• Advertising
  • AR
  • Augmented Reality

AR Advertising: A Ploy or the Future of Digital Marketing?

Constantine Sharandak
29 Oct 2021
8 min
AR Advertising: A Ploy or the Future of Digital Marketing?

Augmented reality (AR) became a buzzword in the tech industry a while ago. Brands are adopting AR in pursuit of higher customer engagement and conversion rates for all kinds of brands. Businesses increasingly consider embracing AR advertising and related services to beat the competition and capture customers’ attention.

Worldwide, consumer downloads of AR apps are expected to exceed 5.5bn by 2022, according to eMarketer. This is a significant increase from just over a billion downloads in 2016. Moreover, as International Data Corporation reports, global spending on AR and VR is projected to reach $72.8bn in 2024, bringing the five-year compound annual growth rate to 54%. 

These figures promise a bright future for AR. But what about its role in display advertising? Will AR become the future of digital marketing or is it merely another gimmick created by marketers? Let’s try to figure that out.

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    What is display advertising?

    Display advertising is an umbrella term for ads shown to users of mobile apps and websites. It appears in various formats including text, banners, images, video and audio. The main purpose of display advertising is to draw the attention of mobile app and web users to brands and the products they sell. 

    Display advertising is frequently referred to as banner advertising, although banners are only one of its formats. Banners are also the most notorious for causing frustration among web users. That frustration leads to the problem of so-called ad or banner blindness. 

    The ad blindness problem

    According to Mobile Marketer, over 50% of Internet users say they never click on banner ads, finding them disruptive and intrusive. Flashy banners cause overall fatigue with ads on the Internet, making it more difficult for brands to get their message across. 

    Although for many users, the frustration is only a matter of wanting to stay focused on the content they’re reading or watching without distractions, for others, banner ads cause more discomfort, and they resort to ad blockers. Ad blockers are one of the biggest challenges for programmatic advertising.

    Using AR for advertising is a legit move for marketers who want to create more engaging ads, build an emotional connection with customers and yield higher conversion rates for businesses.

    What is an AR advertisement?

    AR advertising can be defined as a mobile ad unit that uses a smartphone camera to superimpose virtual objects or 3D models of products or game characters, for example, onto the real world environment of an AR app user. Basically, an AR advertisement is what you see on your smartphone’s screen after pointing the camera at a special marker on a surface that appears as a QR code in most cases.

    There are a variety of tools for creating AR experiences and the choice of tool  depends on the complexity of the task.  Tools such as from ARKit and ARCore have SDKs that integrate with iOS and Android smartphones. Other tools, like Wikitude, MaxSt, are platform independent.

    Types of AR marketing campaigns

    People are getting more exposed to 3D and AR through ads as more and more brands take on the technology to incorporate it into marketing campaigns. Sephora, M&M’s, Burberry, Gucci, Nike, Toyota and Jack Daniels are some of the brands that have jumped into the AR marketing fray.

    AR marketing campaigns come in all shapes and sizes. Let’s examine some of the most popular cases.

    Marker-based AR activations are probably the most widespread type of AR ad integration. Jack Daniels used AR for its retention campaign, giving users of its branded app access to three AR experiences in one advertisement after they scanned the label on a bottle of Jack. The experiences include a tour of the company’s headquarters in Tennessee, an overview of the distilling process and stories about the whiskey’s namesake.

    AR Advertising: A Ploy or the Future of Digital Marketing? - photo 1

    This is a common type of AR marketing strategy for the spirits industry, used by Bombay Sapphire, Shackleton Whisky and Jim Beam, among others.

    Mars Wrigley used the technology in the form of an M&M ARcade during the launch of its caramel flavor in 2017. The company allowed fans to engage in an interactive experience by pointing their smartphones at billboards in Times Square, which transformed the static advertising billboards into an AR gaming arcade. This is a classic case of merging playable ads with AR ads.

    AR Advertising: A Ploy or the Future of Digital Marketing? - photo 2

                            Photo by Jason DeCrow/Invision for M&M’S/AP Images

    But if there were an award for the highest number of successful AR integrations in promo campaigns, Burger King would probably take the top prize. The company launched several highly successful AR advertising campaigns worldwide, taking a swipe at McDonald’s, their direct competitor. In the Escape the Clown campaign, users of the AR app got a free burger if they scanned a free McDonald’s leaflet and got to the nearest Burger King within a specified timeframe. The campaign garnered a 180% increase in downloads of their app. The Burn That Ad campaign in Brazil, which scooped up a prestigious Cannes Lions award, used a marker-based AR filter that let app users virtually burn competitors’ ads to win a free burger. Burger King said the campaign generated a billion impressions and raised in-app sales by 54.6%.

    AR Advertising: A Ploy or the Future of Digital Marketing? - photo 3

    Burberry’s promo campaign took the technology even further by setting up the first social media store in Shenzhen, China. One feature let store visitors scan the QR code on a product to unlock additional content in a custom program that contributed towards earning Burberry’s social currency developed as part of the immersive experience.

    AR Advertising: A Ploy or the Future of Digital Marketing? - photo 4

    Benefits of incorporating AR in marketing strategy

    The examples mentioned above are quite telling. They show that AR advertising can be fun and interactive, and can bring numerous benefits to business while entertaining customers:

    • Higher conversion rates. According to Shopify, AR ads outperform traditional display ads, generating 94% higher conversion rates compared to ads without AR/3D components. An immersive advertising experience helps customers make better buying decisions by providing more additional information about products. Also, AR helps package a call-to-action message into an interactive experience that’s difficult to escape.
    • Better user engagement. Around 65% of consumers use AR to have fun, according to a report by Deloitte Digital and Snap Inc. Modern customers expect more personalized and engaging experiences while shopping, and because users can interact with them, AR ads are more engaging than static 2D ads. They absorb users’ full attention, prompting potential buyers to learn more about a product. Brands that embrace AR technology stay ahead of the competition, and those that don’t risk lagging behind. 
    • Stronger emotional connection with customers. Immersive experiences created by AR ads build an emotional connection with customers, leading to positive associations with the brand. This turns a brand into a lovemark. Moreover, research studies revealed that memory encoding is 70% higher with AR experiences than with regular 2D ads.
    • Increased sales. AR advertising helps businesses boost sales, which has been especially evident during lockdowns and quarantine curbs. When traffic to brick and mortar stores stopped, immersive ads delivered through 3D product galleries on the web or in mobile apps kept the ball rolling. Brands offering custom AR experiences were 41% more likely to be considered by customers, and nearly three in four consumers said they were willing to pay more for a product that they could explore with AR, according to Deloitte Digital and Snap Inc.
    • Younger audiences reached. AR technology is becoming a part of everyday life for young audiences. Media sometimes refers to Generation Z as Generation AR for a reason — young users are early adopters of AR and their interaction with the technology is highly likely to increase in the coming years. If brands want to reach young audiences, they should integrate AR into their marketing strategy.

    “With 74% of global consumers expecting augmented reality (AR) to be even more important in their lives in the next five years, AR has the power to redefine a brand’s digital customer experience and mobile engagement,” Deloitte says. 

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      Challenges of AR advertising

      Despite these advantages, integrating AR into a brand’s marketing strategy has some challenges that businesses should consider before venturing down this path.

      First of all, AR advertising requires that users have a smartphone. Although the number of smartphone users is growing daily, for certain regions this can be a challenge. 

      Also, as with any tech-based solution, customers might experience glitches interacting with AR ads, like temporary errors or frozen images. This can be really annoying for users. However,  as technology advances, solutions become more reliable. What’s more, no digital marketing channel, with or without AR, is immune to technical glitches. 

      The biggest challenge is the technical expertise needed to develop an AR-powered app or AR ads. If a company doesn’t have their own technical team, they have to outsource the project to someone with the right expertise. Specialists at Postindustria help brands deliver innovative solutions for AR advertising and related services. Leave us your contact details and we’ll discuss your custom AR project.

      To bet or not to bet on AR?

      After weighing all the pros and cons of taking on AR and making it part of your brand’s marketing strategy, it’s obvious that AR advertising is set to become huge and businesses should consider it to beat the competition. 

      Results speak in favor of AR and I foresee a flurry of activity in this domain. More brands will continue to put significant effort into outplaying each other in the AR game. I’m strongly convinced that AR advertising is a legitimate alternative to traditional display ads, TV and print ads. This is why the sooner brands get AR under their belt, the more opportunities they will see for growth.

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