Marketing's Augmented Reality After Pokémon GO

January 3, 2017

By David Ward



The biggest mistake brand managers can make when it comes to augmented reality (AR) is assume that everything they need to know about AR can be found in the phenomenon that was Pokémon GO.

Developed and published by Google-spinoff Niantic Labs, Pokémon GO exploded as a location-based smartphone game in the summer of 2016, quickly generating more than 600 million downloads around the globe. As with most fads, much of that interest quickly faded, but this was thanks in part to the sheer volume of users, which triggered some back-end technical issues that frustrated many players. But even with that stumble, Pokémon GO was still able to prove one thing — properly done, AR can be a compelling experience with tremendous potential to both engage large audiences for extended periods and trigger specific behaviors in the real world.

Niantic also proved, through international partnerships with companies such as Softbank and McDonald's in Japan and Starbucks and Sprint in the U.S., that brands can successfully participate in these AR experiences, driving exposure and foot-traffic to brick and mortar locations.

"What Pokémon GO did was not just break out AR to the general public but also showed the power of geolocation and geofencing and how augmented reality can work within that," explains Matthew Szymczyk, CEO at the Los Angeles–based augmented reality company Zugara. "We'd talked about that with brands before and often times the light bulb didn't go off, but after Pokémon GO they got it."


Augmented Reality Comes of Age in Advertising

Though it often gets lumped together with virtual reality in media coverage, AR is — at least for now — a far more practical tool for marketing and sales. Having been around for nearly a decade, the technology has managed to shake off some of its early growing pains and in recent years has been included in a variety of marketing initiatives ranging from shopper marketing, direct mail, and experiential events to location-based and gamification programs.

"Four or five years ago, AR was more of a gimmick," says Lindsay Boyajian, CMO at Paris-based Augment, an enterprise AR platform with solutions for a host of different categories including retail, B-to-B sales, and marketing. "Now we're really getting into the utility of AR and so you can still use it to bring a page to life, but you can also embed AR directly into your mobile app and you can embed AR into your existing retail environment so shoppers can see how your products look at home."

Boyajian says AR works well in-store for retailers, especially those selling electronics, home appliances, and furniture, or anything else that's so large it might need to be measured before the consumer brings it home. "That's why you're starting to see AR playing a more valuable role in marketing and path-to-purchase initiatives," she adds. "Consumers can go to a brand's website, take a picture, and then use an AR app to see how various couches, for instance, might look in their home before they even head off to a store."

AR's ability to bring both print and digital pages to life is one of the main reasons furniture and lifestyle retailer IKEA has spent the past few years building out an augmented reality component for its print and digital catalog. "At IKEA, we are unique in that one of our strongest brand assets is still our catalog, a piece of very traditional marketing," says IKEA U.S. Media Director Alia Kemet. "The augmented reality functionality makes products more accessible by bringing them into the home."

The catalog features hundreds of AR-enabled images for IKEA's "Place Furniture in Your Room" program, and Kemet says the company relies on consumer feedback and social media to track both how many print and digital catalog users are relying on AR in their product education process and also which items they're most interested in.

"We used data to make a big change with the latest update," Kemet says. "Last year the augmented reality feature could be found a few steps into the app, which meant people had to hunt around for it a bit. This year it's available immediately and, as a result, about 20 percent of users engage with it compared to 6 percent before."

The AR app plays a valuable role in the sales process, but Kemet says it also helps convey a strong message about the IKEA brand. "You always need to have a specific goal in mind with a clear objective of how the technology is going to add value to your customers," she adds.

AR's ability to integrate any product into a virtual "Try before you buy" branded consumer experience is also triggering interest in other categories, including fashion and beauty, notes Linda Smith, founder and CEO at Calabasas, Calif.–based FaceCake Marketing Technologies, adding, "For us it's a way to help retailers and brands build that personal connection."

Engagement is the leading indicator of conversion, and augmented reality can definitely provide that engagement that retailers and brands are looking for."

A recent study conducted by Interactions Consumer Experience Marketing of 1,062 U.S. adult shoppers found that more than one-third already use AR while shopping and 47 percent of those like to use it both online and in a store. More than half of respondents (55 percent) also reported AR made shopping more fun and 61 percent prefer to shop at stores with the technology than those without it. None of this is likely to be a surprise to Smith, whose company specializes in providing a variety of AR solutions to accelerate the shopper along the path to purchase. Those include CAKE AR, a browser-based AR solution that can be quickly integrated into a brand's product pages.

"With CAKE AR, consumers now get a chance to look at the product and the packaging, but they can also see how a rouge or lipstick looks in real time on their own image," Smith says. "Engagement is the leading indicator of conversion, and augmented reality can definitely provide that engagement that retailers and brands are looking for."

Smith explains that one reason AR is steadily gaining traction in the advertising community is due its ability to provide metrics that can be hard to come by elsewhere. "Our Swivel Virtual Dressing Room lets both brands and retailers not only know what product shoppers liked, but also what they left on the dressing room floor and weren't really that into," she explains. "Those kind of metrics used to be only available to e-commerce and m-commerce sites and mean that brands can now better tie together a consumer's online and mobile engagements with a product with their brick and mortar conversion."


Augmented Reality Adds to the Branded Experience

The ability to provide solid metrics — as well as a brand engagement that can't easily be replicated in the real world — is also fueling the increased use of AR in experiential marketing.

"Our events are starting to include augmented reality, in part because people are wanting experiences they simply can't have in others settings," explains Jessica Whitney, founder of Orange, Calif.–based ZOē Productions, an event production company that in recent years has expanded into branded experiential programs. "One of the things we've already learned with augmented reality is you can't just put it in just to have it — it needs to be used in ways that feel genuine and authentic."

Courtesy of ZOē Productions Inc.

In September, ZOē Productions incorporated AR into a James Bond–themed event for insurer Pacific Life and this past summer included the technology in the Pepsi-sponsored New York exhibit, "Love: From Cave to Keyboard, Imagined by Pepsi."

The branded pop-up event, held in mid-July in conjunction with World Emoji Day, showcased the ways in which love has been communicated non-verbally through the ages. The exhibit included an AR station where visitors could get a picture with a Pepsi-themed emoji based on their facial expression superimposed over their face.

"We built that out so the person could then post it to social media or email it to themselves," Whitney explains. Some of those emojied photos went viral, helping the two-day exhibit generate nearly one billion impressions on social media, according to Whitney, who says the PR results are still being calculated. "Everyone wants to share the things they're doing and with the implementation of augmented reality, along with virtual reality, it leads people to post and to share more things they think are cool."

Crayola is another brand now incorporating AR into its consumer engagement; in this case at its three Crayola Experience locations around the country.

"We're a gated attraction for children, but we're also a brand brought to life ... [through] experience," explains Victoria Lozano, SVP and GM of Crayola Attractions and Retail. "We use AR in several activities, including one where kids color a coloring page and then that page is actually animated on a screen and comes to life in exactly the way they colored it. The child then not only interacts with that page but can also take a selfie that makes it look as if a dragon, for instance, is sitting on their shoulder."

Lozano believes the engagement at Crayola Experience translates into brand loyalty among both children and their parents, as well as increased sales at traditional retail, since some of the activities found at Crayola Experience locations have similarities to the products it sells in stores. But she also cautions that with AR, as with any technology, it's important to know your audience. "There is a pretty significant gap between the next tech shiny object and what the average person understands," she says. "You have to find the sweet spot where you're creating these unique experiences but not losing sight of how the audience, in our case children, interact with it."


The Future of AR Advertising: Location, Location, Location

While location-based digital marketing has been around for some time, Squirtle, Pikachu, and the other characters in Pokémon GOdeserve credit for providing the advertising community with a glimpse into how digital lures can be effectively used to drive people into specific retailers.

"It's really untapped territory now because brick and mortar's advantage has always been higher conversion rates compared to online and mobile," Szymczyk says, whose company has worked on both marketing and non-marketing AR initiatives involving Hungry Jack, Pepsi, and Delta Air Lines. "The challenge has been actually getting consumers into stores, but that nut's starting to crack as we show how geolocation can be really big with Millennials as well as Gen Z. I think geolocation in augmented reality is going to take off in advertising just because of all the opportunities it presents."

Some advertisers have already experienced success with location-based AR programs. Prior to Pokémon GO, Niantic Labs in 2012 released the game Ingress that included a partnership with a variety of brands, including the AXA Group (though not the U.S. entity AXA Equitable) and the national convenience store chain Circle K. "For AXA we created a portable shield to protect an in-game portal and it was the strongest shield possible within the game," explains Niantic Product Marketing Manager Archit Bhargava. The easiest way for players to acquire the shield was to actually visit an AXA location and capture the shield through the mobile app's AR feature. "For AXA it became a way to reach Millennials, which a lot of Ingress players were."

The program not only led to 20 million AXA Shields being distributed globally, but also was directly responsible for 1.6 million visits to physical AXA locations across six countries, including Germany, Switzerland, Indonesia, Poland, Spain, and Italy.

"AXA was able to deliver the message, 'AXA: Not only protecting your financial assets in the real world, but also helping you protect your virtual assets in the world of Ingress,'" Bhargava says. "That was a huge brand play because we did surveys that found massive uplift in terms of their brand after that."

Paul Bennett, global brand director at AXA Group, also touts the success of the Ingress partnership, noting that not only was AXA the most frequently recalled brand in a majority of the markets where the company had an AXA Portal presence, but that AXA's brand familiarity and favorability increased in all competitive markets.

In addition, the company found that respondents' brand perceptions of AXA were generally much more distinctive after one year of Ingress activity, increasing instances of attributes like "modern," "innovative," "progressive," and "imaginative."

"We believe that the nature of augmented reality itself can help brands simplify complex messages, as you are able to create memorable experiences that are more powerful than storytelling," Bennett says. "The challenge for brands is to remain relevant to the audience. If we are able to add value to people's lives then we would expect the brand awareness to come naturally."

Brand managers first need to shed the notion that AR is some gimmicky, standalone novelty that shouldn't face the same scrutiny and metrics of other advertising spends.


The Future and Best Practices

If there's a complaint about AR, it's that it does need a proactive consumer who's willing to go through the steps to download the software needed to experience the technology. That wasn't a problem with the motivated users for Pokémon GO or Ingress, but can be an issue with AR programs that are strictly advertisement driven. In many ways it's a situation similar to QR codes, which largely failed to connect with consumers.

AR's opportunities are compounded by the fact that there's not really a single platform for the technology, which means consumers may end up with multiple apps on their phone after experiencing several different AR brand interactions. Szymczyk suggests that should change once Android and Apple smartphones come equipped with AR-enabling software pre-installed. "The interesting thing then with geolocation is the ability to put a bunch of different branded AR experiences in the same general location that would all launch within the same app," he says. "That's where you'll start to see more advertisers and marketers begin to experiment because you're combining image recognition technology with geofencing and geolocations."

The imminent introduction of the Lenovo Phab 2 Pro smartphone, equipped with Google's new Tango AR technology and two 16 MB cameras for 3-D mapping, could be another new opportunity for the technology, Szymczyk adds, noting, "One of the things brands are waiting for is when you can have an object that looks like it's real in a 3-D environment."

But for the time being, AR's selling points are its adaptability to different types of advertising programs and that it's fairly cost effective. Though initial stand-alone AR initiatives were often six figure investments, Whitney of ZOē Productions notes that agencies and brands with skilled internal teams can now add AR-based creative for as little as a few thousand dollars.

As for best practices, Szymczyk says brand managers first need to shed the notion that AR is some gimmicky, standalone novelty that shouldn't face the same scrutiny and metrics of other advertising spends. "The only way to know if AR is effective is if you're tracking metrics and conversions," he points out. "A real-world environment that's layered with an AR virtual environment should mean that anything can be tracked and measured."

Bennett of the AXA Group stresses that marketers can't view AR as either quick or easy. "It is not a short-term, one-and-done activity — it requires a long-term commitment," he says. "Go beyond your 'brand comfort zone.' AR opens a world of possibilities but to leverage its capacity you will probably need to move away from your traditional brand placement."

Bennett also adds that when it comes to AR, brands should think of their audience first. "If the experience is not enjoyable, it will be destined to fail," he says. "An example of this for the AXA brand was incorporating the physical AXA locations. While we were directing physical traffic to our AXA stores, we never interrupted the users' game experience in order to pursue a sale. Instead, we wanted to add value to their gaming experience by providing a high-protection game item at those locations."

Finally, Boyajian of Augment recommends that AR not be a siloed program within the marketing department. "Open the conversation up early and don't hesitate to bring even the product design people into the AR meeting so everyone is aligned toward that common goal," she says. "From a consumer perspective, it's still relatively new technology, so brand managers are still going to want to have an education component in there [explaining] what an AR app is and what it does. You have to devote part of the campaign to user education, just as you would with any new technology."



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