The Future of Advertising: Can Augmented Reality Drive Ad Dollars?
Introduction to Augmented Reality Advertising
Snap CEO Evan Spiegel believes that augmented reality (AR) may very well be a game-changer for his business, driving ad dollars into the corporate. However, advertisers are usually not entirely convinced yet. The major issue is that they need more clarity on what Spiegel means by AR promoting. The only insight into Snap’s AR plans got here from interviews in the course of the company’s recent partner summit, where he hinted that upcoming investments in AR and a brand new operating system could bolster the platform’s ads business.
The Potential of AR Advertising
Spiegel has long been aiming to increase the potential of AR to advertisers, ever because it became a staple of Snapchat. He told Axios that Snap’s give attention to AR and developing its own operating system could help diversify its business model, potentially expanding its promoting opportunities. The company’s cordless, compact AR glasses, Spectacles, powered by Snap OS, may very well be a key a part of this plan. However, the initial excitement around AR promoting has given method to reality, and the high costs of making AR ads have proven prohibitive for a lot of brands.
The Challenges of AR Advertising
When AR ads were first launched, they got here with a hefty price tag of $500,000 minimum, which was too expensive for many brands. Even the introduction of a less expensive tier, allowing advertisers to convert a 10-second ad to AR for $50, didn’t make a major difference. The costs of making AR ads were still high, and lots of brands were delay. For AR to develop into a goldmine for advertisers, Snap must make the technology more accessible to marketers, just because it did for its users.
Aligning AR with Business Goals
Lauren Beerling, director of performance media at Collective Measures, believes that AR doesn’t align with Snapchat’s lower funnel push. "I feel those that have leveraged AR technology previously agree that it may be a fantastic tool for brands, but typically it doesn’t drive those direct response actions as much as awareness or consideration," she said. However, not all marketers are skeptical, and a few consider that Snap has the potential to show AR right into a revenue driver.
Integrating AR into Advertising Strategies
Jack Johnston, senior innovation and growth director at Tinuiti, thinks that platforms like TikTok are leaning more into live shopping, and Snap could follow suit. "Although Snap doesn’t have a live product today, there’s a runway for them to raised integrate shopping into these AR experiences to make a more cohesive consumer journey," he said. Automation and efficiency may even be critical for scale.
The Road Ahead for AR Advertising
It’s clear that AR will not be a cure-all for the promoting challenges facing Snapchat. The platform has made it clear that it would be a slow burn quite than a blaze, at the least in the case of raking in additional ad dollars from a wider set of advertisers. A spokesperson for the corporate said that while AR represents a crucial opportunity, the overwhelming majority of Snap’s promoting revenue is from video, and the corporate invests heavily in ad platform improvements.
The Importance of User Experience
If and when Snapchat launches a more comprehensive suite of ad products for AR, it would must think long and hard concerning the impact on the broader experience. Clunky promoting can quickly turn users off, and that is a risk Snapchat ad execs cannot afford to take. Chris Rigas, vp of media at Markacy, believes that feed ads work because they offer advertisers complete control of creative while injecting it naturally into the user experience. The equivalent for AR would want to make ads a part of the AR experience, but from what we have seen, AR ads are inclined to be more intrusive or interruptive of the user experience.
Conclusion
The way forward for AR promoting is uncertain, but one thing is obvious: Snap must make the technology more accessible to marketers and integrate it into their promoting strategies. With its massive base of 850 million monthly users and popularity for creativity, Snapchat has the potential to show AR right into a revenue driver. However, it’s a posh challenge, and the corporate might want to balance the needs of advertisers with the user experience. As the promoting landscape continues to evolve, it would be interesting to see how Snap navigates the world of AR promoting and whether it may persuade advertisers to take a position on this emerging technology.
