Augmented reality by IKEA

5 Things Marketers Need to Know About Augmented Reality

Imagine customers could actively participate in your brand story. Or they could try out your products right from their homes – no shipping required?! Augmented reality let’s you do this, and much more.

Augmented reality (AR) is a new technology that allows marketers to merge digital content with the real world. Many observer think that it is the next big thing in marketing – after social media and mobile marketing. I think so too, and this is why I am focusing my academic career on AR.

I am a marketing professor at Cal Poly who explores augmented reality marketing through rigorous academic research. I find – again and again – that AR has immense potential for boosting brands and designing outstanding customer experiences. Yet, many marketers don’t know where to start, or they are disappointed by the returns on their AR investments. 

My goal is to help the marketing community – and this includes you – to realize the full potential of this exciting new technology. This post offers a starter guide to introduce you to augmented reality and its potential for marketers.

What is augmented reality?

Think of AR as a layer wrapped around the physical world. Marketers can create their own layers to enrich customer experiences in myriad ways: Additional product information, entertaining games, rich storytelling, head-up displays,… your own imagination is the only limit.

Consumers can view these layers via smart phones, smart glasses, digital screens, or holograms. When deciding whether to use private or public devices, it is important to consider your marketing goals as well as the customer experience you plan to provide. More about this in a later article. (Subscribe to our free email updates to be the first to know).

How does this all fit into your marketing program? Is AR a new medium? A device? An app? Or branded content? All of it and none. I prefer to think of augmented reality as a user interface.

Augmented reality is a new user interface

At its core, AR is a user interface that opens up radical new ways for designing customer experiences. Remember when smart phones came out and you got excited about their touch screens? It’s like that, except that with augmented reality, the whole world around you becomes the user interface.

Microsoft's Hololens turns the whole world into a user interface

There is more to it, but these are the bare-bone basics of augmented reality. So, how can you use AR in your marketing program?

Augmented reality brings brand stories to life

Marketers can use augmented reality to better tell their brand stories. Consider the AR campaign for The Walking Dead: A digital screen was disguised as a normal, transparent side panel of a bus shelter. At first, commuters did not pay attention to a “woman” who stood outside the shelter. But when “she” turned around and banged against the “glass,” commuters jumped up in horror. See for yourself:

Commuters suddenly found themselves in the middle of a zombie attack. After the initial shock faded, they realized that the zombies on the other side of the shelter weren’t real, but digital content integrated with a real-time view of the urban environment.

For a short moment, however, consumers didn’t feel like they were looking at an ad. They felt like they were part of the zombie apocalypse. The Walking Dead’s brand story had come to life.

Augmented reality creates novel customer experiences

Augmented reality does not always have to catch customers by surprise. And neither is it limited to marketing communications.

Integrating augmented reality into your marketing mix allows you create novel experiences that drive sales, boost word-of-mouth, foster brand relationships, and increase the value of your products.

You can use augmented reality to stimulate online sales. ModiFace Mirror lets consumers try out different make-up styles as photo-realistic 3D effects. Imagine what a beauty company could do with this app. Or just read how LVMH’s Sephora already embraces this technology.

You can also use augmented reality to provide your brand community members with a virtual gathering place. South African ice tea company BOS, for example, created an app that allowed its customers to plant a virtual forest as an expression of their shared love for the environment – and BOS ice tea.

Skip forward to 0:38 to see how BOS used augmented reality to nurture its brand community:

And of course, you can use augmented reality as a core feature of your product. BMW has recently announced an AR enabled motorcycle helmet that helps drivers keeping their eyes on the road. Start-up company Daqri offers a smart helmet for enterprise applications.

Augmented reality is taking off

Many of the world’s largest businesses – including Coca-Cola, McDonald’s, and IKEA (videos) – have already incorporated augmented reality in their marketing strategies. And this is just the start.

Coca Cola's Arctic Home Augmented Reality campaign

Analysts predict that augmented reality will “disrupt anything with a screen” and grow into a $120 Billion dollar market by 2020 – roughly the same as businesses in 2015 have spent on TV, print and radio advertisements combined.

But don’t jump blindly on the AR bandwagon: The novelty effect of augmented reality is wearing off fast, and spending money on flashy AR campaigns just for the sake of “doing AR” can be a big waste of precious marketing resources.

Instead, plan ahead to best leverage augmented reality’s potential. The biggest return on augmented reality investments will be reaped by those who are able to interweave branded content with the physical environments and social relations that make up consumers’ everyday lives.

In short: Create outstanding AR experiences by entangling content with context.

Smart marketers therefore know that it is essential to better understand this new technology: How does it fit into the marketing mix? How does it enable valuable customer experiences? And how does it align with marketing objectives. Those are the questions I am pursuing with my research agenda on augmented reality.

Where can you learn more?

Augmented reality is one of my research areas as a marketing professor at Cal Poly. After a year-long research project, I published “Augmented Reality: Designing Immersive Experiences that Maximize Consumer Engagement,” together with my co-author Andrew Smith, in March 2016. The article is available via Business Horizons and Harvard Business Review.

Our article is the first academic research paper on how managers can incorporate augmented reality into their marketing strategies. In this article, we offer terminology, a framework, and several strategies marketers can use to maximize consumer engagement through augmented reality. If you are marketing researcher yourself, a marketing agency offering AR services, or a brand manager interested in augmented reality, this article offers a tremendous resource for you.

ModiFace Augmented Reality app

Augmented reality is also an important component of my Digital Marketing and New Media course at Cal Poly. Located between Silicon Valley and the LA entertainment industry, we are ideally placed to explore the emerging AR market.

MarketingSquad publishes our most insightful analyses of augmented reality – written by academic experts and our best students. Our goal is to become your most trusted resource on how augmented reality can create immersive experiences and customer value. Grounded in rigorous academic research, relentlessly unbiased and completely free.

Secure your competitive advantage by staying in touch: follow us on Twitter (Jo, Andrew, MarketingSquad) and subscribe to free updates from MarketingSquad.

And if you have questions or suggestions, be sure to contact us. We look forward to hearing from you.

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