3D&AR
December 1, 2022

Why augmented reality advertising is the next big step for brands

Integrating augmented reality advertising into marketing strategies is enabling brands to connect better with their consumer base and create engaging customer journeys.

Key takeaways: 

  • AR helps brands deliver innovative, interactive, and customized content to their customers
  • The technology can be used for creating immersive advertisements, try-on products, hyper-localized advertising, and connected packaging
  • Brands like Ikea, Home Depot, and Pepsi Max have increased sales and customer engagement by incorporating AR into their advertisements

In 2015, Visa ran an augmented reality (AR) advertisement in four Polish shopping malls. The payments company wanted Polish residents to have a novel yet engaging experience through the campaign. So, it installed a 15-meter-wide screen and cameras to capture people. When customers entered a spot marked by a white circle, the screen displayed 3D projections of animals such as pandas, bears, and giraffes around them. As a result, they could interact with different ‘virtual’ animals and even change the scenery.

Over the years, customer demand for personalized and engaging marketing efforts has grown. A Mckinsey & Company report shows that over 71% of consumers expect some form of personalization in marketing efforts today. This is why many brands are adopting new technologies like AR to create novel buyer experiences.

How are companies using AR for advertising?

Many businesses are already using the technology to create immersive advertisements and customer journeys. And the revenue from such efforts is projected to reach 113.3 million USD in 2022

Brands use AR to layer digital projections of objects onto real-world surroundings and help users interact with these objects through digital technology. This makes for a more engaging experience than a traditional advertisement wherein the buyer is a passive observer.

Besides, companies are using AR today to allow buyers to try products as a part of their advertising campaigns. This is an incredibly convenient but effective way to create an engaging experience for potential buyers while helping them make confident purchase decisions.

Businesses are also engaging in hyper-local advertising through AR apps. Here, users can find nearby store locations by holding up their cameras, and receive discounts and offers in-store.

Some companies even invest in connected packaging to market their products and encourage repeat purchases. Customers can point their devices at the product and access AR content. This makes interacting with packaging engaging and allows businesses to integrate touchpoints to advertise their products.

Benefits of incorporating augmented reality advertising

The average American is exposed to between 4,000 and 10,000 advertisements a day, yet notices less than a hundred of them. It’s safe to say then that brands need to grab customer attention quickly in order to make an impact. This is an even harder task in a digitalized market wherein many brands have access to the same resources. But engaging in augmented reality advertising can help brands stand out by;

These numbers show that the market for engaging customer experiences is rising. And AR can help with this by providing immersive customer journeys no matter where the customer is located. This, in turn, helps brands reach out to a global audience.

  • Boosting sales while reducing returns: With AR technology, brands offer an in-store experience to their consumers. They can visualize products and interact with them by changing their orientation, structure, and size, amongst others.

This removes the guesswork from the online shopping experience, boosts sales, and reduces product returns. 

A recent survey also found that 61% of online shoppers prefer sites offering AR technology, 63% say it improves their shopping experience, and 35% say the software encourages them to shop online more often. 

This means that AR software is not a passing trend, but rather a major indicator of the future direction of retail. And by integrating AR advertisements into their business strategies, brands showcase themselves as future-proofed market leaders.

How can brands create augmented reality advertisements?

Brands can create augmented reality advertisements by partnering with AR companies like Enhance, who can craft interactive customer experiences depending on the product and its purpose. This includes 3D WebAR projections, which create engaging on-site experiences and virtual showrooms.

Enhance helps integrate these AR experiences on different platforms, and gives insights into customer interactions with AR objects. This sheds light on customer engagement and the success of the advertising campaign.

Successful augmented reality advertisements: IKEA, Home Depot, and Pepsi

In 2017, Ikea introduced a Christmas edition of their established AR platform. With their mobile app - Ikea Place - users could use their smartphone cameras to visualize how Ikea’s tree options would look in their living room. Ikea drove user engagement by enabling customers to see the Christmas tree from different angles, and with a range of possible decorations. 

Another example of a successful augmented reality advertising comes from the US home improvement giant Home Depot. In 2020, the retailer introduced an AR feature on its mobile app, enabling customers to view their e-catalog products in their homes. With the help of AI tools, customers could identify products in their showroom, explore item details, and confirm whether they were in stock. As a result, Home Depot witnessed a 14% increase in online sales against previous quarter figures.

Finally, in 2014 Pepsi Max launched an augmented reality advertisement wherein bus stop billboards were turned into AR screens. They made Londoners believe the boards were see-through and projected exciting content like UFOs and giant robots crashing through the streets. Pepsi Max saw sales rise by 35% YoY for the time the campaign was live, indicating the augmented reality advertising success.

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