Has Your Brand Been Augmented Yet?
A Deep Dive into the Brand Opportunities & Best Practices of Augmented Reality
There is little doubt that Augmented Reality (AR) is one of the most talked-about innovation territories for brands and marketers. Ever since the breakout global hit of Pokémon GO two summers ago, AR has been high on the list of innovation-minded brands. Last year, both Apple and Google released their respective mobile AR developer platforms, ARKit and ARCore, laying the technical foundation for mobile AR and making it widely accessible for millions of smartphone users. On Monday, online shopping got a bit more interactive on iPhones and iPads with the wide release of iOS 12, which comes with a new Safari feature AR Quick Look. In just two short years, AR has overtaken the much-hyped Virtual Reality (VR) in both market attention and VC investments.
With all the intensifying buzz around AR, it is important to note that this is but the first stage in the evolution of AR — most of the in-market applications today concentrate on mobile AR, which benefits greatly from the massive built-in user base, solving the adoption hurdle that has hindered VR headsets from breaking into mainstream. eMarketer estimates that 15.5% of the US population are AR users. The penetration rate is growing at a healthy clip, and it’s expected to reach 20.2% by 2020. While the future of AR is undeniably in smart glasses and contact lenses, for now, mobile AR is more than competent for powering the AR use cases that exist today.
Mobile AR Presents Exciting Brand Opportunities
The global phenomenon of Pokémon GO demonstrated the power of AR in creating a new kind of mobile gaming experience that incorporates real-world locations and environments. The game has proven itself quite effective at driving foot traffic, as some small, local businesses can attest. Before long, QSR brands like Starbucks and McDonald’s signed on as partners to capitalize on the worldwide craze.
While the hype around Pokémon GO calmed down a while ago, the race for entertainment brands to create their own hit mobile AR game is just starting. Several major studios have launched their own GO-style games in a bid to promote their franchise IPs, including Jurassic World Alive from Universal, Ghostbusters World from Sony, and The Walking Dead: Our World from AMC Network. Warner Bros. is also working with Niantic, the company behind Pokémon Go, on a Harry Potter AR game that uses a lot of the same elements as the breakout hit.
Besides full-blown AR games, many others are also leveraging mobile AR mini-games and game-like experiences to drive foot traffic and add some interactive fun into their marketing campaigns. For example, 7-Eleven ran a Deadpool-themed campaign with 20th Century Fox, allowing fans to “meet” Deadpool by way of an AR experience that they could unlock at stores nationwide within the 7-Eleven mobile app. The campaign was a hit and now 7-Eleven is doubling down with a football-themed AR mini-game. At IFA 2018 in Berlin, Samsung invited attendees into the Griffin residence of Family Guy via mobile AR to showcase some of its smart home products. Last week, Verizon Wireless announced a promotional stunt in which customers can win an iPhone XS by participating in AR scavenger hunt game via Snapchat.
The Rise of Non-Gaming AR Applications
As fun as those branded experiences are, they are the low-hanging fruit of AR’s marketing applications. Mobile AR, much like VR content, took off with gaming, so it makes sense for brands to start with the gaming angle as they jump on the AR train. Thanks to recent updates to the aforementioned AR developer platforms, however, more and more non-gaming AR applications are emerging as developers and brands work to figure out the best product-market fit for mobile AR, whether it’s using AR to enhance business cards or newspapers, or to help you locate friends at a crowded music festival.
IKEA’s virtual furniture shopping Place app is a prime example of how mobile AR can contribute to the brand experience by adding the value of utility. Since launching on iOS devices last September, the app has been downloaded over 2 million times, and around 1 million people use it repeatedly. Similar 3D furniture preview apps include ones from Wayfair, Houzz, and Pottery Barn. According to an Adtaxi survey via eMarketer, about 10% of US internet users have used an AR app or feature that lets them view furniture in their homes or try on apparel, with another 45% indicating they’d be interested in trying out the technology.
The success of IKEA Place demonstrates the great utility value that mobile AR enables for ecommerce by facilitating product preview in real-world environment. And soon, online shoppers won’t need to download specific apps in order to try out such AR previews. For instance, ecommerce platform Shopify has created a 3D Warehouse app that utilizes the AR Quick Look feature in iOS 12 to make AR product previews more widely available for online merchants and shoppers. 3D assets of products in Apple-designated .usdz file format can be uploaded directly to online Shopify stores and viewed in AR right within Safari. Usdz files are also easily shareable, enabling shoppers to share it via messaging or social channels if they are looking to get a second opinion.
There is no doubt that mobile AR will revolutionize the online shopping experience. A survey from Retail Perceptions shows that 61% of shoppers prefer retailers that offer augmented reality experiences, 71% would return more often and 40% would pay more for a product if they could experience it in AR. Besides using it for product previews, new innovative shopping experiences could be designed with mobile AR. For example, Trail Shop by Outdoor Voices is an AR shopping experience for the athleisure brand’s new running line where customers are encouraged to visit a running trail to unlock exclusive items.
Looking beyond retail, other cool examples of utility-driven branded AR applications are also starting to emerge. For example, Royal Dutch Airlines (KLM) is making things easier for its travellers with an AR update to its iOS app that allows them to place a translucent virtual suitcase over their own luggage to check if it’s within the stipulated dimensions for flights. Both LATAM Airlines and flight-booking site Kayak have also unveiled similar AR features this month. Shrinking carry-on bag sizes have been a source of frustration for fliers in recent months, and AR features like this add real value to the customer experience.
As time goes on, we expect more brands to continue exploring the non-gaming side of AR applications. It holds a lot more promising use cases that are waiting for brands to bridge the gap between the physical and the digital in their brand experiences. A food or CPG brand may use mobile AR to inform customers about the nutrition value or other relevant information about their products via smart packaging. A hospitality brand may consider using AR for indoor navigation throughout their properties. Even mobile advertising could become more expressive and three-dimensional with the help of AR. In order to do so, brands will need to keep up with the major players in the AR space.
The Major Players & AR Platform Owners
As previously mentioned, AR applications are heavily concentrated on mobile at the moment. This means that Apple and Google, by virtue of owning the two dominant mobile operating systems, are the two leading players in mobile AR, as they compete against each other to set the pace for its advancement.
Apple is well positioned to capitalize on the rise of mobile AR. CEO Tim Cook regards augmented reality as revolutionary, something that will “change the way we use technology forever.” To that end, Apple has fully embraced AR with ARKit, its developer platform for AR experiences. ARKit-powered apps surpassed 13 million downloads in the first six months of its launch, with 47% being games, 14% utility apps, and 11% lifestyle apps. And with the launch of iOS 12, AR Quick Look in Safari will further push AR experiences to a wider range of iPhone users.
It is worth noting that Apple enjoys a unique advantage in deploying mobile AR experiences, thanks to its tight integration of hardware and software. The new iPhones, for example, will be able to power some next-level AR experiences, thanks to both ARKit 2.0 and the new A12 Bionic chip, the latter of which packs incredible processing power that enables the kind of real-time computer vision necessary for powering complex, multi-person AR experiences. For example, Homecourt is an AR tool for basketball training that Apple demoed on stage at the latest iPhone launch event. It utilizes the space mapping and motion tracking capabilities enabled by the ARKit and advanced cameras on the iPhone to recognize the placement of the court and hoop, tallying up makes and attempts among other crucial details.
Beyond mobile, it is no secret that Apple has also set its sights on developing an AR glasses product. The Cupertino company recently acquired Akonia Holographics, a Colorado-based startup that focuses on making lenses for AR glasses. According to respected Apple analyst Ming-Chi Kuo, Apple could release a pair of AR smart glasses in 2020. While that might be an optimistic estimate, it is likely that the first few editions of AR glasses could be positioned as an iPhone accessory before gradually maturing into a standalone product, similar to the way Apple Watch has grown. Of course, there would even be more unforeseen, exciting use cases for brands to explore once AR is freed from the confines of mobile devices.
Google owns the Android half of mobile AR with ARCore, which leapfrogged its existing Tango project that started in 2014, but required special sensors beyond the camera to work, and therefore failed to widely roll out. Compared to Apple, the fragmented Android ecosystem poses significant challenges for Google to push a coherent mobile AR experience across the board. And Google, being a software-oriented company at its core, seems far more interested in incorporating AR into its existing products (Google Lens for visual search, or an upcoming AR-powered navigation mode in Google Maps, for example) than building a robust mobile AR platform. Time will tell if Google will be able to keep up with Apple in terms of advancing AR on and beyond mobile. But if the failure of Google Glass offers any lesson, it is that design matters, and you can’t force something that is not technologically ready and too far ahead of consumer behavior.
Besides the OS duopoly, Facebook stands out in the current mobile AR landscape as one of the few cross-device, mass-reaching AR platforms available today. The social network first announced its AR platform, AR Studio, at its 2017 developer conference, before opening it up to all third-party developers in December and thus making it accessible to all brands looking to deploy branded AR experiences via Facebook. In February, Facebook added the support for AR objects in its News Feed, further increasing the exposure of AR experiences on its platform.
Most recently, the company also started testing AR ads in the News Feed, which will no doubt allow brands to experiment with more engaging and interactive Facebook ads. For example, one of its launch partners L’Oreal is bringing its ‘try before you buy’ AR tech to Facebook, allowing cosmetic lovers to virtually try on products that they see straight from their News Feed. Facebook’s biggest advantage in mobile AR is its massive, device-agnostic global reach, and brands would be smart to leverage Facebook’s ad products to push their branded AR experiences and tools to a wide audience. With Instagram quickly embracing social commerce, it is not hard to envision a near future where Facebook leverages AR to enhance the shopping experience on Instagram.
As a self-claimed “camera company,” Snapchat positions mobile AR at the core of its identity and innovation strategy. Once considered a pioneer in the mobile AR space by bringing selfie lenses into the mainstream, it is now increasingly being outpaced by the three tech giants mentioned above. Nevertheless, the company is still trying out a variety of different approaches to monetizing its AR products. It introduced sponsored World Lenses last year, turning its AR experience from faces to real-world surroundings. It launched a set of Lens Studio tools in March to allow any creators to share their AR creations. In June, the company introduced new programmatic purchasing for its AR Lenses, allowing brands to purchase and deploy AR Lenses via ts self-serve ad-buying tool.
Facing mounting competition from Facebook (Instagram in particular) and slowing user growth, Snapchat is understandably focusing on monetization at the moment, which explains its continued push to make advertisers and brands consider AR lenses a necessary part of their marketing strategy. This spells great opportunities for brands, especially those seeking to reach a younger set of audience. Shoppable AR Lens is a popular ad product on Snapchat, having been employed by the likes of Nike and Drake to engage with fans and drive sales. Snapchat is a youthful and spontaneous brand, and AR Lenses suit that playfulness well, but the challenges remain for Snapchat to maintain its user base and keep coming up with delightful mobile AR creations.
Amazon is a big question mark when it comes to AR. We know that Alexa was born out of a secret AR project, but the ecommerce giant has yet to release any significant AR features or products, save for a rudimentary AR product preview feature it tucks away in its mobile apps. The company’s innovation strategy seems to be solely focused on its voice assistant Alexa at the moment, but we wouldn’t count it out of the race just yet, especially considering AR’s potential impact on the ecommerce experience. The company reportedly filed patents applications for enterprise-oriented AR goggles to help improve the productivity of its warehouse workers, although no such product has been confirmed so far. And it did launch a Sumerian platform for creating high-quality web-based VR experiences, whose 3D objects could easily be used to create AR experiences.
Looking beyond mobile AR, Microsoft is currently leading the AR headset market with its HoloLens. Although its high price tags and complicated setup renders it rather inaccessible for the mainstream consumers at the moment, HoloLens is already being utilized by brands like Rémy Martin and Ford to create next-gen AR activations. The company recently added HoloLens AR headset demos to its retail stores, hinting at its ambition for a wider consumer reach. An updated version is reportedly coming out early next year and hopefully it will make HoloLens a more compelling product.
Magic Leap first teased the much-hyped release of its first product last month, and with the high price tag revealed and limited availability at launch, it has become pretty clear that this is highly unlikely to be the AR hardware that will bring augmented reality to the mass consumer market. And it is probably not a good sign that the company has already lost its VP of product marketing Jeff Gattis, who was in charge of both marketing and product management, just one day before the product officially starts shipping. It is unlikely that this product will be able to catch up with the two-year head start that Microsoft has had with HoloLens.
Brand Takeaways
Augmented reality is being buoyed by advancements in smartphone cameras and computer vision and holds great promise in changing the way consumers interact with brands. Although it’s still in its early stages of development, AR — and specifically mobile AR — presents a slew of interesting brand opportunities for marketers to explore.
Obviously, not every brand will have the resources to develop their own custom AR apps, nor are customers guaranteed to want to download them. Creating fun AR-powered mini-games and game-like experiences, however, is a fun, immediate opportunity for brands to add some interactivity to their mobile campaigns. They can also extend the value of the experience and create social media experiences that make use of the camera to add a sense of personalization into the mix. When doing so, however, brands should consider making the AR experiences cross-platform in order to reach the widest range of audience possible.
The rise of non-gaming AR applications also points to new ways for brands to explore utility-oriented AR experiences that add value to customer experience. One perk of doing so over the AR gaming route is that your customers may be more likely to actually try it and engage with your brand, provided that the AR tools provide them with convenience and help close the gap between the physical/digital divide for a more cohesive brand experience.
Given that platform owners like Facebook, Snapchat, and Unity have all started testing their respective AR ad products, brands may also consider experimenting with AR ads on those mass-reach platforms to engage and delight consumers. In addition, AR can also be employed to enhance print and OOH campaigns with contextual information and interactivity, for which some pioneers are already paving the way.
If all of these seems rather overwhelming, then creating 3D brand assets is a simple step for all brands to start dipping a toe in the AR ocean. A lot of the aforementioned AR applications start with building 3D objects of brand assets, which are then plugged into the various AR platforms to build out various games, experiences, and utility tools. Therefore, brands would be smart to get 3D branded assets ready today to get ahead of the AR adoption curve and have them handy in case products need to be incorporated into AR content and experiences, be it organic or owned.
