Abstract With the advancement of science and technology, virtual reality (VR) technology has been widely used in advertising. However, its practical application and challenges in creative advertisement must be studied deeply. The study aims to analyze the effects of VR technology on advertisement design and the technical difficulties it faces. The research methods include camera calibration of virtual advertisements, motion tracking, and calculation of lighting effects, etc. The results show that the use of VR technology of the results show that the virtual advertisement using VR technology can effectively improve the correct recall rate (by 12%) and the correct re-recognition rate (by 10.5%) of the advertisement brand. At the technical level, real-time motion tracking of billboards is achieved, and the average error is controlled within 0.6 pixels. The consistency of illumination of virtual advertisements can be effectively improved using the inverse illumination method. The conclusions show that virtual reality technology has great potential in the design of creative advertisements. Still, at the same time, it also faces the challenges of the accuracy of the camera calibration, the efficiency of the motion tracking algorithm, and simulation of the illumination effect.