Ever since immersive experiences have been introduced, the line between physical reality and virtual reality seems to have blurred. Immersive experiences, whether through VR, augmented reality (AR), or mixed reality (MR), all together called extended reality (XR), have changed how we interact with and perceive the world around us, and this is true especially in the case of brands.“I believe that the rise of XR in adtech is fueled by its ability to generate impactful experiences with results. A study by InMobi, a multinational technology company, found that 70% of Indian consumers are receptive to AR advertising, with a 38% uplift in purchase intent after interacting with an AR advertisement,” Amit Dhawan, partner and CEO, ART-E, a marketing and consultancy agency, told BrandWagon Online.
Reportedly, brands are capitalising on this. These immersive tactics can go beyond capturing attention, as they can lead to increased sales, brand loyalty, and measurable engagement metrics. Interestingly, a study by Epsilon, a global advertising and marketing technology (martech) company, revealed that 80% of customers show a preference for engaging with companies that provide personalised experiences.
The big picture
To be sure, brands are using XR technologies for reasons such as customer engagement, product launches, and public relations (PR) besides improving their marketing strategies. This can further help companies establish stronger ties with their audience through AR-enabled try-on experiences, interactive VR product presentations, and virtual brand activations. In addition to increasing engagement, these XR experiences offer data on the interests and behaviour of consumers. According to SearchMyExpert, an online marketplace for digital services, the utilisation of AR and VR enables the creation of interactive experiences, which permits customers to experience products within the virtual landscape, along with the potential to craft enduring impressions of a brand.
A shift in consumer behaviour as by the conclusion of 2025, roughly 75% of the global population is anticipated to engage with augmented reality (AR) frequently, as per findings from a study, by Snap Inc and Deloitte, suggests. This forecast underscores the demand for AR technology and its potential to reshape how brands connect with their audience. In the contemporary digital landscape, AR, nestled within the spectrum of XR technologies, is understood to be growing the mobile consumer experience. By integrating XR components, AR can enhance consumer engagement by immersing users within their environment, offering a more interactive and personalised interaction than conventional non-AR experiences. This paradigm shift intends to highlight the AR’s impact in elevating the way brands engage with consumers in today’s marketplace. “I think VR, AR, and MR are all included in XR, which combines digital and physical materials. Adtech’s XR can provide immersive experiences that increase brand memory and engagement. In adtech, XR offers immersive experiences, boosting engagement and brand recall. AR is utilised for location-based advertising. However, MR combines elements of both, enabling dynamic advertisement placements in real-time environments. By incorporating elements such as virtual tours, brand storytelling in VR, personalisation, and interactive narratives into their XR storytelling strategies, brands can create experiences that leave a lasting impression on their audience,” Prateek Sethi, founder, TRIP Creative Services, a visual communication design house, stated.
Overall, the international XR sector is expected to have $183.96 billion worth in 2024 with projections for $1,706.96 billion by 2032, on account of a 32.1% compound annual growth rate (CAGR) during 2024-32, as per Fortune Business Insights, a market research reports and consulting firm. As far as the global adtech industry is concerned, MarketsandMarkets, a competitive intelligence and market research firm, stated that it would clock $579.4 billion in 2023, which is further expected to grow $1,496.2 billion by 2030 at a 14.5% CAGR for the mentioned timeline. The firm also added that global AR and VR spending reached the mark of $25.1 billion in 2023, emphasising the technologies market potential in terms of adtech solutions.
Measuring impact!
Despite being at a nascent stage, brands have seemingly started to explore XR’s potential for the development of experiential campaigns. Over the last couple of years, we have seen brands such as Pepsi MAX, Frooti, and Godrej Appliances, among others, come up with XR, specifically AR, campaigns to be early adopters of the technology for grabbing audiences’ attention. In 2014, Pepsi MAX orchestrated an encounter for commuters in London, leveraging AR technology to make individuals believe they were peering through the glass wall of a bus shelter when in reality, they were viewing a live video feed enhanced with three-dimensional (3D) animations on a high-definition (HD) screen. Reportedly, this campaign garnered over two million views and more than 24,000 shares within a week. Considered as two of India’s revered brands, namely Frooti and Godrej Appliances also used AR-oriented campaigns, with the former employing face detection technology to enable users to activate their front-facing cameras to catch cascading mangoes within an AR scenario, and the latter, in celebration of World Environment Day, unveiling their #GoGreen initiative through a mobile-centric campaign to show their lineup of eco-conscious air-conditioners (ACs). Users were prompted to search their surroundings for anything green and direct their cameras towards it. Upon discovering the green object, the advertisement unveiled Godrej’s environmentally friendly ACs, emphasising their dual purpose of cooling users while also contributing to planetary cooling, made possible through the application of colour recognition technology.
Global brands such as IKEA use AR in marketing to provide customers with the ability to ‘try on’ furniture and home goods in their homes using their smartphones. Reportedly, the usage of AR in advertisements to promote their products lead to a 14% increase in sales and a 35% reduction in product returns within a year. Moreover, McDonald’s used VR to create a gaming experience, allowing customers to visit a virtual McDonald’s restaurant and interact with staff. Media reports stated that McDonald’s virtual application attracted 10% new customers and increased product sales by eight percent during the first quarter after launch. “With the use of XR technology, brand storytelling connects them with its customers offering new experiences. XR technology offers an immersive experience with realistic soundscapes as users dwell in the virtual world. XR has the potential to offer realistic as well as high-quality videos and pictures that allow users to immerse themselves in the story. Furthermore, the development and use of hyper-realistic avatars should see strides in the field of XR technology by 2024. Reportedly, this movement is being led by technological companies such as Meta and NVIDIA,” Guruprasad Kamath, CEO, Manipal Digital, a digital content creation and technology solutions provider, mentioned.
However, the pivotal factor distinguishing companies that embrace XR-oriented adtech solutions from those that don’t often boil down to cost considerations. According to industry estimates, in the case of AR and VR advertising, expenses can span from $5,000 to upwards of $250,000. Nonetheless, it’s considered noteworthy that there exist cost-effective alternatives. For example, leveraging AR filters within established platforms can present a budget-friendly option for businesses entering into AR advertising, as is provided by AIOmniHub, an AI-based marketing firm.
While XR, including MR, remains in its early stages, it is currently being leveraged primarily to garner visibility by brands. However, in India, its strategic use cases within media plans are evolving, with a focus on tactical and experimental initiatives. Considerably, XR alone cannot achieve brand marketing objectives related to reach and scale, emphasising on an approach to integrate traditional, digital, and virtual media. Additionally, high costs associated with XR platforms, including content production and advertising engagement, are understood to limit its accessibility to a specific demographic that can afford immersive experiences. “As technology, infrastructure, connectivity, and device costs continue to decrease, XR’s potential for adoption and integration into adtech strategies across audience segments will likely increase. Advancements in XR technology can pose implications for traditional advertising as consumers become accustomed to immersive XR experiences. Additionally, agencies and creatives will need to adapt their skill sets to incorporate XR storytelling and interactive design into their offerings,” Raj Swaminathan, senior director – new initiatives and revenues, Globale Media, a mobile advertising company, concluded.