Whether trying on virtual sunglasses over Instagram or touching up appearances on a Zoom call, people have by and large grown more comfortable with augmented reality tech during the pandemic. That newfound familiarity could pose opportunities for an ad format not always associated with gripping engagement: mobile advertising.
A recent survey from Swedish telecom company Ericsson’s mobile ads platform, Emodo, found nearly three-quarters of consumers would be more likely to pay attention to an ad that incorporated AR elements and about 70% said they would like to see more ads that do so in the future. Meanwhile, research firm ARtillery Intelligence projects found AR-based advertising—a sub-category distinct from other commercial applications like AR retail and gaming—to be one of the most lucrative growth areas for the technology, on pace to become a $2.4 billion market this year.
Such momentum comes at what could be a pivotal moment for augmented reality. As social platforms and developer tools make it easier than ever to build, big tech begins to once again experiment with AR headsets and the rollout of 5G networks promises to dramatically expand the scope of what’s graphically possible with AR.
“I’ve been in advertising a long time and I’ve never heard of 70% of people asking for more ads of any kind in any context,” said Jake Moskowitz, vp of data strategy and head of the Emodo Institute at Ericsson Emodo. “This was cross-segment, not just niche audience; these things appeal to a very wide range of consumers.”
Higher engagement
Emodo backed up those survey results with a series of test campaigns, including one for a national convenience store chain in which it saw around 3.79 times higher return on ad spend over traditional mobile display ads based on location data from Placed and FourSquare.
Moskowitz said these ads can span the purchase funnel from brand awareness campaigns to try-before-you-buy activations. They typically run across social platforms like Facebook, Instagram, TikTok and Snapchat, but can also appear in display formats such as Google Swirl, which allows consumers to manipulate products in three dimensions.
Poplar Studio, a marketing agency that specializes in 3D and AR experiences, has sought to build a reputation for mixed reality as a performance marketing tool in its own right rather than a novelty add-on for existing campaigns. The shop has run campaigns for big brands like Nestle’s Purina (171 million impressions, according to Poplar), Maybelline cosmetics (2.9 billion impressions, per the agency) and Speedo, which have netted tens of millions of impressions across platforms like Facebook, Instagram and Snapchat.
David Ripert, co-founder and CEO of Poplar Studio, said the reach the agency has seen with its campaigns has pushed its client roster beyond the types of brands that typically traffic in AR—apparel, makeup and entertainment—to staid financial institutions and insurance companies, such as Crédit Agricole, PostFinance and Compare the Market, which see it as a way to make interactive content that might otherwise come across as dry in another display format.
“The ROI is there and the metrics that we now see with our clients are super impressive in terms of getting to millions of people [and] getting an engagement time of 30 seconds all the way to two minutes, which is much bigger than you’d get through video,” Ripert said. “So those types of clients now see AR is more interesting potentially than video or display ads in terms of a pure format.”
5G will be key
While advertisers are starting to see returns on AR, agencies working in the space say the graphics and data capacity of what they are able to build remains limited by wireless network constraints. They expect 5G networks to change that—at least once they are fully realized—allowing support for more in-depth graphics and higher speeds.
Ericsson has found that 5G has become more mainstream among consumers than ever—at least in terms of the number of people who are aware of the concept and those who own 5G-capable devices. While the current state of 5G connectivity is still far from the full potential promised for the networks in terms of speed and data, Ericsson’s latest mobility report estimated that by the end of 2020, at least 1 billion people—15% of the world’s population—had access to some form of 5G.
Yet despite that widespread availability, PwC principal Dan Hays said it has yet to translate into any actual improvements in AR beyond experimentation in densely packed areas like sports stadiums or arenas. But as the rollout progresses in the coming months, Hays said he expects to see the floodgates open in terms of what kinds of AR ads devices can support.
“Over the past few months, we haven’t yet seen AR really achieve any significant milestones,” Hays said. “But there is a bit of a chicken and egg problem in that AR really requires some degree of ubiquitous 5G capability that most places don’t yet have.”
Other factors are also helping to contribute to the growth and attractiveness of AR ads. Social platforms like Instagram and Snap and developer kits like Apple’s ARKit have reduced the time it takes to create AR ads from multiple days to a matter of hours. Companies like Snap and Facebook are also starting to once again invest in headgear wearable devices to facilitate AR, betting the public may finally be ready to accept such gadgets.
