As you likely know, one of AR’s foundational principles is to fuse the digital and physical. The real world is a key part of that formula… and real-world relevance is often defined by location. That same relevance and scarcity are what drive real estate value….location, location, location.

Synthesizing these factors, one of AR’s battlegrounds will be in augmenting the world in location-relevant ways. That could be wayfinding with Google Live View, or visual search with Google Lens. Point your phone (or future glasses) at places and objects to contextualize them.

As you can tell from the above examples, Google will have a key stake in this “Internet of Places.” But it’s not alone. Apple signals interest in location-relevant AR through its geo-anchors and Project Gobi. Facebook is building “Live Maps,” and Snapchat is pushing Local Lenses.

These are a few utilitarian, commerce, and social angles. How else will geospatial AR materialize? What are its active ingredients, including 5G and the AR cloud? This is the theme of our new series, Space Race, where we break down who’s doing what….continuing here with Snap.

AR’s ‘Space Race’ Revs Up

Historical Evidence

Starting with Snap’s broader product evolution beyond AR, the thought is that social interaction is largely tied to the real world (pandemic aside). So if Snap can add layers of social relevance based on where you are and where you’ve been, it can deepen connections and engagement.

This thinking drove Snap’s 2017 acquisition of Placed, which it subsequently divested for other reasons. It’s since shown intent to carry the social mapping baton farther. Among other signals, Snap’s Alex Dao told me as much during an interview at the recent Localogy 20/20 conference.

According to Dao, Much of Snap’s location strategy orbits the Snap Map, which geo-tags users and their Snaps on a map interface. 200 million Snapchatters use it to find each other, and Snap has begun to monetize that engagement by letting local businesses promote themselves.

With that backdrop, Snap’s AR efforts similarly tie into the goal of driving local commerce. AR is inherently conducive to local commerce, as geo-anchoring aspects of the technology provide a foundation for utilities like local search and discovery via location-relevant AR content.

Like with Google, the payoff for these efforts is monetization –– via advertising, affiliate revenue or other models — to facilitate local commerce. It’s often forgotten that brick & mortar commerce (at least in normal times) accounts for a commanding majority of consumer spending.

Snapchat Raises its Location Game

Shared and Persistent

Snap’s past geo-location AR products include geo-filters, while more recent activity includes Local Lenses and business listings in Snap Map. These features are notable on their own, but get more interesting when viewed together to extrapolate Snap’s local road map.

Starting with Local Lenses, they work towards shared and persistent AR experiences that are associated with physical locations. The “shared and persistent” part is important, as it lets users anchor AR experiences to a location — viewable across sessions and between users.

These are the core tenets of the AR Cloud. With the goal of AR that “just works,” the AR Cloud involves spatial maps and other data that devices can tap into. Because spatial maps for the inhabitable earth are too big to fit on one device, the AR cloud delivers them on demand.

Tech giants are building AR clouds to power their respective local AR products. Google uses Street View imagery as an object-recognition database to localize devices. Facebook is building Live Maps, and Niantic crowdsources spatial maps in its Real World Platform.

Snapchat hopes to similarly use data from existing and ongoing Snaps that happen in specific locations. This is meant to form a sort of location database that will feed into its Local Lenses. That way, users can pull out their phones to create or discover AR content where they’re standing.

The goal is to give users the ability to leave persistent AR graphics on local spots. The use case that Snap has promoted is more about fun and whimsy, including painting streets and buildings with digital graffiti. But it could evolve into commerce-based use cases like storefront UGC.

Update 4/27: Snap’s AR cloud ambitions are further clarified by its $6.7 million acquisition of 3D mapping startup Pixel8.Earth

Long Tail 

Next on the list of Snapchat local commerce ambitions is Snap Map, as noted. Once used for social discovery, it now has a commerce-oriented outcome: business listings. Snap Maps’ 200 million users can now search and discover local businesses using the same tool.

This brings a local search use case to Snapchat. Sort of like Apple’s forays into local search and mapping, Snap will rely on third-party partners for listings data such as Foursquare, TripAdvisor, Uber Eats, etc.. But most notably — and like Niantic — it will offer self-serve SMB advertising.

Snap Map’s monetization will hinge on whether or not Snapchat users are interested in local search, including offline transactional intent. If so, this could be a powerful new competitor in local search, especially among Snapchat’s commercially attractive Millennial and Gen-Z users.

In fact, Snap has more 13-34-year-olds than any other channel, including Instagram. Quantifying that value, Snap’s Alex Dao told me that Gen-Z has $323 million in direct purchasing power ($1.2 trillion in indirect influence), which will only grow as the generation phases into the workforce.

This means Snap can offer SMB’s incremental and non-duplicated reach to an attractive audience. If we pan back to Snap users of all ages, the engagement levels are likewise notable: Snapchat has racked up more than one trillion lens views to date, and some users engage 30x per day.

And that’s where AR comes back into the picture. Though Snap Map is mostly a non-AR product, users who visit local businesses could subsequently activate lenses in and around their locations. That could involve Local Lenses or other formats Snap continues to roll out.

Diversifying Revenue: Niantic Taps Into the Long Tail

Mini Functions and ML

Moving on to the next piece of evidence in Snap’s local commerce master plan, it recently launched Snap Minis. These HTML 5-based apps will live in Snapchat’s Chat section and include micro-functionality like casual games and utilities. It’s similar in concept to Apple’s AppClips.

Launch partners include Coachella (coordinate and plan a festival experience); Headspace (launch meditation sessions and send to friends); and Movie Tickets by Atom (choose showtimes, watch trailers, buy tickets) — collectively demonstrating a wide range of potential use cases.

With that in mind, Minis could be developed to discover, plan, and transact local activities such as dining out. The model here is what WeChat has done in China. It’s similarly a chat-based app that’s become a launchpad for micro-apps and transactional features for local commerce.

Along the same lines, Snap ML lets developers import their own machine learning. Launch partners include Wannabe shoe try-ons and Prisma’s artistic selfie renderings but could evolve into lots of local search and commerce use cases that tap into Snapchat’s Scan tool.

So like Google Lens, this could identify local storefronts. With a training set of local imagery, an ML-fueled tool could allow Snapchat users to point their phones at a restaurant to get business info or user-generated content, then reserve a table or invite friends via mini-apps.

Of course, much of this is speculative in terms of Snap’s intentions. And the current state of the world isn’t as conducive to local offline commerce. But it’s also possible that, while AR Lenses inflect among shelter-in-place masses, Snap is planting seeds for local commerce’s return.

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