Augmented reality is changing the game for advertisers. Immerse yourself in the wonders of AR advertising.
(Updated September 2024)
Augmented reality (AR) is emerging as a groundbreaking technology – not just for consumers in the advertising world; it also offers brands the opportunity to create immersive and interactive experiences for their audiences.
With the integration of Artificial Intelligence (AI) and machine learning, AR is set to revolutionize programmatic advertising and marketing strategy overall, providing a new dimension for brands to engage with consumers in a more impactful and memorable way.
This innovative combination of AR and AI opens up endless possibilities for advertisers to create unique and personalized ad experiences that captivate and inspire.
What is Augmented Reality (AR)?
Augmented reality (AR) refers to technology that enhances the real-world environment by overlaying digital visual elements, sounds, and other sensory stimuli through holographic technology. AR combines digital and physical worlds, enables real-time interactions, and accurately identifies virtual and real objects in 3D.
Augmented Reality (AR) vs. Virtual Reality (VR)
AR uses a real-world setting while VR is completely virtual. AR provides a more effective way to create, organize, and deliver instructional content by integrating digital information into real-world tasks and situations. Unlike virtual reality (VR) where everything is entirely virtual, AR is designed to add digital or virtual elements over real-world views with limited interaction.
Put simply, AR users can control their presence in the real world; VR users are controlled by the system. In addition, VR users typically require a headset device, but AR can be accessed with a smartphone or other digital devices.
Types of augmented reality advertising
In a technical sense, there are various types of AR with distinct applications and functionalities:
Marker-based AR
This type of AR makes use of a visual marker such as a QR code or fiducial marker. Users simply scan the marker with their mobile device to initiate the interactive experience. However, augmented reality mobile advertising is limited in the sense that it requires a mobile device or technology that has built-in AR support or a dedicated app for the AR to function.
Markerless AR
Markerless AR functions without the need for physical markers (such as QR codes) and instead, uses location-based data like GPS or mobile device accelerometers. Users scan their environment through a mobile app or website, and digital elements are projected onto surfaces such as floors and walls.
It identifies and monitors the user’s surroundings to superimpose virtual content based on spatial relationships and object positioning. This type of AR is commonly used in online shopping or in-game advertising.
Projection-based AR
As the name suggests, this type of AR uses projectors to project 3D imagery or digital content onto flat surfaces such as walls and floors. It doesn’t fully create immersive environments but the holograms displayed are intended to captivate and engage audiences.
Projection-based AR is commonly used in in-person events such as store openings, pop-up shops, and movie screenings.
Location-based AR
Location-based AR is a variant of markerless AR. It makes use of geographic data to deploy digital content at precise locations (similar to geotargeting). The most common example of this is the mobile gaming app Pokémon Go which allows players to trigger various AR functionalities depending on where they are.
Location-based AR has only been used in retail settings to gamify the shopping experience such as virtual scavenger hunts within boutiques to entice customers to explore and earn rewards.
Superimposition-based AR
This type of AR marketing replaces or enhances physical items with digital content. Specifically, it identifies objects or features in the user’s environment (such as book covers or product labels) and overlays digital information onto them.
For example, in retail settings, this technology can guide customers and provide product information by placing virtual arrows onto the environment to direct shoppers to specific products. A device can reveal the virtual overlays with details such as price, features, and reviews.
Forms and applications of augmented reality marketing
In addition to the technical types of AR, augmented reality in marketing can also take various forms and applications:
- AR OOH advertising: Augmented reality can be integrated with out-of-home (OOH) advertising. OOH advertising refers to any visual media presented outside of the home such as billboards, bus stop advertising boards, etc.
- AR print marketing: Traditional print marketing such as postcards, flyers, and direct mail, can be more engaging and elevated by applying AR elements to it.
- AR product packaging: AR can also be utilized in various packaging such as adding QR codes to a packaged product that shows how-to videos or a thank-you message.
- E-Commerce: Through appless AR or web AR, customers are able to view and experience products in 3D from the comfort of their own homes. Some websites can offer a “virtual dressing room” or a “virtual try on” feature that lets customers try on products
- AR events and showcases: Events, conferences, product launches and showrooms, and virtual walkthroughs that integrate AR elements can be used to elevate the user experience. Visitors get to have an immersive event experience through 2D video, 3D animation, and volumetric motion capture.
- Other forms: In addition, there are other various forms of augmented reality advertising. For instance, Snapchat has a feature that uses AR-powered lenses and filters that lets you “try on” various products (such as eyewear or apparel). There are also virtual walkthroughs and showrooms, AR video ads, 3D product showcases, AR games (such as Niantic Wayfarer and the aforementioned Pokemon Go), and more.
Benefits of augmented reality in advertising
Studies show that a great AR ad campaign is typically more effective than traditional advertising techniques. In one study by Meta, 90% of brands found campaigns combining traditional marketing or business-as-usual tactics and AR saw nearly three times the brand lift and costing 59% less on average.
In another study from eMarketer and ARtillery Intelligence, US mobile advertising spending itself is set to grow over the next year, reaching up to $235.67 billion USD by 2025. Mobile AR advertising revenues worldwide is expected to grow to $39.81 billion by 2027.
This shows there’s a lot of room for potential and growth in the industry and AR advertising is expected to increase in investment and revenue in the coming years.
Investing in AR advertising provides a lot of value and advantages to campaigns. It provides better user engagement since it offers a more unique, personalized, and interactive experience for customers.
In fact, the Ericsson Emodo Primary Survey Research Study in 2021 found that 68% of respondents agreed or strongly agreed that engaging AR ad experiences reflected positively on the brand on question; 74% said those ads with AR experiences would be more likely to capture their interest or attention than regular ads.
Some companies have also found that AR ads often perform better than display ads, which leads to higher conversion rates. Take for example, Shopify, who found in their study that on average, 3D AR ads generated 94% higher conversion rates than their static 2D counterparts.
Utilizing immersive AR experiences lets brands build deeper emotional ties with their customers and achieve better brand recall. By immersing the audience in the experience and encouraging active engagement, AR increases the likelihood that viewers remember the ads.
Studies show that AR experiences lead to 70% more memory encoding compared to traditional static ads.
Challenges of AR advertising
There are certain challenges, and limitations, to consider when utilizing AR in advertising strategies. For instance:
- AR-enabled technology is required: One of the biggest barriers marketers face when implementing AR is the need for supporting technology. This could be a smartphone or tablet with a camera. In addition, most AR ad experiences rely on a mobile app to host their content. If your target consumer doesn’t even have the app or technology to view your ads in AR, then it would be a lost cause.
- Hardware and network limitations: Your campaign is limited to what a user’s device can withstand. The graphics processing capacity, the battery consumption, the network connectivity, and other factors can be very demanding both from the advertiser and the user’s side. This means that your AR campaigns may not be as effective if there are any hardware and software limitations from either side.
- Expertise required in building the software and ad: It takes technical expertise (such as coding and 3D rendering) to develop AR advertising campaigns. There are AR software development kits and tools that exist. However, they can be very costly. Even outsourcing this work to third-party companies or agencies can be costly if one doesn’t have the tools and resources to build AR campaigns themselves.
Examples of augmented reality ads
Coca-Cola launches “#TakeATaste” AR campaign
In September 2023, Coca-Cola UK had an innovative AR giveaway and a nationwide digital out-of-home (DOOH) campaign called “#TakeATaste” for its Coke Zero Sugar product in collaboration with Tesco group.
Smartphone users could interact with some of London’s OOH screens (such as the Picadilly Lights) and change the screens’ AR visuals in real time. They could also scan a QR code that awarded them with both a digital bottle of Coke Zero on their phones and a voucher to claim the real thing in a nearby Tesco.
Toyota uses AR to give users a virtual test drive of its “Crown” line
Toyota collaborated with Yahoo Advertising to create an immersive AR experience in support of their launch of the 2023 Toyota Crown line.
With the AR experience, users can delve into the car’s exterior and interior, taking a complete 360-degree tour around the vehicle, immersing themselves in the driver’s seat, and even virtually driving the car, all within the confines of their own garage or driveway.
To make the experience even more informative, educational highlights are incorporated to offer shoppers a better understanding of the Toyota Crown’s distinctive features.
In addition to the AR experience, Yahoo helps Toyota reach future Toyota Crown customers through additional digital touchpoints including Digital Out-of-Home (DOOH) advertising, banner displays, and leveraged Connected TV (CTV) pre-roll to reach consumers in their homes.
The Weeknd holds an AR concert on TikTok
To promote his album “After Hours”, musician The Weeknd held a concert in 2021 on TikTok. The Weeknd became the first artist to use TikTok for an augmented reality concert.
The concert offered a fully live digital experience with scenes changing with each song. Through AR, users could choose the scenes by voting and sharing comments which were displayed live in the surroundings.
Final thoughts
As AR evolves and integrates into various industries (including advertising), it has the potential to revolutionize how brands engage with consumers.
By harnessing the power of AI and AR technology, advertisers can create personalized and engaging ad experiences that drive meaningful connections. This innovative combination of AR and AI also opens up endless possibilities for advertisers to create unique, experiential ads that inspire and captivate audiences.
AR has proven that it can play a vital role in the advertising realm. The question is: will it play a role in your advertising?
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