The Fender Telecaster. The Wah-wah pedal. The 45rpm vinyl. Technology has always sparked new and powerful anthems from the fingertips of rock stars. Or it should, when harnessed the right way. The same is true in marketing, and now, there’s a new kid on the block: augmented reality. Gareth May speaks to investigators and innovators about the latest tech to rock the brand landscape.

When Pokémon GO conquered the world’s imagination in the summer of 2016, everyone understood the potential of augmented reality (AR); it was a gateway to a Labyrinth-esque other world (sans Bowie and baby Toby).

The hype for the virtual animal hunting game eventually calmed, but Pikachu and friends had left their mark (and we’re not talking about the bizarre ‘Death by Pokémon GO’ study conducted by Purdue University). The world had a new dimension — and that new dimension was enabled by AR.

In the years that have followed, AR has established itself as an application for every kind of industry wishing to tell stories, educate, and engage people; and today AR applications are everywhere, playing a role in healthcare, recreation, and any other field you can think of. It’s the reason kids can play in invisible playgrounds and Grey’s Anatomy has had a 21st century revamp.

What began as an enjoyable way to spend an afternoon fast became a cultural phenomenon, giving rise to one of the most valuable emerging technologies of our time. So, what role can this magical tech play in marketing?

Crafty work

When pioneers of electronica, Kraftwerk, featured in a 1975 edition of Rolling Stone, the world was forgiven for thinking they had formed that year – such was the novelty of their music and the hysteria surrounding the bleeding-edge sound. But the avant-garde doesn’t arrive overnight.

Engine Creative has been providing digital branding, including AR solutions, to clients since 2011. Matt Key, managing director and co-founder, says their first foray into the medium was with Top Gear magazine, when they were commissioned to add an extra layer of content throughout the magazine in what was one of the first use cases of AR in the UK.

“AR provides things that you can’t do in any other medium.”

Matt Key, managing director and co-founder. Engine Creative

“As soon as we saw what AR could do, we jumped on it. We knew it was going to be a new marketing challenge that brands would want to be all over. It provides things that you can’t do in any other medium,” Key says.

Still, initial use cases of AR failed to capture the imagination. Big brands that took it on did so without understanding the role it could potentially play in creating a better buying experience for customers. They stayed within the lines of what was expected. When Starbucks — pioneers of mobile pay — turned to AR in 2012, they saw it purely as a gimmick; a way to turn cups into Valentine’s Day cards. Kooky, but hardly cool.

Six years on and AR has earned the respect of investors and innovators — and with both Apple and Google pumping money into the emerging sector (some have called it the ‘next battleground’ for the two software companies), Digi-Capital predicts the AR industry will reach $90 billion in revenue in five years.

It’s crucial, then, for brands to harness the power of AR and implement it as part of a modern marketing strategy. According to a Netimperative poll of 100 marketing managers in the UK, 72% plan to use AR in the next year.

Not before time. The next generation of digital natives, the ‘digital-first Gen Z’, as Key calls them, will account for 40% of all consumers by 2020 — and with daily screen time 10 times higher than it was seven years ago, marketers will have to tap into this new generation with authentic experiences, knowing that AR isn’t new to them, but second nature.

Magic moments

AR is already exponentially transforming the way we buy both online and out and about. If you’ve ever wanted to get the Debbie Harry eyeliner look, or see if you could channel Noel Gallagher when you wear Ray Bans, now you can, in the safety of your home. Virtual makeover is changing the face of the beauty industry; Land Rover has let customers ‘drive’ their SUVs by clicking on a banner ad; and Snapchat is enabling portion control with AR-functioning menus. AR is traveling fast. “We don’t want to augment one image or page anymore,” says Key. “The whole world can be augmented now.”

Pushed to its limits, AR is a magical thing. It can even fill a shopping mall with wild animals. The work of AR specialists Lemon&Orange for VISA, in Poland, is one of the largest interactive AR-based campaigns in the world. “In the hands of a creative mind, AR is limitless,” says the project’s manager, Karolina Nowicka. But, she’s quick to add that while AR campaigns can bring wonder to an audience, there’s a method behind the fun: “When something blurs the edges of reality, people rarely walk past unfazed.”

Figures show AR campaigns do indeed bring an unprecedented level of consumer interaction, with dwell times between two to three minutes and big boosts to click-through rates (CTR), says Key. Indeed, the Land Rover campaign had a CTR of 38%, three times that of a traditional media banner.

“With most digital advertising, consumers just don’t notice it anymore,” says Key. “For AR, we’re seeing massive engagement compared to traditional forms of advertising.”

The third dimension

IKEA’s AR solution (created with Apple’s AR development platform ARKit) is an example of what AR can do today. The smartphone app lets consumers place any of the company’s 2,000 products in its catalogue – from rugs, to sofas, to lamps (to scale) – anywhere in a room in your house, via the camera on your phone.

Mathew Chylinski, of the UNSW Business School in Australia, is a lead researcher at Augmented Research, a global team of academics dedicated to exploring the value of AR technologies for consumers and marketers.

Their research has found that when AR lets a consumer manipulate an object virtually (objects that are ‘embodied’) and that object is placed in a contextual environment (i.e. ‘embedded’ in a living room), far more value is derived from the experience than the conventional means of consumer interaction.

“AR takes away an abstract part of the visualizing process and replaces it with more information, facilitating a new and improved approach to decision making.”

Mathew Chylinski, of the UNSW Business School, lead researcher at Augmented Research

In a brochure or online, Chylinski explains, a sofa is removed from its ‘context of use’ and we have to use our mental capacity to envision it in our living room. But AR bridges this gap. It lets people simulate how a product would function in a certain space. “It takes away an abstract part of the process and replaces it with more information, facilitating a new and improved approach to decision making [as long as it is both embodied and embedded],” he says.

Key, who is developing a similar app for Argos, believes it won’t be long before ‘product visualization’ is part of the 21st century purchasing journey. “Replicating 3D objects that you interact with is something brands have been trying to do with e-commerce since it started. AR is the natural evolution,” he says.

How soon is now?

Yet ‘product visualization’ is only the tip of the AR iceberg. In musical terms AR is a band with a standout debut album. There’s much more to come from these young bucks.

Chylinski, for one, believes we’re currently at an inflexion point, with current investment comparable to the early days of the internet — and once AR tech has miniaturized and developed to the point that it becomes unobtrusive (i.e. when we no longer rely on our phones to facilitate AR but it is integrated into our sunglasses, for example), we will then see profound implications for marketers and consumers.

Consider future retail spaces. Today, customers look around the shelves for a product, they take their time, and get distracted by advertising. AR will bypass a lot of this, Chylinski explains. “AR will guide a consumer’s search, point out relative products, remove packaging, and only highlight a product a consumer wants to see. AR will increase the value of these products, and as a result we will be more inclined to buy and pay more for it,” he says.

But AR isn’t just about replicating 3D objects. If we consider AR as essentially an overlay of digital information on the view of the physical world, it has the power to change consumers’ perceptions, introducing whole new notions to their relationship with a brand.

Engine Creative is currently working with a luxury audio brand; but they’re not showcasing how its high-end speakers will look in a living room space or bedroom; Key and his team are unveiling the speaker’s hidden information. They’re giving a physical form to sound waves, showing consumers how they bounce off walls, how they create the best listening experience if you’re sat or reclined in certain areas.

“AR allows you to really drill down in an emotional way to what you want to say as a brand.”

Mathew Chylinski, of the UNSW Business School, lead researcher at Augmented Research

“If you’re talking about audio equipment that costs thousands of pounds, you can photograph that, you can say what it does online; but you can’t bring it to life. AR allows you to really drill down in an emotional way to what you want to say as a brand,” says Key. But, he warns, just because AR is the next big thing, doesn’t mean it’s the right solution for every brand. “The application has to provide a real benefit for the client, and the consumer.”

For the time being, brands are best to play it safe. “The most important thing is for a brand to simply include AR in its marketing strategy,” Nowicka says. “One-time AR campaigns are great, but providing customers constant access to this technology will definitely improve long-term satisfaction with the brand, and as long as the customer feels engaged and is given information that leads to a better understanding of a product, AR will be so much more than just a flashy new technology.”

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