Augmented Reality: Marketing’s Trillion-Dollar Opportunity
As traditional revenues from television advertising are beginning to erode, a new trillion-dollar industry is emerging that mandates brands be omnipresent. Within this decade, augmented reality is going to change the way the always-connected consumer works, shops and plays. Once contextual marketing seamlessly transitions to commerce, it will be trusted brands—and the savvy marketers who manage them—that help consumers augment their world with tailored experiences to enhance their daily lives.
Last year, American adults set new records of media consumption by ingesting 10 hours and 39 minutes of media per day. As pervasive as media is today, new technologies are seeking ways to connect and empower consumers continuously throughout their 17.2 waking hours per day. According to Citi GPS, digital reality is quickly growing into a new trillion-dollar market with annual revenues of $692 billion expected by 2025.
Most people believe augmented reality means adding something to the real world that isn’t there. (Think of the millions of players who spent over $1 billion collecting Pokémon Go eggs on their phones). But just as much opportunity can be found in using AR to subtract items from view and help consumers focus on specific retail products lost in the panoply of visual clutter.
As low-cost augmented glasses become widespread, imagine walking down a well-stocked grocery aisle and seeing only foods that are sugar-free or that fit your new keto diet. Halal or non-GMO foods could be highlighted in your vision while other packaging would fade into the background. If you wanted to try a new recipe you saw on Facebook that morning, your glasses could show you the exact ingredients to purchase and even suggest wine or food pairings.
If this sounds like far-flung science fiction, Google Lens aims to make your smartphone’s camera even smarter by being able to accurately identify most objects by sight. If your AR glasses are looking at a company’s product at retail, the manufacturer will know the exact moment of the potential sale and can offer incentives based on your location, past purchase history and length of time making the purchase decision. Apple’s new ARKit developer software enables app developers to efficiently connect the real and augmented worlds with machine learning and artificial intelligence, thereby increasing sales funnel success rates. Loyalty programs and past shopping records can be accessed in real time to enhance the live shopping experience of consumers with personalized assistance as they traverse the aisles. While only 24 million digital reality headsets are expected to be sold next year, by 2025 it’s expected that will increase to 500 million.
Beyond the grocery aisle, automotive companies can transform a walk down any street into a merchandising experience with each and every vehicle they make communicating its most salient features directly to the AR-wearing pedestrian. Appliance and furniture manufacturers are using AR to reduce returns by allowing potential customers to visualize items at scale in their homes. Retailers are adding virtual inventory to their shelves without increasing physical inventories while shoemakers are even letting sneaker-heads customize their kicks at pop-up virtual stores near sporting events. If the smartphone revolution empowered the masses to be able to reach any piece of data on the go, digital reality holds the promise of providing context to database information.
All that said, if each consumer product creates a Snap-like filter for its messaging, every inch of our world could soon look like a dystopian Times Square. With thousands of brands wanting to overlay our vision with augmented graphics, consumers are going to have to decide which brands they trust with altering their reality. Controlling and coordinating these overlays will be the new advertising delivery platforms of the 21st century. With trillions of dollars of revenue at stake, it should come as no surprise that most of the major tech companies are investing heavily in the space. Add in the impact of autonomous vehicles (we will no longer be staring out the windshield for our daily commute), and 143 million Americans will have an additional hour a day to interact with brand messaging.
Given the thousands of companies vying to be the consumer’s augmented reality filter of choice, the next battlefront for the hearts and minds of consumers will be the brands that learn how best to display coupons, recipes and loyalty programs in this new augmented world. Trusted brands can enable shoppers to discover new products to enhance their lives while simplifying the overall retail experience. Eyewear is a $130 billion market today, with more than 95 million pairs of sunglasses selling annually. Soon, most glasses will include some data-enhancement capability.
According to a Deloitte survey, 88 percent of mid-market companies (firms with annual revenues of between $100 million and $1 billion) are already using some form of virtual or augmented reality as part of their business. Marketers have the responsibility to help their brands to play a more valuable role in our daily lives by helping people access the information and products they need when and where it’s needed.
The bottom line is, marketers and brands that are experimenting with augmented apps for phones and tablets are gaining the insights needed to prepare for the AR headsets of tomorrow. How do you want your brand seen in the future?
This column first appeared in Adverting Age on July 18, 2017.