Immersive ad formats like AR continue to hold promise, though they’re mostly still in early adopter phases among brand marketers. We’re talking about ad formats that utilize the camera (Gen-Z friendly) to offer 3D interactivity, such as virtually trying on shoes or shades of lipstick.
This includes social lenses (the most popular format to date) and visual search. For the latter, Google is pioneering a “search what you see” use case to point your phone at objects to contextualize or shop for them. And as we examined earlier this week, Pinterest isn’t far behind.
But the king of consumer AR is Snap. Not only has it popularized AR lenses by having them piggyback on media/selfie sharing, but it’s monetized that traction. In fact, Snap explicitly attributes AR lenses as its growth engine during the past few years of ad revenue acceleration.
It turns out that the same qualities that make lenses viral also create favorable performance in their sponsored instances. Products shown in greater visual dimension have higher conversion rates and lower eCommerce returns on average than non-immersive benchmarks.
Bridging the Gap
To double down on all of these principles, Snap recently launched the AR Lab with ad agency giant WPP. The program will set advertisers on the right foot with onboarding tools, educational materials and development resources. This will ease those first adoptive steps for brands.
Breaking it down further, the AR Lab offers custom strategy guides with best practices for successful AR lens campaigns (think: how to convert lens interactions to eCommerce purchases). It also offers optimization scorecards to track campaign effectiveness in real-time.
Lastly, the AR Lab will establish an AR certification program that aims to enroll 1,000 WPP employees this year. This could accelerate brand adoption as their agency representatives will be equipped to translate their campaign goals to the benefits and best practices of AR lenses.
Stepping back, the idea is generally to continue growing lenses past the early-adopter brands noted earlier. The beauty of lenses for Snap isn’t just growth so far….but the market headroom still to come. Most advertisers haven’t yet experienced the benefits of these immersive formats.
Why is that? Some advertisers aren’t convinced, some need more education, and others are simply stuck in their ways….as it often goes with the habit-bound Madison Avenue. So the AR Lab is Snap’s way of reaching these uninitiated and unconverted brands. And WPP is its bridge.
So if Snapchat is building a bridge to a larger market of lens advertisers, who are those companies specifically? Current AR marketers span verticals but skew towards fashion and entertainment. They include hip and tech-forward brands like Gucci, Nike and Sony Pictures.
So if there’s growth to be had in AR advertising it could come from going deeper in these verticals as well as reaching new verticals. The latter could include AR-conducive product categories like food and travel. And it could involve moving down market to small businesses.
AR’s ability to create favorable brand engagement is also evident in hard goods, given the ability to visualize products remotely before buying. This makes AR primed for retail and eCommerce, especially in the Covid era when additional product dimension is valued.
But there’s a value chain that still needs to be developed in order for adoption friction to recede among brands. For example, making one’s products render properly in AR requires 3D digital assets — either existing CAD designs or 3D scans that need to be made.
These processes continue to get democratized by companies like CG Trader and VNTANA, which will chip away at the adoption inertia seen in the brand advertising world. Tech giants like Snap will likewise accelerate this process as they continue to double down on AR.