AR Advertising: How is it materializing today?
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Augmented reality continues to evolve and take shape as an industry. Like other tech sectors, it has spawned several sub-sectors that comprise an ecosystem. These segments represent standalone topics in ARtillery Intelligence’s ongoing analysis, including monthly Intelligence Briefings like this.
Those segments include things like industrial AR, social, gaming, and shopping. But existing alongside all of them – and overlapping in a classic Venn diagram – is AR advertising. This includes immersive animations that let consumers visualize products in their space through the smartphone camera.
AR advertising is actually one of the most lucrative AR subsectors, on pace to reach $1.41 billion this year according to ARtillery Intelligence estimates, and $8.02 billion by 2024. These figures measure the money spent on sponsored AR experiences with paid distribution on networks like Facebook and Snapchat.
As we’ve examined within past reports, the factors propelling this revenue growth include brand advertisers’ growing affinity for, and recognition of, AR’s potential. Its ability to demonstrate products in immersive ways resonates with their creative sensibilities, transcending what’s possible in two-dimensional formats.
Beyond that high-level appeal for creative constituents, there’s a real business case. AR is proving to have the rare ability to span the purchase funnel – from upper funnel brand awareness to lower funnel conversions and transactions. And it’s demonstrating favorable performance at all funnel stages.
Proof points for the above claims can be seen in the numbers, such as campaign performance metrics analyzed in this report. We’ll double down on that in Part II of this series with a procession of case studies and actionable takeaways for AR advertising.
But before we get to that point, who are the players? What does the value chain look like? And what are the comparative platforms for ad creation and distribution? Competitive intelligence like this is required to fully understand the AR advertising landscape and its players. We’ll do that in the coming pages.
Throughout this process, we intend to maintain a strategic angle. There’s lots of flowery language out there about AR’s potential (which we’ve admittedly done in the preceding paragraphs). But it often falls short of actionable takeaways for AR startups, ad tech players or advertisers themselves.
Put another way, we’ll methodically examine the what, why and – most importantly – how of AR advertising. All three will be examined in this first installment, while following reports will go deeper into the how. What’s working and not working in these early stages while the AR advertising playbook is still being written?
As a bonus, ARtillery Intelligence will create a dynamic tracking index for AR ad campaigns, available to PRO subscribers. This will be an at-a-glance chart that shows hundreds of AR ad campaigns, including results and other key attributes and source links. As always, the goal is to empower you with a knowledge position.
This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of the XR sector. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence original data, as well as that of third parties. Data sources are attributed in each case.
For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.
Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.
Disclosure & Ethics Statement
ARtillery Intelligence has no financial stake in the companies mentioned in this report, nor received payment for its production. With respect to market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. Disclosure and ethics policy can be seen in full here.