This post is an excerpt from eMarketer’s report, Augmented Reality Marketing and Advertising 2018. It includes data and commentary from ARtillry Intelligence.

AR Advertising Starting to Show Results

Paid advertising represents just a portion of total AR-related marketing and promotional activity, but the ecosystem is rapidly expanding. ARtillry’s Boland believes that AR will play a major role in the evolution of digital advertising. Over time, he sees it shaking out into two major formats: AR display and visual search. In ARtillry’s most recent forecast of global AR advertising revenues, paid AR ad spending will grow from $166.7 million in 2017 to more than $2.6 billion in 2022. AR search (e.g., paid opportunities that will someday be available via Google Lens and/or Bing) will start to pick up in 2020, though display will still comprise the majority of ad spending throughout the forecast period. ARtillry’s definition of AR advertising revenues includes money spent on direct, paid AR ad buys and excludes other marketing spending and app development.

AR Ad Revenue Projections

Display Advertising

So far, experiments with AR display ads have yielded higher awareness and engagement than regular display.

For example, Blippar recently tested its new ARDP ad units with Jaguar Land Rover and Unilever’s Magnum Singapore ice cream brand. The Land Rover ad launched from a banner and let users sit in the driver’s seat of a new car, explore its features in 360 degrees and look out the windows. Magnum Singapore let users pile various toppings onto an ice cream bar, then receive a coupon and directions to a store. In an April 2018 blog post, Chris Bell, Blippar’s regional director and commercial head of APAC, said the new units had increased brand engagement by 30% and increased dwell time elevenfold over standard Google rich media ads.

Oath, the Verizon-owned amalgam of what used to be AOL and Yahoo, is testing novel takes on older formats. Working with The Home Depot, it developed a new unit that would launch from a banner ad in its Yahoo Mail app. The ad enabled viewers to interact with and place various holiday decorations on a Christmas tree that could be viewed in their own home. “The ultimate goal [was] driving traffic to [The Home Depot’s] website so customers could further explore the range of products available,” Oath’s Lucas said. Results were positive: Users spent more than 2 minutes interacting with the AR ad, “10 times more than the benchmark for mobile rich media.”

Carolina Arguelles, product marketing manager at Snap Inc., said her company closely studies how AR drives impact in all parts of the marketing funnel and provided an example of some mid- and upper-funnel statistics. “From the hundreds of campaigns that have run, we’ve
seen that, on average, our Lens campaigns drive a 19-point increase in awareness,” she said. “It’s a really sticky impression. You’re spending an average of 10 to 20 seconds with the brand compared with just seeing a mobile banner ad.”

There are also indications that AR is preferable to other ad formats. The Vertebrae research found that 78% of the US internet users who had experienced AR would prefer to interact with it as opposed to watching a 30-second video.

Mobile AR Installed Base

Visual Search

Within the next several years, visual search, which ARtillry’s Boland describes as a “close cousin of AR,” will be widely available from a variety of companies, including Google, Microsoft, Amazon and Pinterest. One example of such a tool, the Google Lens app, uses artificial intelligence (AI) and cloud-based data to display additional information about an object or location that a user is pointing a device at. In September 2018, Google announced it was integrating Lens directly into its search engine and revamping the way image-oriented searches are conducted to make better use of visual information.

“As AR becomes more common, your phone will ideally be an ‘always-on’ lens, like a magnifying glass,” T3’s Gaddis said. “You’ll just point it, and it will always be displaying what you’re looking for.” On the same day as Google’s announcement, Snap Inc. and Amazon announced a partnership through which Snapchat users can identify products with their device’s camera, then buy them via Amazon. These initiatives are significant, because they signal a shift in the way people will find information. “The rise of computer vision, AI and AR has fundamentally changed the purpose of the camera,” Arguelles said. “Now you can start using your camera for things like exploration and entertainment, without an intent to even take a picture. People are using
the camera as a starting point for context.”

As this technology evolves, industry watchers believe that Google, Bing, Amazon and others will begin offering paid visual search opportunities that let brands sponsor information about various things the camera identifies. This information would pop up in AR. “I think [Google is] going to have a similar model to what they have now with search; their intent for going into AR is to feed into their main business, and a lot of that is search based,” Boland said.

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Disclosure: ARtillry has no financial stake in the companies mentioned in this post, nor received payment for its production. Disclosure and ethics policy can be seen here.

Header image credit: Snap, Inc.