augmented reality is so real, it's kind of pushing the bounds into all these other blurring of context that feels like it's the Wild West of all that. So anyway, that feels like that this process of trying to come up with those guidelines, those ethical design principles, is kind of what the whole community is trying to go through right now.
[00:44:46.338] Tony Parisi: Yeah and thank goodness there are folks like you and other people thinking forward and trying to get ahead of these problems because industry will tend to build, we're building the infrastructure and we're focused on solving those problems and we tend to not think through a lot of these problems in a thoughtful long-term way. We're just trying to get the pipes laid, we're just trying to get the scaffolding up, and there need to be other entities, there need to be other dynamics, including thought leaders, people asking the tough questions, potentially groups like the W3C architecture group, looking at it from a comprehensive sort of systemic way, as well as potential commercial forces, where if some ads are too invasive and too not good, then there could be potential commercial backlash for that. I certainly don't want to be delivering any ads that people hate for reasons like that. So I think it's an interplay between all of them. And as long as tech is listening, then we should be good on that front. But tech has to be listening to someone. And it's people like you, Jessica Outlaw. There are people asking these hard questions about ethics, privacy. And so, honestly, I think that's just part of the pageant. I mean, now, you know, stakes are rising. Stakes are getting a little higher. These technologies are getting more powerful. So maybe there's a bit more urgency than there's been in the previous waves of technology disruption and innovation. But sort of always been the same way I think it's just gonna play out on Slightly more compressed timelines because these things are coming in hard and fast and clearly we've had some global ramifications as well in some areas So I think this is all good and I'd like certainly like to encourage you and not that you need it But to keep doing more of that
[00:46:28.638] Kent Bye: And finally, what do you think the ultimate potential of immersive technologies and spatial computing might be and what it might be able to enable?
[00:46:38.483] Tony Parisi: Don't you ask me this one every time, but just in case your listeners haven't listened to every one of all of our podcasts. For me, it's always been bringing the Wikipedia of spatial computing to life, or the Penguin history of the world. It's all about having access to information and content, you know, to learn about things. And so I'm most excited about that. I consider a lot of the brand media stuff that I work on kind of a subtype of that. storytelling, media, and that's what this is about. Someday we'll be some space-faring civilization getting all our information through immersive tech like that. Princess Leia's hologram on the tabletop is sort of the thing that first inspired me and continues to inspire me. We'll be communicating holographically, we'll be learning with spatial interfaces, we'll get all our information that way. So that's it for me. It's the future of interface and Could be for any of these things but for me what excites me the most is history storytelling education And you know getting a getting the best chance to reflect on our world and understand each other Awesome great.
[00:47:46.271] Kent Bye: Well, thank you so much for joining me today on the podcast.
[00:47:48.071] Tony Parisi: So thank you my pleasure Kent It's always a pleasure. Can't wait for the next one
[00:47:53.286] Kent Bye: So that was Tony Parisi. He's the head of AR VR ad strategy at unity technologies. So I've heard a number of different takeaways about this interview is that first of all, well, actually listening to Tony talk about what he's doing there with advertising at unity, it actually gave me a lot of comfort just to hear that someone that like Tony, who has a lot of ethics, a lot of morals is in that position to try to do the right thing. Now, my biggest question is that he said, okay, it kind of depends on what happens with our first party partners. I don't know if that's like Oculus and other platforms like ARKit, ARCore, so Google and Apple, you know, they're pretty much on every single platform that's out there, whether it's everything from Magic Leap to I'm sure that they're in talks with like Apple with what are they have cooking up with immersive head man on displays, but also just all these different companies, they're talking to everybody in the space. And, you know, they've taken a lot of VC capital, a lot of VC investments. And so while I have a lot of trust that Tony wants to do the right thing, I guess my biggest concern is the larger ecosystem dynamics, whether it's from their partners deciding about certain things and strategies, that's kind of beyond their control of what unity does. But also if there's changes within the company, or whether it's a board of directors, or there's always going to be that moment where they decide, do we want to start to track people with a lot more information and start to hoard all this data? And hopefully with things like GDPR and other aspects where there's a lot more liability with the implications of architecting what you do with that data, it's hopefully moving towards this direction where, unless you know exactly what you want to do with that data, it doesn't really make sense for a lot of companies these days, at least, to start to just hoard and storehouse all of this data. So hopefully that's the case. And I got a good sense from Tony that they don't want to go down that road. And so it sounds like at least at this point, they're drawing a pretty firm ethical line that they're not going to start to get all this extra information about the user. I guess the thing that concerns me is that I just know that because it has the potential to work so well and to be able to target more clearly to individuals, then there's going to be this desire as they move forward to start to do that type of profiling and. targeting towards those individual users and to get a little bit more efficiency within their ads. And if they do that, then they can make more money. So I think at this point, they're trying to take a stance where, you know, within the gaming ecosystem, it's a little bit different than like the open web, where you have people that are either paying explicitly for games, or they kind of know that there's this exchange that if you want to play the game and you want to play it for free, then you can, you know, see the ad. And then sometimes if you get annoyed by the ads, then a lot of times you can just like pay money outright to avoid seeing the ads. But Because people are engaged within the game, then they actually want to stay around for the ad because they want to get back to the game. So just to kind of shift gears back into the actual content of AR marketing. It sounds like, you know, they're starting to do these augmented reality advertisements or sometimes like games. So he's saying like, you know, the leprechaun game that with Miller Lite, where you're like dunking the leprechaun. And so Tony was saying that they had to like make it really clear that they're going to start to use the camera. And that sounds like if it's a experience that already got that permission, they don't need to gain it again because it's when the context of that app, but unity wants to take a stance of saying, okay, even though we already have that permission, we want to make sure that the user's totally aware that we're going to start to look at what's in the world to be able to place these different augmented reality ads on top of that. And because they're short, don't take a lot of time, maybe 30 seconds. And they're not actually something that is much larger than like five megabytes. There's not a lot of leeway to do something too involved, but users starting to see these different immersive experiences and these ads. And yeah, it'd just be interesting to see where they end up taking it. I think. big challenge is, you know, how to do storytelling, spatial storytelling, and how to actually, like, convey different aspects, sounds like the dioramas was a big part of that of being able to see a specific label and be able to point that at wine companies or Jack Daniels, and then be able to take what is there on the label, and then kind of kick you into this whole immersive experience of showing you different aspects of tour through the different distilleries or making the art that's there come alive in some sort of spatial sense. So I think just trying to make it so that whatever you have there, if it's like being triggered by the product that you have already to be able to give you this extra experience on top of that with their brand, or if you don't have anything at all, it has to be able to work with whatever context and environment that you're in, which is a whole other angle of how do you design experiences that will work in a whole range of different types of environments. And so, you know, what Tony was saying is that there's a lot of these different companies are trying to come up with their AR strategy. So he has actually moved to New York City to be talking with a lot of these different ad agencies that are in New York City working on these really big clients. And I think more and more seeing that the immersive augmented reality advertising is just becoming more and more of a thing, especially with the AR kit and AR core, lots of people with these cell phone devices, and they're able to start to push out a lot of these different types of immersive experiences. So just generally getting people used to different types of spatial content, just using the window aspect of their phone, I think is going to help continue to bootstrap the overall immersive industry to have more and more different types of immersive experiences. So I'm excited to see where this is going to go and just excited to hear that unity is continuing to innovate and push forward in this. Haven't heard that there's a lot of other companies that are doing that. I know that like Facebook is doing a lot of stuff within the context and ecosystem with like Instagram, but like he said, in the context of Instagram and Snapchat, you have these facial filters where you already have a whole network of people that are sharing. photo content but yeah if you're in the context of a game you have to think about like Does it make sense for you to take a photo of your face? And then what do you do with it? You would have to actually leave the game to then go back and you know Share it on your network and I think the whole thing with unity is like no no No, we don't actually want people to leave playing the game because you know We'd rather them keep them there playing the game again and be able to see another ad so doesn't necessarily make sense for them to do that context which to do the facial filter and advertising on top of the fact that it's very risky to ask the users to be able to become your brand ambassadors and all sorts of special considerations that come along with that. So, like I said, I was really happy to be able to sit down and talk to Tony. It gave a good sense that, you know, unity is there. And I think in a lot of ways, fighting the good fight of trying to, you know, be this independent entity that is trying to create this platform and preserve different aspects of it trying to be co-opted from all these different companies and try to get paid to implement specific features that are only unique to very specific platforms. And, you know, like I feel like like unity is doing a lot of work of just trying to keep a certain level of consistency across all these platforms so that the content creators can be able to like just focus on their game and to be able to distribute it out to all these different platforms. And so It's just nice to see that someone like Unity, as well as like the Unreal Engine are these independent entities that have quite a bit of leverage within all these other companies. And I imagine that there's a lot of these other companies that are building internally their own game development ecosystem. But you know, just the fact that there's like a Unity store and everything else, it feels like it's got so much of a network effect there of so many people are using it that usually Unity has the first mover advantage of being able to move on to new platforms. And Unity is usually the first one that is. implemented in Unreal Engines right there behind it. Also having all these implementations as well, but not necessarily always first, just because there are a lot more people that are using Unity than Unreal Engine. So I think over time that may be leveling out a certain bit, especially when it comes to filmmaking and entertainment. It seems like actually there's a lot of features that are baked into the Unreal Engine that maybe a little bit more sophisticated when it comes to special effects and Hollywood and different aspects of enterprise applications. For example, I saw Epic games at the law of all virtual and unity wasn't there. And so I know that Epic is highly engaged with the whole, the enterprise market as well. Anyway, just the, some additional color and information that I've seen from these different dynamics of have a number of different interviews with unreal engine going into all different stuff that they're doing with like virtual production and different stuff that they're showing off at SIGGRAPH and, you know, they're doing some amazing stuff as well. So hopefully into the whole aspect of virtual production as well at soon at some point. But I think the big point of this conversation was just to hear from an entity that's trying to do advertising in a way that isn't relying solely upon the model of surveillance capitalism. So that's all that I have for today, and I just wanted to thank you for listening to the Voices of VR podcast. And if you enjoy the podcast, then please do spread the word, tell your friends, and consider becoming a member of the Patreon. This is a list of supporter podcasts, and so I do rely upon your donations in order to continue to bring you this coverage. So you can become a member and donate today at patreon.com slash voices of VR. Thanks for listening.
