The Tailwinds for Augmented Reality Advertising Are Too Strong for CMOs to Ignore

NEW YORK, April 13, 2018 -- The ubiquity of the smartphone and its integrated camera has brought about a new era of consumer behavior. One specific form of camera marketing, the use of augmented reality (AR), is quickly gaining traction according to a new report released by The Boston Consulting Group (BCG). The report is titled Augmented Reality: Is the Camera the Next Big Thing in Advertising?

“While no one can predict exactly how camera marketing will evolve, to stay ahead, CMOs should have an AR strategy now, when the experience is still in its beginnings,” said Martin Kon, a BCG partner and a coauthor of the report.

The report examines the impact of AR on the consumer advertising market. Based on 2017 data from Snap, Pokémon Go, and other AR applications, an estimated 80 million people in the US (or roughly one-third of all smartphone users) engage with AR at least monthly. The majority of consumers using AR are millennials (19 to 34 years old) and members of Generation Z (age 18 and younger). By 2020, more than 120 million people in the US are expected to use AR.

BCG surveyed more than 50 of the top 200 advertisers in the US on their current usage of AR and their outlook for the future.

Among the key insights:

• While nine out of ten large consumer advertisers in the survey are either already using, or planning to use, AR in their marketing campaigns, only one out of ten companies consider AR to be well-integrated into their marketing strategy—meaning that it is largely still in the experimental stage.
• When it comes to AR, the biggest challenge reported by marketers today is market maturity. Respondents also cited the following as barriers: “unable to reach my audience at scale,” “required too large of an investment,” and “lacks a track record of results, it is too new.”
• Fewer than one in five advertisers considered incremental sales to be their primary objective for AR marketing today; but 24 months from now, more than one-third of advertisers expect it to be their primary objective.

To lay the foundation for their AR strategies and to prepare their organizations to execute successfully, marketers need to take action in five areas, including building AR into the core marketing portfolio and picking the right platform for AR strategy.

While the study was commissioned by Snap, all analysis and conclusions are entirely the perspective of BCG.

A copy of the report can be downloaded here.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group
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