October 14, 2021

New AR opportunities in digital advertising

AR allows for greater personalization and offers a more immersive experience, two elements that consumers appreciate.

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Advertisers and publishers are struggling with the disappearance of third-party cookies: this important change has shown that having control over their data helps to increase consumer confidence in digital experiences, even when they are of an advertising nature.

The reduction of the "dependence" on third-party cookies enables advertisers to evaluate new and different channels and formats capable of offering extraordinary, personalized and engaging experiences. Augmented reality is a great example of this. It's a fast-growing type of solution, spurred in part by the pandemic, during which mass consumers have moved a portion of their "real lives" online. But also because users appreciate this type of experience. According to data from Allied Market Research , there are currently 1.5 billion frequent users of AR and this number is expected to reach 4.3 billion by 2025.

On the other hand, we are already seeing the benefits for brands, considering the scale and speed of adoption. Snapchat research suggests that more than 100 million consumers today use AR to shop, both online and in traditional stores. Nearly three in four consumers say they would also be willing to pay more if they could buy directly through an augmented reality experience. And, according to a Google survey, conducted in collaboration with Ipsos, about 60% of smartphone users are now ready for a virtual shopping experience. From another recent survey it emerges that 70% of consumers would like to see more advertising in AR - a very significant fact, given that consumers rarely make such claims.

In the eyes of brands, AR is a precious opportunity. It allows for greater personalization and offers a more immersive experience, two elements that consumers appreciate and, for this reason, get involved. Imagine what the potential could be: video with the possibility of buying; 3D product visualizations; "try on" an item of clothing; explore a personalized "digital mall". The paired features are great too: opportunities like using a virtual assistant, or browsing local store offerings and saving them to a shopping list directly from an email inbox.

In addition, AR allows you to personalize messages, without resorting to tracking tools based on the calculation of probabilities, soon destined to no longer be used in advertising. The format has evolved to allow for greater targeting through first party data, a radical change with the disappearance of cookies. AR can make use of first-party data from a brand or partner (increasingly reliable and controlled than third-party data) to truly personalize the message and engage consumers in new, more dynamic experiences.

It is a revolutionary development, capable of generating a high ROI. US furniture store chain Pottery Barn, for example, claims that customers interact on average 2.4 minutes with an AR advertisement. We are witnessing many new examples of innovative projects carried out by brands, which by demonstrating a successful use of AR along the entire funnel, drive brand awareness, advertising engagement and conversions. These kinds of experiences will be increasingly relevant to the consumer as they become more accessible, thanks to advances in hardware, software and mobile connectivity. 5G is a great example, because it guarantees faster speeds and a smoother, seamless user experience. Thanks to 5G, consumers will be able to experience AR advertising.

Now companies must understand how to use AR for their goals: design advertising campaigns and their distribution, identify where to publish advertising with AR. Augmented reality can be programmed programmatically, allowing omnichannel and targeted distribution: on mobile, at home, in stores and with digital out-of-home. As the digital landscape evolves and privacy remains the center of attention, AR is the format with which new experiences can be built. It combines privacy-oriented personalization with impactful creativity, helping brands reduce confusion and provide added value to their consumers.

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