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Augmented Reality Marketing: Gimmick or Serious Disruptor?

By 20. November 2019 January 10th, 2020 No Comments

Augmented Reality Marketing: Gimmick or Serious Disruptor?

Summary: In this article, we will discuss three scenarios that show how and why AR might become a disruptive technology in Marketing, and support them with real-life examples and contemporary research findings:

  1. New Forms of Inspiration
  2. Substitutes for real products
  3. Branded Worlds
  4. Offline Ad Blockers

by Philipp A. Rauschnabel, December 2019


 

One of the many disciplines that have realized a great range of opportunities for AR is marketing. Indeed, both marketing academics and managers show a keen interest in understanding more about what consumers do with AR and what AR does for consumers. For example, a recent study by the Boston Consulting Group predicts multiple uses of AR in marketing, such as branding or generating revenues. A recent Deloitte report concludes that AR marketing provides “new ways to interact with products and services [and offers] companies opportunities to raise awareness, promote features, and inspire desire for their suites of goods” (Kunkel et al., 2016). According to Netimperative, only 10% of surveyed companies are currently using AR, but 72% plan to do so in the near future. The Boston Consulting Group (2018) echoes this forecast with similar numbers and concludes that a lack of knowledge about AR, especially in terms of how it works, remains a major concern. Against this background, this article defines AR marketing and discusses three potential disruptors.

Augmented Reality Marketing: Disruptors

Disrputor #1: Inspire Consumers

One of the main benefits AR can provide to consumers is “inspiration”. Inspiration represents a “motivational state that compels individuals to bring ideas into fruition” (Oleynick et al., 2014, p. 1). Typically, inspiration is evoked by an illuminating stimulus, such as an experience (Thrash et al, 2010). Retailers, for example, aim to trigger inspiration by helping consumers visualize what they can do with their products. Especially in European countries, consumers show a strong need to be inspired. More recent marketing research has divided inspiration into two separate but causally related constructs: inspired by and inspired to; the former represents a psychological state and the latter a behavioral intention (e.g. inspired to buy a product). Our own consumer research found that inspiration has particular relevance for AR:

  1. In a recent study, we surveyed consumers’ attitudes toward brands before and after using an AR app (Rauschnabel, Felix & Hinsch, 2019). We were particularly interested in the factors that explain the direction and magnitude of this attitude change. Contrary to our initial expectations, it was not consumers’ evaluation of the app (i.e. how much the liked it) that sparked their attitude change but the degree to which they felt inspired. When we split the sample in two equally large groups, those with high and those with low inspiration experiences, the findings were even clearer: The positive effects on brands were about four times stronger among the highly inspirational AR experiences.
  2. To better understand why inspiration matters, we asked consumers to try a Lego AR app in a shopping mall close to our campus before surveying them. The findings indicate that inspired consumers received two benefits. First, they experienced awe (which we would call the “wow-effect” in everyday life). Second, inspired consumers also felt nostalgic, and as nostalgic feelings are usually positive, they showed higher purchase intentions. However, the short-term wow effect did not show predictive power in explaining intentions, which indicates that AR goes beyond a simple surprise-gimmick.
  3. While the previous aspects indicate a high behavioral relevance of inspiration, how stable these effects are over time remains unclear. To better understand this, we conducted a longitudinal survey study in the United States. Participants tried a HoloLens device in a lab setting and answered questions about their experience and level of inspiration. The HoloLens was new to all the participants. Later, we invited them via email to complete a follow-up study. We found that our inspiration-effects held even over a period of several days. More specifically, we asked participants how using HoloLens inspired them during the last days and found that initially inspired consumers still felt significantly high levels of inspiration. In addition, these consumers devised more specific plans about how they could use AR to alter their environment, to substitute physical products with holograms, and so forth (“inspired-to”).

 

Disrputor #2: Substitution and Complementation

If content can be authentically integrated into a user’s perception of the real world, the question becomes what kind of products might not be needed anymore in the future. Consider, for example, screens or decorative pictures. Microsoft, for example, announced an office version for their HoloLens devices. While these everyday “things” might not be substitutable in the very near future, they might realistically be used in other products, such as prototypes in products or models (e.g. human bodies) in education. Our consumer research shows that consumers can, indeed, imagine situations in which they could substitute real products with virtual products.

The challenge for companies is how to deal with these situations. For example, Lego just recently developed “virtual twins” of Lego figures and provides content that can complement real products. More specifically, consumers can experience their real Lego products through an AR app (see Figure X) and create “AR added value” by augmenting them in life. This might, on the one hand, mean that consumers might substitute real products with virtual ones. On the other hand, it stimulates the desire to purchase more Lego products or to pay extra for AR features.

 

 

 

Disrputor #3: Creation of Branded Worlds

Human beings have a general need to individualize and alter their environments. Even thousands of years ago, people created drawings and art in their caves. Today, entire industries focus on decoration and interior architecture to satisfy all possible consumer wants. People use various decorative items, including trophies, souvenirs or any other form of art, to obtain a homier and more personalized dwelling. Most previously established technologies were just not able to fully satisfy this desire. Likewise, the role of brands is generally weak in terms of serving decorative purposes. A few exceptions are sports brands (e.g. posters of a favorite sports club), celebrities or some strong brands (e.g. Coca-Cola accessories), but people typically do not use brands to enhance their personal spaces.

AR can help users do so through virtual objects they might not possess in real life. The term “desired enhancement of reality” reflects the (expected) gratification of improving one’s perception of the real world in a desired, personalized way (Rauschnabel, 2018). This also includes things that a person might not be able to afford (e.g. expensive luxury items), that do not exist (e.g. fictitious characters) or that are not feasible in other ways (e.g. open fires, torches, wild animals as pets). Figure X presents some examples.

 

Video: A person decorating his home and substituting a TV with a holographic screen

 

Disrputor #4: Offline Ad Blockers and Anti-brand Content

About one-quarter of the German population uses some sort of ad blockers to hide banners from websites, and companies must deal with this challenge. Technically speaking, AR ad blockers integrated in AR smart glasses could present an ad-free environment to consumers. As an aggressive marketing example, Burger King Brazil launched an AR app that incentivized consumers to set competitors’ ads on fire (follow this link for a report). Consumers were encouraged to virtually “burn” down ads by other fast-food chains with the AR app and received a free whopper for doing so. While this was a polarizing and provoking campaign target at Burger King’s key rivals, the general idea of blocking real ads might be a challenge marketers will need to deal with in the future.

Conclusion: AR can be disruptive for Marketing!

AR is about to become a mainstream medium. Tech companies, as well as media producers, are shifting their resources to AR. Though still in its early stage, AR has the potential to affect almost all business disciplines, including marketing. This article presents research and observations on four selected implications: new ways of inspiration, new ways to experience brands in an AR-branded world, the potential to substitute real with virtual products, and challenges in communicating with customers, such as offline ad blockers. Without doubt, exact predictions are difficult or even impossible and depend on many factors, such as technological developments, user acceptance and legal regulations. However, integrating these predictions into long-range strategy planning and research agendas is a promising way to ensure firms are ready when AR becomes mainstream. When Apple’s CEO Tim Cook discussed technological AR challenges to solve, he concluded that AR “will happen in a big way, and we will wonder when it does, how we ever lived without it. Like we wonder how we lived without our phone today.” Thus, though still in a trial-and-error phase, AR in marketing has the potential to disrupt current practices in marketing, as well as many other (business) discipline.

References

Boston Consulting Group (2018). Augmented Reality: Is the Camera the Next Big Thing in Advertising? URL: https://www.bcg.com/de-de/publications/2018/augmented-reality-is-camera-next-big-thing-advertising.aspx

Kunkel, N., Soechtig, S., Miniman, J., Stauch, C., 2016. Augmented and Virtual Reality Go to Work, Deloitte Report., URL: https://www2.deloitte.com/insights/us/en/focus/tech-trends/2016/augmented-and-virtual-reality.html

Oleynick, V.C., Thrash, T.M., LeFew, M.C., Moldovan, E.G., Kieffaber, P.D., 2014. The Scientific study of Inspiration in the creative process: challenges and opportunities. Frontiers in Human Neuroscience. 8, 1–8.

Rauschnabel, P. A., Felix, R., & Hinsch, C. (2019). Augmented reality marketing: How mobile AR-apps can improve brands through inspiration. Journal of Retailing and Consumer Services, 49, 43-53.

Rauschnabel, P. A., He, J., & Ro, Y. K. (2018). Antecedents to the adoption of augmented reality smart glasses: A closer look at privacy risks. Journal of Business Research, 92, 374-384.

Thrash, T.M., Maruskin, L.A., Cassidy, S.E., Fryer, J.W., Ryan, R.M., 2010. Mediating between the muse and the masses: inspiration and the actualization of creative ideas. Journal of Personality and Social Psychology, 98 (3), 469–487.

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Rauschnabel, Philipp A. (2019): Augmented Reality Marketing: Gimmick or Serious Disruptor?; xrealitylab-article from Dec. 01, 2019; URL: http://xrealitylab.com/disruptive-augmented-reality-marketing-or-gimmick/

 

 

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