AR upstarts paint picture of technology's location-based potential at SXSW

Integrating immersive smartphone experiences with location could make for a data-driven marketer's dream if adoption grows.

Apple CEO Tim Cook recently suggested that augmented reality (AR) has the potential to match the influence and ubiquity of products like the iPhone but, to date, use cases for the technology have appeared slim for marketers, raising questions of whether and when AR's media hype will see mass mainstream adoption.

The runaway success of Nintendo and Niantic's Pokemon Go app last summer drew up a much clearer blueprint of how AR might be leveraged to bridge on- and offline marketing efforts — a practice many marketing professionals still struggle with. While some of Pokemon Go's initial hype has simmered in the time since launch, Nintendo and Niantic have continued to forge fruitful brand partnerships and, perhaps more importantly, have spurred more marketers and developers to try their hand at building AR experiences.

A number of upstart vendors at this year's SXSW Conference and Festivals showcased the horizons where AR might help mobile marketers better make the connection between digital and physical efforts. In sectors as varied as retail to sporting events, these apps and experiences might ultimately open up entirely new pools of consumer data for businesses both small and large to glean insights from. 

"[Pokemon Go] was the perfect combination of just enough tech, an adored IP and a highly-motivated user base, and it mainstreamed AR globally over the course of a few months," said Tom Wright, co-founder of VR specialty studio Tactic.

"Innovation-focused brands already had an interest in AR and in location-based experiences, and the success of Pokemon Go has made it seem more achievable for everyone," he said.

Augmented reality, real-world prizes

Movers in the AR space must continue to innovate to push past the gimmicky label and convince consumers of the technology's sustained value.

Analysts at the International Data Corporation (IDC) forecast that AR could be "on track to create a shift in computing significant enough to rival the smartphone," with the qualifier that AR is very much in its "infancy" and has a "long runway" before reaching mass adoption. Part of the technology's acceleration is currently being stymied by cookie-cutter approaches that don’t utilize AR's unique strengths, vendors said.

"The majority of AR campaigns right now are: 'Put your phone in front of this picture and it will turn into a movie,'" said Jon Cheney, CEO at Seek, a location-based AR app that offers players real-world prizes and discounts. "Nobody cares. That will get old so quickly. Just put a TV there so that I can consume the content more easily.

"Most AR content is just a gimmick," he added.

Seek attempts to set itself apart by using location-based AR to then offer players real-world prizes, speaking to enhanced reality's potential to lessen friction in omnichannel marketing.

Cheney detailed a scenario where visitors to a Chick-Fil-A location receive a mobile push notification to open Seek. The in-app camera then presents an AR overlay of Chick-Fil-A’s brand mascot — a cow — that, when interacted with, rewards users with a digital "chicken" token that can be converted to in-store credit.

"You receive a discount or a coupon for something on the menu inside, and you go in and redeem it right there,” he said. "That is value — relevant, engaging and shareable."

Seek was also designed to allow brands to tap its service to build AR campaigns on-demand. By outsourcing AR content creation to Seek, marketers can then bypass some of the technology's steep developmental learning curve, Cheney said.

Arena-sized audiences

AR tie-ins seem particularly well-suited to sectors like food and retail — look no further than the deals Pokemon Go has inked with big-name brands such as Starbucks and Sprint — but there's no real ceiling for connecting the technology to real-world experience, according to Virtex Apps founder Jeff Green.

"Options range from simple signs or objects in the background of a scene to entire experiences that focus on particular product," he said. "Some scenarios may even mix real and virtual worlds, such as when participants in a virtual game win real world prizes or public acknowledgment. Truly, the sky's the limit."

Virtex Arena, following Green's sky's-the-limit attitude, is an app with ambitions that are stadium-sized. Arena builds multiplayer AR competitions centered around breaks and downtime during large sporting events or concert performances, with interactive virtual elements appearing on the field or stage.

Outside of potentially providing a fun distraction via gamification, Arena aims to build a powerful platform for connecting marketers with real-world audiences. Think of it as a digital spin on the jumbotron games of old, though with tangible engagements and impressions to measure.

AR experiences that effectively tie together actual locations like arenas to a great mobile experience make for a data-driven marketer's dream, according to Wright. And while the technology is still working its way toward adoption at scale, brand partners might ultimately help drive those connections home. 

"The main challenge is that AR is a new concept in this field, so the idea is not yet well established with the public," Green said. "However, sponsor relationships are very well established with sporting events and concerts, and this app builds on audience participation methods that are already in practice today."

Giving a reason to engage

The first challenge mobile marketers have to overcome for AR is simply incentivizing people to participate at a location, said Green. Today's consumers are busy and easily distracted, so the marketing hook needs to be strong enough to convince them to pull out their devices and interact with a virtual scene.

Giving people a reason to engage means making the experience unique to AR and not something that marketers have simply shoehorned in to get in on a trend, said Wright. Stemming from that, technology alone won’t be enough to draw in large audiences, but if it enhances an experience people already enjoy — a concert or dropping in at a local food joint — more users will participate.

"Augmented commerce apps like Ikea's have proven that AR can help drive sales and engagement, and Pokemon Go has shown that there’s a passionate global audience to be found and engaged if you create a strong enough experience, for the right types of users," Wright added. "Product apps like the [Jose] Cuervo 'History in A Bottle' allow product companies to tie an experience to the physical object they're marketing."

There's no shortage of opportunity for brands looking to get started learning with AR, as Google's building out of its Tango platform or Apple's purchase of Metaio demonstrate. Shazam also recently launched an AR platform for its brand partners that fosters AR experiences such as 3-D animations, product visualizations, mini-games and 360-degree videos.

"The brands that will win here will need to plan for AR, and commit to doing something great," said Wright. "These pioneering AR experiences can't just be the version of the idea that’s been slimmed down to fit into what's left of a fiscal budget."

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