“An ad is chasing me down the street!” How far is too far for AR advertising?

Just how far is too far in advertising? Augmented Reality (AR) is shaping up to push the perception of “too far” one step further, with the ability to access microphones and cameras to present an altered state of interactive content, says, Kazu Takiguchi, CEO and Founder, Creadits.

Just how far is too far in advertising? For some, “too far” is when social media giants mine personal data and profit from its sale. For others, however, this is part and parcel of using a free service which connects millions of people around the world. “Too far” is a sliding scale and one which morphs with the introduction of new technology and changing norms.

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Augmented Reality (AR) for advertising is shaping up to push the perception of “too far” one step further, with the ability to access microphones and cameras to present an altered state whereby advertising content appears to interact with the user’s world. It’s the stuff of science fiction - but an advancement with practical implications of allowing private companies access to mobile devices. Further, AR for advertising is bundled with technological barriers which may inhibit the uptake for both users and advertisers.

Also Read: How Advertisers can Beat Facebook’s new Advertising Paradigm

The rise of AR advertising

The overnight success of Pokemon Go, the mobile app which brought the famous pocket monsters into the “real world” in 2016, heralded a new age for AR. The lesser-known little brother of virtual reality (VR), AR uses interactive digital elements to enhance real-world objects and environments. For example, GPS and navigation mobile apps can combine an overlay of AR from the user's camera to display destination directions.

The applications of AR are much more than video games with continued development in education, construction, healthcare and marketing. It should come as no surprise that massive growth is predicted for the AR industry, to the tune of tenfold growth to $61 billion in 2023.

More specifically for advertising, AR’s use in marketing campaigns has shown promising cases. According to one study, AR boosts engagement in digital ads by 30 percent. However, with great power comes great responsibility and it remains to be seen how both the AR and advertising industries address key issues inherent in the technology.

Problem one: privacy

The scale of digital intrusion into the private lives of users has never been greater, so the growing hype surrounding AR for advertising might be a stretch for some. After all, do users feel comfortable allowing private companies to access and augment their camera feeds?

Consumers are already sick and tired of privacy scandals - and many companies continue to misuse private data for financial gain. Facebook is a prime example. After struggling through the Cambridge Analytica scandal, the social media giant returned to the news last month for all the wrong reasons. Facebook launched a research study but actually collected and analyzed their data, Gizmodo reports.

Whether or not consumers will feel comfortable giving platforms like this free reign to their microphone or camera will be a decision for them, and of course, it will be users who choose to access AR-enabled ads. But there is no denying that people are getting more paranoid when it comes to privacy. Companies may find it tough to get all users onboard with AR if it means the requirement of access to their voices and faces.

On the other hand, governments are getting more serious about user privacy. Regulation like the European Union’s GDPR actively works to combat certain questionable marketing tactics. Could this be enough to allay privacy concerns? Again, it depends on the individual. Allowing private advertising enterprises access to vital user data will certainly be difficult to surmount and it will be interesting to see if this impacts user rates for AR.

Problem two: entry barriers

Advertisers are excited for AR - but customers? Not so much. In fact, since the idea of interacting with an ad is so new it is generally a hassle for people. Customers simply do not need to do anything with ads as they are while AR requires the extra step. Typically, users just want to press skip on Youtube.

There will be a disconnect until it is established that AR ads are fun to interact with and provide value. AR ads are not readily accessible and the user might need to install something, open their camera app and scan a QR code. That takes a lot for the everyday user, and until AR ads are one-touch they are unlikely to hit the mainstream.

Meanwhile, there is an entry barrier for advertisers in the form of developing such interactive, new content. Building an AR ad in comparison to video or static is a sizable investment, leaving many of the smaller to medium businesses out of the picture.

Businesses are results driven - especially so in the era of digital marketing and readily-available metrics. Persuading smaller and medium businesses to invest additional dollars on a new format means they will likely become late adopters, thus delaying mainstream adoption.

Also Read: Fad or future? Video Advertising’s $28 Billion Question

So why the hype?

There is a reason AR is the advertising industry’s hot topic and it boils down to engagement. Researchers and advertisers are seeing much more audience engagement through AR compared to passive ad creatives like static and video. The user is involved in the advert and thereby attracts more vested interaction. These people are more likely to click through and convert than before.

Most AR ads right now are related to facial recognition and take their cues from photo editing apps. These are straightforward concepts, and it will be interesting to see how far advertisers can push the envelope creatively to incorporate AR into their marketing campaigns.

It remains to be seen how these ethical and technological problems pan out in reality. The truth is that while there are certainly question marks over the technology, advertisers could argue that the benefits right outweigh the negatives. Why? Because AR ads are performing incredibly well, with conversion rates in the 20 to 80 percent range. A number of major brands like NBA, Gucci, Ariana Grande, Sephora, Wayfair are already growing their audience base and building brand loyalty with AR ads.

So long as engagement continues, the advertising industry will continue its love affair with AR. Nonetheless, it is important to consider the potential negative aspects of technology which actively collects and augments user information. It certainly is shaping up to be a brave new world of advertising.