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Why Augmented Reality ‘hype’ could cost marketers millions

Why Augmented Reality ‘hype’ could cost marketers millions

Spotify, Intel and Ben and Jerry’s are the latest brands to get involved with Augmented Reality technology but at what cost? Scott Lester CEO of online retail content firm Flixmedia argues that the AR hype could burn holes in marketing budgets unless clear campaign objectives and reporting metrics are in place to enable measurable ROI.

Expensive gimmick or the future of advertising and marketing? Every so often a new technology arrives that brings with it new commercial opportunities that shake up the marketing and advertising industry.

Augmented Reality (AR) is one such technology. AR is about bringing immersive advertising to life, engaging with consumers through a rich experience combining video, 3D and sound, capturing the imagination and maximising the brand engagement experience, like no other medium can.

It’s a cool technology, but it’s also a technology that is courting hype and misunderstanding. Like any other marketing or ad campaign, there has to be clearly defined objectives and there has to be ROI.

Understandably AR has its critics, not so much as a technology but as an advertising and marketing medium with a questionable business case. Should this be enough to stem the exciting stream of AR ads, kiosks and mobile apps? Should we really be too bothered about return on investment of a technology so early in its lifecycle?

It’s a double-edged sword. AR needs to be deployed by early adopters to gain both recognition and application development time but the hype has been such that many businesses are in danger of falling foul of the technology.

Large brands who can usually afford to make expensive mistakes such as Coca Cola and McDonald’s have already dabbled and this alone attracts other brands. It has already triggered a me-too approach from rivals and now AR is moving down the food chain. It’s an expensive business to get wrong.

Like any advertising and marketing initiative there has to be justification, a measurable return on investment in the form of increased sales or improved brand awareness. Acer and recently embarked on an AR campaign using Total Immersion technology.

According to Total Immersion director Myles Peyton 70% of people who went to the site (prompted by an ad in T3 magazine) chose to live the AR experience. Of that group 13% then purchased the project, compared to an industry standard website conversion of around 0.5%.

Those are justifiable stats. Swiss watchmaker Tissot also embarked on an AR campaign with built-in reporting metrics and discovered that in-store sales of its watches rose by 85% on the back of its AR ads. So it can work on a direct sales level, which is justification in itself but these are just two examples out of many attempts.

Both Acer and Tissot will have been encouraged by their early experiences with AR but it may be too early to say that they have achieved true ROI. However the metrics are in place and that is the right approach to ensure there is no pouring of cash into some promotional black hole.

An additional benefit and one that is more difficult to measure is branding. Christine Bardwell, analyst at Ovum rightly points out that ROI need not be simply about sales. She says: “The luxury goods sector has much more of a brand focus and therefore tends to be more likely to assess sales ROI alongside the wider reaching brand benefits.”

This is true. AR has fantastic potential for raising brand visibility. It’s a cool technology that is still new and intriguing enough to get a lot of interest and any brand associated with that interest will benefit.

However it shouldn’t stop there. Successful AR campaigns have been as much about content and targeting (traditional advertising and marketing metrics) as the technology itself. To excuse an overworked phrase, content is still king and AR is no different, even at this early stage in its development as an advertising tool.

Using AR to attract attention but ensuring other content is in place to help drive home online products sales is essential. There is no point leading a horse to water if the horse doesn’t know what it is drinking.

Ultimately vendors and retailers could lose large sums of marketing budget if the campaigns are not well planned, with clear objectives. It’s easy to dream and get carried away with the potential of a new technology and lose sight of the reason for doing it in the first place.

In the right hands, AR is an amazing technology for advertisers and marketers and will undoubtedly underpin desktop and mobile campaigns for the next five years.

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