Pokemon Go may be a fad that passes after a few months, but augmented reality, i.e. real-time integration of digital information into consumer environments, is here to stay. This edition of ExchangeWire’s Now & Next feature looks at augmented reality (AR) in the context of advertising and marketing – and predicts a hyperlocal future for advertising.

Today, we talk about 'augmented reality' as if it is something new; however, AR has been around for a couple of decades. First used in the 1990s, AR is not to be confused with virtual reality (VR) – which creates an artificial environment for the user. AR describes the integration or combination of the real environment of an individual user and digital information that is shown on top of his/her real world view. Think Google Glass with lots of virtual folders, signs, and interactive touchpoints.

AR has moved on from the early, bulky headsets, unsuccessful Google Glass, and the windshield technology used by car manufacturers who latched on to the practical implementation of AR from the early days. The mobile phone is the device du jour – and given the high levels of penetration of smartphones, the use of AR for marketing and advertising purposes is definitely in the cards. While Pokemon Go’s graphics may look unsophisticated, the popular game marks the start of further fine-tuning and developing that will see software developers and ad tech companies alike work on improving the quality of AR applications.

The technology

Augmented reality is used in apps developed with the aid of 3D programs which insert digital information via interactive markers to the contextual reality of the real world. Markers in the real world 'send' a signal that is received by an AR app or browser plug-in , that initiates a process of overlaying images, animations etc. on the user’s digital device. The use of GPS is essential for AR, as it identifies the user’s location and/or the direction the user may be looking or walking in, thus, displaying the relevant digital information in real time 'on top of' the respective markers.

The advantages of AR for marketing and sales are obvious: imagine a scenario where consumers in a shop no longer have to search for a shop assistant to find out the price or other product details, but merely look at the item through their mobile phone display and receive information via digital popups and overlays. Similar products could be shown as simple ads on-screen; price checks and links to alternative sellers are logical follow-ons, as are discounts, competitions and other offers. One day, it may even be possible to virtually try on clothes and check their fit with the help of AR.

A fuller picture

The main lure of AR for advertisers and marketers lies in the ability to target specific audiences and share information, thanks to integration on mobile devices. Personal shopping habits are recorded through an app – which allows accurate targeting at the right time, in the right place. Incentives can be tailored to target groups – or even individuals; and, therefore, marketing and advertising can be personalised thanks to in-depth knowledge of the customers. Linking AR-sourced customer information to online browsing habits will create a fuller picture of an individual’s needs and purchase triggers, benefitting advertisers, brands, as well as sellers online, and in brick-and-mortar stores.

Consumers can be distrustful of the transparency created by constant collection of personal. Yet, AR may provide benefits for consumers that outweigh the perceived negativity. AR not only enhances the customer's shopping experience by offering extra value in the shape of easily accessible information (price comparisons, personal recommendations, product reviews, competitions, games, special offers etc.), but also makes the shopping experience easily shareable. Creating another opportunity for marketers to turn customers into brand ambassadors.

Too much information?

However, the danger of the (literally) fuller picture may lie in potential overloading: faced with too many images, offers and information, purchase decisions may be hindered rather than helped. Worse than mere distraction, consumers could feel put off by an information overload. For advertisers using AR, the old adage of 'less is more' may be a useful guidance.

The future for AR looks promising: starting out at 60 million users in 2013, the global mobile AR market is set to amount to 200 million users in 2018, with the ad spend for AR projected to reach USD$12.8bn (£9.8bn) by 2017. Lab experiments, such as the study conducted by Ana Javornik, research associate at University College London Interaction Centre and Holition, back up the projection: "AR resulted in positive attitudes towards the application and willingness to use the app again and talk about it to others.”  Furthermore, AR was not only perceived positively by the participants, but when “integrated in an environment or in a process, it has the capacity to positively impact purchase activities and have a more far-reaching influence”. Good news then for advertisers and marketers who are already engaging with the technology, creating immersive brand experiences that allow shoppers to visualise products in their own homes or try on a new lipstick colour on their mobile screens. As long as they avoid overloading consumers with information, advertising in AR environments might even become an extra value that consumers actively seek out.