Augmented reality (AR) is rapidly growing; projections from ARtillry found that AR revenue will reach a staggering $14 billion in 2021, up from $975 million in 2016. One reason for the growth is that brands are starting to see the benefits of AR as an immersive ad format.
AR’s value extends far beyond entertainment. It creates new and innovative ways for brands to connect with consumers. AR offers a particularly engaging ad format; gestures like swipe, tap, and rotate are natural in a mobile environment and allow consumers to explore products showcased within the ad.
With 70% of the global population expected to become mobile users by 2020, the demand for creating mobile content will only rise. By incorporating AR into their always-on media strategies, marketers and advertisers can reach consumers on devices they already own and build emotional connections through more engaging mobile experiences.
Here’s a closer look at precisely how marketers can start benefiting from augmented reality now.
A major benefit of augmented reality is its ability to enhance the existing environment, rather than fabricating an entirely new one. AR allows consumers to envision a different rendering of their current space. For marketers, this is especially important when consumers are considering expensive purchases or working with empty space, like during periods of interior decoration, renovation, or design.
According to a study from market research firm DigitalBridge, one-third of consumers would be more likely to make an immediate purchase of an expensive item – i.e. furniture — if they could access an AR visualization of it first. Marketers can use this method to reduce the conversion time for that type of sale by up to six months.
Companies like IKEA, Pottery Barn, Zillow, and Wayfair have already developed and launched proprietary mobile apps where consumers hold their phones over their living rooms and kitchens to see an overlaid visualization of a piece of furniture in that room.
Pottery Barn recently launched an AR ad campaign where consumers can see various configurations, colours, and sizes of desk lamps, media consoles, sofas, and more in their own homes. The experience lets them envision how these furnishings complement their environment before moving on to browsing the Pottery Barn site or visiting in-store. The AR campaign resonated with consumers, driving an average time spent of 2.4 minutes.
Apparel and Cosmetics Inspiration
Interior design and home improvement aren’t the only retail categories benefitting from AR. Retailers in apparel and cosmetics have also been early movers in the format, realizing its marketing and customer support potential. Companies like Macy’s have integrated AR into the store experience to maximize basket size. Others have seen consumers interacting with their new AR ads for an average of two-plus minutes. Compare this number to the standard engagement time of 13.14 seconds.
AR has proven particularly effective for retail sectors where consumers are either hesitant to shift their brand loyalties or to pull the trigger on an expensive or unfamiliar experience. A study from Interactions surveying Americans aged 18 to 64 found that 25% would want to shop for makeup by augmented reality; 35% would shop for shoes with AR, and fully 55% would like AR to help them shop for clothing. Many consumers still rely on word-of-mouth recommendations from trusted networks or sampling to try something new in these categories.
AR could be the future of trying on clothes, a new hairstyle or a fresh makeup palette. Converse’s Sampler mobile app already lets people see what the shoes would look like on their feet, while Uniqlo’s virtual dressing enables the same capabilities in a store setting.
AR is quickly becoming the dominant tool for companies like Sephora and L’Oréal, enabling users to sample various products both at home or in-store. And as AR becomes more sophisticated, it’ll lower barriers to purchase certain goods–cosmetics, clothing, and more–online. It will also reduce returns, which are a consistent logistical and financial drain for retailers.
Ultimately, AR provides an enhanced experience that deepens the brand connection and provides a level of utility that mobile users now come to expect. In fact, nearly three-quarters of consumers already expect retailers to offer a mobile AR experience.
Break Through the Clutter
As audiences demand more engagement and a greater connection with brands, marketers need new ways to break through the clutter of traditional advertising. AR is a powerful tool for doing that. AR campaigns have probably higher engagement rates than traditional digital formats, with some brands, like Home Depot, seeing a dwell time of two-plus minutes. While enhanced storytelling is an easy win for many brands, finding fresh utility for consumers will crack the code on increasing campaign engagement. We believe that progress will take place in incremental steps.
First, further experimentation by content and technology players will spur development of new experiences and content distribution methods. On the brand side, more consumer companies will invest in pilots, and the results will build confidence and reduce the risk for future projects. These developers and brands will find varying degrees of success until a few standardized platform infrastructures and monetization models emerge. Once these platforms are commonplace, brands will compete to build the most contextually relevant and memorable experiences for users.
Second, the seamless consumer experience needed for AR-enabled experiences will require a significant increase in data bandwidth. XR ad formats like AR and VR are already pushing the boundaries of connectivity and 5G technology could offer the solution. It will be a boon for AR, driving speed and reducing latency. This is critical to achieving advertiser goals and a better consumer experience. Widespread rollout of 5G can increase connection speeds by up to 10X while cutting latency by a factor of 5X. AR experiences will look crisper on smartphones, making dynamic creative that requires additional data more of a reality.
It’s only a matter of time before AR applications become ubiquitous. And the companies best positioned to ride the approaching AR wave are those who are willing to experiment with it now.
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